VBRO in difficult areas

[Paolo Ruggieri]

All, 

I am considering buying 20 units apartment. It is in a tough area, very close to downtown Atlanta (2 miles) very close to a gentrifying area (0.5 miles). 

Reason why City of Atlanta is investing lot of money in a program called beltline which is planned to come to this area in 2 years.

Area is now very tough, mainly due to these 20 units... the rest of the streets are full of houses being flipped, but these 20 units are very difficult... 17 are with no doors and squatters live in them. think  the worst.

My idea is to hire 24X7 security for 3-4 months, rehab them all and rent them out. However, before they can be rented to good tenant I need 2 years... as area is not trendy yet .... first good renters in the area are taking best houses...and as living in my condo is less desirable than a house it will take me time to get good tenants...

I was thinking of trying VBRO... In Atlanta all VBRO rent for at least $400/week... I thought to try to rent my units for $250/week which VBRO... making units nice inside (so that pics are attractive), and explaining on the VBRO advertisement that low cost is because area is not yet a good area. VBRO should attract good tenants (as they typically look for a vacation/short term visit) and maybe good tenants are willing to stay in a difficult area without giving bad reviews if I am charging them very little. 

If i charge them $250/week... $250*4*20 = 20k gross /month... I am paying 200k for the 20 units and need to put 250k into it  ... $450k investment, 20k gross rent, 5-8k net rent would be great... if this works. all units are a 1BR-1BA

Does anyone have experience with VBRO is a transitioning area which is still pretty crimey?

[Jennifer T.]

My opinion is based on being a consumer, not a vacation rental owner (though I have rented my house on AirBnB a few times).  I think you would have a hard time finding much interest/demand.  Being in a safe area is a big concern for many tourists.  Me personally, I don't care how cheap or conveniently located a place is, if it's in a shady area, I'm not going to stay there.

I live in NOLA, a serious tourist mecca.  Whenever I have out of state friends or friends of friends from out of state planning a visit here, I am always either asked about the safety/location of a hotel they have already chosen or are thinking of choosing.  I have also almost always had AirBnB potential guests ask me about the safety of the neighborhood my house is in (when I have it advertised).

Don't get me wrong, I'm sure you'd have some interest.  For some people, money would trump safety.  But even great, reasonably priced vacation rentals aren't usually booked 365 days/year.  Especially when there are 20 of the same ones in the same place.