Rental Home in Front of Junior High School

[Jason Measures]

Hello all! I'm currently negotiating on a property in a lower income area and am trying to determine if I should buy and hold or flip? My primary deterrence to buy and hold for this particular property is that the house is directly in front of a junior high school. I am concerned about renting this property and having tenants complain frequently about heavy traffic, kids in the yard, etc. Because of these concerns, I am considering flipping the property and cashing out quick, but I would like to buy and hold without the complications of the school and kids. Do any of you have experience with this kind of situation or simply advice? Any and all input is greatly appreciated!

[Brian G.]

Hey Jason,

I can't speak from experience as an investor but I can as a dad.

If the area is decent and the school is desirable I believe buy and hold can work to your advantage. Of course that is if it fits with your long term strategy.

Having multiple exit strategies is always a good thing. Knowing you could flip or buy and hold is a great comfort going into a deal.

Many families need to be in walking distance to a school due to circumstances.

For the right tenant (ie someone who needs their child close to school) they would pay more for the proximity.

Many families struggle getting their kids to and from school and want their JH kid to walk to school (or ride a bike) and get home by themselves especially if they perceive it to be safe.

Here are a few ideas to gather more information to help your decision making:

#1 I think speaking to a few families who have kids in the area may give you a great idea of the value they would perceive in being close to that particular school.

#2 You could also observe what it is like before and after school. Are the kids out of control or mostly behaved?

#3 You could also talk with a few neighbors and get their honest feedback as to positives vs. negatives in living there.

#4 I think a local realtor could also effectively weigh in on the value of the property as it relates to the school (ie resale value after flip or down the road).

All the best!

[Mike Palmer]

I agree with Brian. I wouldn't let it scare you off. If you are going to buy and hold then you are more concerned about occupancy rates and rent values than long term appreciation and saleability. Without knowing the area, I would think being right by the school would draw more renters, as there are always people that are new to the area and want to live within walking distance to amenities they will use daily. Perhaps if it was an elementary school it would be slightly better, but if the numbers work I would say go for it. I think that people looking to buy would be more concerned about the noise and traffic, but I would think a renter knows what they are getting and is likely looking for something in that location.