Nice bungalow, not-so-nice neighborhood...

[Joshua Feit]

Hello from Atlanta!

I am looking at a bungalow (3/1) that looks great and needs very little work.

The purchase price is 45K, and it is on seemingly good street with no boarded houses, no bars on the windows, decent cars, kept lawns, etc. There other properties on the street valued at 70-90K.

Rent comps for this 3/1 show a median price of $875 on Zillow.

Taxes are around $500 for the year, and insurance is around $450 for the year.

The property is currently vacant.

The neighborhood is Historic West End, and it is not far from the Beltline (paved trail / transit / redevelopment project in progress encircling downtown ATL). The neighborhood seems to be gentrifying, but there are still a lot of vacant, run-down properties in the area.

What do you think? Is it a good time to get into a place like this? Or is it too risky? I'm looking to buy / hold.

[Peter Myers]

Hi, Joshua: I find it helpful to think like my tenant. If they compare yours to others at $875 would they be enthusiastic about living there? It's also helpful to get a handle on your demographics. Is a person there who rents for $875 someone with a steady blue-collar job or a professional? This will usually indicate how much management you'll have to do.

If comps are truly 40-50% above the asking price, then why isn't it gone?

Lastly, there's nothing better than local knowledge as Tyler states. Good luck