Buying a Rental in a Slowly Declining Area - Seeking Advice

[Eric Castelli]

I am looking purchase my first four family and have largely been looking in a town about 20 minutes from where I currently live.  I grew up in this town and know the area well.   I have found 2 four families which exceed the 1% rule fairly nicely (1.5-1.6%).  However, for better or worse, the town isn't growing and property values have dropped some in the last ten years, and I don't have any reason to think they will go up.   The town is decent with lower crime rates but generally blue collar, with some smaller pockets of white collar. Even though I am solely interested in cash flow and not appreciation, I can't help but to feel concerned about the long term property price stability in the area.  

I am curious if anyone has an opinions on investing in this type of area.  Is it better to look for growing areas and for less cash flow? Or do I ignore the potential price declines and stay focused on cash flow?

Thanks in advance for any insight or experience you're willing to share. 

Thanks,
Eric

For reference here's a link to the real estate trends for this area: http://www.trulia.com/real_estate/Belleville-Illin...

[James Holland]

If you are saying the crime is low and it is a fairly populated area... I would wonder what makes you think the area is declining over any other area?

Have you done the comps? Or compared the last 6 month solds across to the other areas you think are going up?  What about compared to this time last year?

If the rent rate is good and you can get the property at a bargain... for a long term, those would be my primary factors in making a decision