All Forum Posts by: Daniel Tamayo

Thanks so much for your quick reply Stephen! Since you are in the area, would it make any difference if it is a newly flipped home? The management company has a 97% occupancy rate. Is most of the risk long-term depreciation and inability to find good tenants 10-20 years down the road? Higher than expected repair costs? Any insight you or anyone could provide for making decisions in low-income areas here and elsewhere would be appreciated. Thanks again!

Hi,

I'm thinking of buying my first rental property in a low-income neighborhood in Memphis called Frayser (38127). My question is, ASSUMING everything's fine AT THE OUTSET (good management company, no abandoned homes etc. on the street, house initially in good condition, vacancies are not an issue etc.), how should I assess the risk on the investment over the 30 years I'll be paying the mortgage?

Should I expect the rent I can collect to rise with inflation, or is it likely to steadily decrease? I don't expect the property value to increase, but how can I get any handle on the risk that houses on the street become abandoned and that it becomes harder to rent the unit?

Part of me wants to think that housing will always be in demand, particularly in Memphis where a large percentage of people rent. But the likelihood of the bottom falling out affects my bottom line so strongly that I would really like to have some sort of handle of how likely it is. Thanks so much for your time.