We have a pretty wide spectrum of deals here, so neighborhood choices have a lot to do with your specific strategy, as well as risk and return profile.

Hi Samantha,You may find your room rental tenant prospects to be on the rougher end of the renter spectrum. 

Also, do some research on light color spectrum (generally 2700-5000k) for different types of rooms (kitchen vs. bedroom, etc).

The areas near the suburban borders trend more towards the C end of the spectrum, where the areas deeper into the city trend more towards the D range.

I was thinking if one could find a value add townhouse in a good area with the mid scale rent in mind, you would be alot safer than the very low end of the spectrum.

At Holton-Wise we believe that some properties, especially those that are located in neighborhoods on the lower end of the income spectrum are much more profitable when being operated on the Section 8 program.

A property whose yield is 2% (based on monthly tent/divided by value) is on the higher end of the risk spectrum.

If the rent is only $350-$500 then that would be at the extreme low end of the spectrum in Tuscaloosa.  

Our  rates are at the bottom of that spectrum.

From my analysis, properties that are in between these two opposite sides of the spectrum are not meeting the rent to mortgage ratio.