Re: purchasing a rental property
10-16-2012 10:45 AM
In addition to the cost of sustaining the mortgage during times when the property is vacant, you also need to consider the costs of maintenance and upkeep.
In addition, if you're renting in a low income area you're going to have to be prepared for tenants who skip out unexpectedly or cause egregious damage well in excess of the security deposit you received.
You may also get the occasional idiot who decides to start his marijuana growing operation in your property, and all the complications that come from that.
And you have to bear in mind that as the property gains value your property taxes will go up, but the tenants in a low-income neighborhood will resist even the slightest rent increases.
All that said, I agree with previous posters that you are well-positioned to take this step and do it right. Just do so with open eyes and be aware that cheap properties are often cheap for a reason and when a neighborhood is described as "low income" that can often describe not only the tenants but how well the landlords are doing on those properties.
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