but will also continue to appreciate over time. And as the saying goes, the real estate market is all about location, location, location…. The problem is, I’m not sure what constitutes a "good location," especially when it comes to attracting renters. How do I find a "hot location," with some assurance that it will still be hot in 5, 10, or 20 years from now?
Thank you all for the food for thought.
Col. Kurtz- Yes, I’m a little late, but unfortunately, I can’t access the funds until May of 2009. Better late than never, I hope….
Matthew- Good advice, to be sure, but I’m afraid that in my price range, they’re all older than 30 years and have bars on the windows! Omiting the properties that don’t meet your criteria would leave me with none….
Just Wondering: It’s true, tastes will change, and the economy will do what it’s going to do. But some things never change- the location of a major University being one of them. There are still some shady looking properties for sale near the university district. I think I’ll limit my search to those.
Last but not least, one more question-
How do I buy below market value? I’ve looked at the Forclosure and Repo websites- they all want to charge me a fee for looking! It appears that they’re trying to take advantage of bargain hunters. How do I find the real deal?
Thanks again
col. Kurtz 9:04 pm on March 7, 2010
matt makes some good points but dont exclude a location due to its older housing stock. I have invested in some older nbhoods that we thought were in the path of a "Regentrification" trend that then provided wonderful ROI. I tend to stick to college towns and if they are areas that "newly minted" policemen and firefighters or teachers tend to move to, then even better. They have "good jobs" and stay for a reasonable length of time before buying their own place.
BTW you may be a tad "late" on bailing out of the stock market, no?
justwondering 9:04 pm on March 7, 2010
Near a university or a year round tourist location. There are no guarantees as jobs come and go in areas, but those two things live on.
Matthew M 9:04 pm on March 7, 2010
First, forget about appreciation. When you buy an investment property make sure it provides a positive cash flow and you buy it below market value. This way if the house does not appreciate you still make money. Location is important. I use a couple rules when looking at locations. 1) Would I feel uncomfortable in that neighborhood knocking on a door after dark asking for my rent. 2) Do the houses in the neighborhood have bars on the windows. 3) Do the businesses in the area look run down are there a lot of closed up businesses. 4) are the houses in the neighborhood older than 30 years old.
If I answer yes to any of these questions I stay out of the area because: 1) If i am uncomfortable my tenants will be also. This will mean high turnover of tenants. 2) If the windows all have bars it is probably a high crime area. 3)If businesses are run down or closed up it is a sign of a declining neighborhood. 4) houses built in the 50’s, 60’s 70’s or even older ones can have environmental concerns (lead paint, Asbestos), inadequate electrical systems stc…
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