Investors: Stick with up-and-coming neighborhoods

Property investors have a lot to consider when deciding which rental property in which to invest.  When weighing your options and trying to select the right neighborhood and the right property, you have to beware of those unethical investors who are trying to sell properties based on false rent rates, or showing higher cash flow than what will really happen.  When buyers fall into those traps, they find themselves in a mess of too much cash going out and not enough coming in.

Property investors, be wary of investing in property in areas that are going downhill. To the untrained eye, a depressed area with a few promising shops or buildings can be sold as “up and coming,” and while some are, others are on the other end of that slope, making the downward slide into being a forgotten neighborhood without the amenities of other areas in town. It will be a hard sell to get high quality tenants to live there, even if you set the rent below what you originally hoped you could get and do a thorough tenant check on everyone.

Your focus should be to buy and sell in neighborhoods where you have the odds of collecting rent in your favor. You might only make a profit of $150 to $200 a property, but if you actually get the rent every month you’re one step closer to a successful business. In a neighborhood where demand is low, you might luck out with a tenant or two who will pay on time, but chances are if they’re a qualified tenant, they won’t stick around for long, and the vacancy and likely repairs needed to a home in such an area will leave you in a negative situation.

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