What do I need to look for when looking at areas for potential rental properties?
The area of town I’m looking at is a low-income area, but the city seems to be working on revitalizing the area and has just established a task force in conjunction with an urban planning company. The area is currently described by the urban planning company as “settled, depressed, ugly, untidy, concrete, old, diverse, stagnated, distressed, unique, transitional,” etc. Their 10-year “vision” for the neighborhood is for it to be described in part by words such as “thriving, diverse, unique, happy, sustained, bright, prosperous,” etc.
This area has several older houses split into duplexes currently listed at around $65-75k, with rents for 1 and 2 br at around $350-500/unit.
I looked at the police departments stats for the area, and violent crimes are low (mostly domestic issues, as opposed to random violence), but in the summer months there seems to be approx. 100-200 reports of theft/vandalism per month.
My situation: We have approx. $25-30k equity in our residence that I’d love to invest in rental properties (slowly and carefully, of course - perhaps one building a year as equity grows). That would mean about $12k down on one of these properties, and the rest into rehab and emergency funds, for those times when Murphy comes calling. My husband is my handy man, so rehabbing wouldn’t be as expensive as if I’d have to hire contractors.
I was just curious if I should be encouraged that the city is looking to revitalize the area - which means I’d want to rehab the houses - or if the fact that the area is considered to be depressed/low-income means that I should stay away? For me personally, I love the idea of revitalizing old neighborhoods rather than creating “suburban sprawl” by over developing every inch of farm land.