All I ever read from most people is that they wouldn’t touch a city house in a not-so good neighborhood.I will admit it takes a certain person to landlord in the inner city,but the profit margins are outstanding. :o. I own 4 properties in the city of Rochester NY. I didn’t pay more than 30k for any of them.Actually i paid 20k for 2 30k for one and one house for 28k.They are all doubles and I’ll have all 4 paid off on a 5 year mortgage for all of them.My lowest rent is 450 and they average 550 month, I pay 1500 a month in mortgs. and take in 4100 in rents. I do all the work and management for them so the cost is minimal.All said and done I make 2200 a month profit on top of my 40 hr a week job. So I dont want this to sound like bragging, I just dont want all first timmers to be scared away from inner city rentals…Hey someone has to live in the city and someone has to own the houses.Works for me so far.Plus it helps the neighborhoods out when you have good landlords renting out apts.All my properties are in tip top shape. And one last thing: I didn’t have to do any major repairs to these units other than painting and some carpet. My total out of pocket cost for all 4 houses has been 22k. So lets see-22k investment–26.5k yearly PROFIT, after all expences…doesn’t take a wall street investor to figure that one out. and in 5 years after they are all paid off?? forget about it…I’m looking for cabins in the Adirondack Mountains right now… ;D…Good Luck Everyone…POSITIVE CASH FLOW the words for the day
you are 100% right! most people put down the inner city for investment but the profit is excellent. I also own a few properties in the inner city, upstate NY. I also do quite a few flips but I refuse to sell those properties, too much profit!!!
I think what scares people off is the horror stories you hear about rent collection, property damage, etc.
Maybe you could comment on how either of you see your experience in managing these properties compares to what you’ve seen in other types of properties. Less trouble, more trouble, or just the same old stuff/different neighborhood?
Its just the same old stuff different area. You have to screen the tenants like you do anywhere else. Your management experience is going to coincide with the type of people you rent to. I have worked in real estate as a property manager so I try my best to use everything I have learned to evaluate every perspective tenant. That is the most important thing when it comes to renting anywhere.I am happy with my rental properties especially at the price I paid, they were a great investment.
Eve_32 is on the money with screening tenants. A big misconception is that everyone who lives in the inner city is poor. You would be suprised. If you screen and let only the best rent from you, you will have minimal problems. Also I’d like to bring up a good point about alot of city residents. Alot of renters are used to dealing with landlords who dont do a thing to thier houses. They just buy them, rent them, and forget them. Except on the first of the month. Then they remember. I’ve talk to landlords that I personaly know and they tell me stories of thier tenants “bothering” them because the toilet doesn’t work. "she’s been calling me eveyday for a week he says. Well HELLOOOO… I’m thinking --If your toilet was broke it would be fixed that day. And your waiting a week for this tenant?.. Plus all the damage it could cause…Man…so thats what alot of renters expect when they rent. So do you think they are going to care? no way… My point is…ummm I forgot…oh yeah…man I ramble… ok the point… Take care of your properties. screen- screen- screen- tenants…good ones are out there…If you have good tenants theres no difference where the house is… well maybe one…in the city I collect my rents EARLY in the mornings…H :DVE GREAT DAY AND REMEMBER…POSITIVE CASH FL 8)W…
Rochester NY is one of the few areas left in the US that cash flows nicely. You can easily buy a property for under 40k and have it paid off in a few years! Just screen, screen screen like the other posters have said. I have family up there and they own a few homes in the city, they also live there, so they know where to buy. The reason a lot on here give people the advice of staying out of the city is because it is different. Every city has it’s good areas, and bad. Every city has crime, and every city has drugs. So one comming out of the burb’s into the city without any understanding of the areas, are setting themselves up for failure. Also if you are affraid of the area, don’t invest there.
I personally don’t own anything in Rochester, that’s because I don’t live near it. If I did, I would be all over that place like flies on crap. I just happen to live in New Jersey, home of Camden, the worst city in America, but is more expensive than Rochester. I would pick Rochester over Camden anyday.
Do you live in Rochester? If not, how far from there are you? What areas are you investing in?
I am living in Brooklyn now but looking to invest outside the area.
Thanks in advance for your help.
One thing to watch out for in Rochester or anything upstate, Lead Paint. Many of the older homes are loaded with it, so watch out because remediation can cost a fortune.
My biggest problem with my property in the city of St. Louis is that it is Section 8. The Section 8 program is full of bureacracy. The inspections I don’t mind because I maintain my property well. But having to wait until they process all the paperwork to give the tenant permission to occupy the unit is a pain. Plus they can take up to 2 months to give you your first rent payment! But if you can get past all of that…the payments arrive on time every month on the 1st.
As far as tenants, if you screen well, be firm with your lease & policies and don’t fall for all of the stories, you will be fine. This advice is for the city as well as the suburbs.
I’d like to do it but my g/f hates the idea. There are places in my area in not so great neighborhoods that are $150-200k but have 12+ apartments. I don’t know how great my math is but even with some extra fixing up they sound like goldmines. Sure I might have to carry a peice to go get the rent but the money sounds great there.
Lol @ carry a piece. Collecting rents in person, you’d need one.
Maybe I’ll just let a management company collect the rents for me. I wonder if their fees go up to cover kevlar and riot gear?
One of the areas I was looking at isn’t so bad that it stops me from going over there to get some good Jamaican food during the daylight hours…I’m just worried about going into these buildings to get rent money from someone that would rather not pay me.
real estate and food… a louvely and grahnd mix. LOL @ kevlar. sweet. are you subcontracting with the S.W.A.T? RFPs for rent-collection SWAT. nice.
maybe yall didnt know, but most people that pay you rent would rather avoid you than hurt. people who dont have your rent money wont try to shoot you or jump you. they are more like mice than anything- running away from you. i have even seen people move in the middle of the night just to avoid the landlord and avoid confrontation. believe me they already know they are wrong, and whether you think they are deadbeat or not, they prefer to have their own place that sleep on a relatives couch. here is a thought. have you ever tried to throw some work towards your tenants?
next time you have a place that needs cleaning out, painting, repaired, save yourself some money. kick one of your tenants $200 or take something off of next months rent and you will have very cooperative tenants.
you would be surprised how handy some people are and wont charge you a contractors fee. or how well some folks clean and wont charge you what a cleaning service will or take up the time you would spend to do it yourself.
landlords who are having a hard time collecting rent in the innercity may as well be jehovah witnesses. no one will open the door, they are going to look out of an upstairs window and tell everybody to “be quiet, the landlord here!” heck you wont even see kids outside when the rent due if they aint got it
I’m not worried about the tenants so much as the people out on the block hustling that white. :-\
they aint gone try to sell to you unless you look like you wanna buy, otherwise, they know you the landlord too. funny story, i was in the beauty shop getting my hair done when the landlord walked in. my beautician didnt see him and i told her, “your landlord here”. lo and behold i was right, why was i right? the only white guy in the room-- ding ding ding, must be the landlord. so dont worry bout the trappers, they got landlords too. actually you would be surprised how many are in a position to buy properties from you-- cash.
I’m not worried about them selling to me, worried about getting ventilation holes in my shirt.
Let me ask you this about Section 8. How hard is it to evict them if they do not pay their share of rent?