The Benefits of Buying Real Estate in a Bad Neighborhood

When people call me, typically one of the first requests they make is for a house in a “nice” neighborhood. And this makes sense to want a neighborhood that is safe and enjoyable. But there are some benefits to buying real estate in the rough part of town or on the wrong side of the tracks. This article highlights some of them.

- There is less worry of your neighborhood going downhill because it is already downhill. Good neighborhoods can get bad and bad neighborhoods can get better. Since the price usually reflects the current condition, buying in a neighborhood that has room for improvement might be a good idea.

- If you are buying a rental, you usually get better cash flow in rough neighborhoods. If you are renting your property, there are more renters and they are more long term. It’s difficult to rent in good neighborhoods because fewer people are looking to rent and those who do are generally there short term while they look for a house to buy.

- You can look better in comparison to other landlords. Landlords in rough areas frequently don’t maintain their properties as well as people in nice areas. Therefore, if you maintain your properties, you can blow away your competition, and charge more for it.

- If you are in a rough neighborhood, you can propose that your property change will improve the neighborhood and you have a better chance of getting a different zoning. Conversely, if you are in a good neighborhood, it’s hard to make the same argument.

- You can buy more property. If you want to spend 500k, you can either buy one house in an upscale neighborhood or six or seven houses in a rougher neighborhood.

- They’re more recession proof. When the economy goes south, real estate in rough neighborhoods is less affected.

In summary, I am not saying you have to buy in a bad neighborhood. But simply that if you are looking for long term investments sometimes its a good idea to wander over the tracks and look around a bit.

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and do we need to get an appraiser or do we ask for a average price of about what the houses are selling for in our neighborhood? We already have an interested person, but do’nt know how to set a price? Any help is appreciated!

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Hi, I’m relocating to Orange County from Minnesota and would be renting a townhome soon. I have a 3 year kid and am very particular about finding a safer and better home for him. Is there any website for apartment ratings which covers details like maintenance, neighborhood, any sex offenders/child abusers in the area etc.

Thanks!

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We moved into our new home Dec 2005 in Jax, FL. A few months later, my husband recd a job offer from Microsoft, so we moved to WA. Due to high home prices in Redmond, WA, we decided to rent a place in WA. So far, since May, we have had to pay a mortgage payment and rent payment each month that total aver K. After settling from the move, we looked into selling out home in FL. The home builder has now dropped their prices for new construction in that neighborhood. When we moved, the home that we bought for 0K was selling for 0K. Currently, the new homes are 6K. We have been trying to find a renter knowing that we cannot get the entire mortgage payment (65), and have dropped our asking rental price down to 00. Still nothing. It’s a brand new place, nothing’s wrong with it and is in a fabulous location.

What are my options? We can no longer afford to make this mortgage payment and are in serious financial trouble.

TIA!
A appreciate everyone’s quick responses.

To AEN – in case there was any confusion, there is negative equity. We currently owe 2,000 and the current retail is 6,000.

I don’t want to be foreclosed one and have my credit ruined. That’s why I’m researching other alternatives.

What exactly is a short sale?
If the lender okays it, do I just get a normal signature loan for the difference?
Should I get in contact with a mortgage broker, as well?

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I am in the process of purchasing a new home to live in. My existing home is in a neighborhood where places sell and rent out rather quickly. I have equity in the home equal to about 1/2 of the current value of the home. I am thinking about selling. Some people think I should rent it out. What are the tax advantages of renting it out? I still have a mortgage on it. Can I write off any of the interest on the mortgage? If someone can direct me to a good book or website to help me out, that would be wonderful. Thanks!!

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Hi, I’m relocating to Orange County from Minnesota and would be renting a townhome soon. I have a 3 year kid and am very particular about finding a safer and better home for him. Is there any website for apartment ratings which covers details like maintenance, neighborhood, any sex offenders/child abusers in the area etc.

Thanks!

Technorati Tags: apartment ratings, child abusers, neighborhood, orange county, sex offenders, townhome

I have a home in a neighborhood where houses are selling for between 170000 and 190000. The house needs a little work, but a realtor told me a couple of weeks ago that with 2000 worth of repairs(carpet, paint, and a bit of landscaping) it could reasonably list for 179000. His commission is 6%. I haven’t signed a contract yet. I am aware commission is negotiable. My situation is I don’t have the 2000 for the repairs and have no way to come up with it in the near future. My payment is going to increase 0 next month and I can’t afford it. Refinancing is not an option. I absolutely have to walk away with at least 160000 and I need to sell pretty quickly. When talking with a realtor should I express my urgency to sell? Should I tell them up front that I have to make 160000 after their commission and closing costs? If I shared this info with a realtor would it hurt my chances of them trying to get me any more than 160000? How should I approach this? Thanks.
I am going to do the painting myself. The carpet is terrible. I want to put in something very cheap but more importantly clean. I just don’t have any extra money. I am in the middle of painting, but currently can’t even afford the paint I need to finish. As far as landscaping, really all that is needed is a few bags of mulch, otherwise the house looks pretty good from the outside.

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Any tips on neighborhoods to keep in mind would be helpful. I would love to be in a hip, artsy, kind of neighborhood if possible. I am just clueless at this point. Thanks!!!

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I found a home I love in Minneapolis located in the neighborhood I wanted. Its last appraisal according to tax records was at 190k. It went into short sale initially at 148k then dropped to 90k. Structurally the house is fine but needs some work and a lot of cleaning (the owners left behind a huge mess). I’m estimating approx. 20k in improvements and repairs.

Right now I’m strongly considering putting in an offer. I have financing and looking into getting an FHA 203k streamline loan. I’m also in no hurry and have 6 months until my current lease runs out. On top of that I have a great loan officer and real estate agent who have experience in short sales.

I’m pondering putting in an offer for 100k and then taking out an FHA 203k for 120k. Time is on my side but I’m wondering what the likely hood is of the bank accepting an offer.

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Since i’m moving to Minneapolis, MN my family wants to live in a neighborhood where there are lots of latinos i want to know if there’s neighborhoods like and if there is can you tell me where

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