When people call me about buying Arizona Real Estate, 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. However, 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.
1) There is less worry of your neighborhood going downhill because it is already downhill. Good neighborhoods can go bad and bad neighborhoods can get better. Because the price usually reflects the current condition, buying in a neighborhood that has room for improvement may be an excellent idea.
2) 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 stay longer. In general, it's difficult to rent in good neighborhoods because fewer people are looking to rent and those who do are generally there short-term. Why? Because many of them have good credit, professional, with decent income, and are capable of buying rather renting from you. They may be awaiting for their home to complete building, or waiting for the right home to come along and that usually takes no more than one year.
3) 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, can charge more for it, and rent out a lot quicker.
4) 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. A good example is the location around the up and coming light rail on Camelback-Bethany Home Road and 19th Ave. in Phoenix. Another example would be around Van Buren and 40th street near downtown Phoenix.
5) You can buy more property. If you want to spend $500k, you can either buy one house in an upscale neighborhood or three or four houses in a rougher neighborhood. You would definitely earn more income on three or four than you would on one. Not to mention, when your $500K property is vacant, it is 100% vacant without income. While it is unlikely that all three or four homes in a rough neighborhood would be empty at the same time. Consequently, you would have much better cash flow and this is what you want out of any investment!
5) You can buy more property. If you want to spend $500k, you can either buy one house in an upscale neighborhood or three or four houses in a rougher neighborhood. You would definitely earn more income on three or four than you would on one. Not to mention, when your $500K property is vacant, it is 100% vacant without income. While it is unlikely that all three or four homes in a rough neighborhood would be empty at the same time. Consequently, you would have much better cash flow and this is what you want out of any investment!
6) Homes in rough neighborhoods are more recession proof. When the economy goes south, real estate in rough neighborhoods is less affected.
7) Finally, I am not saying you have to buy in a bad neighborhood. But simply, if you are looking for long-term investments sometimes it's a good idea to wander over the tracks and look around a bit. There is a saying that successful people do things that others don’t want too!For more FREE reports, local information, economic data, real estate buying/selling/investing tips, and perform property search directly from the Arizona MLS (see over 57,800 homes currently for sale) visit out site at http://www.nohardsalerealty.com/.
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Have a great week everyone!
