Q&A and Your Emails
FAR 008 Marty from Dayton OH: I\u2019m looking at 4 or 5 possible deals that I can buy for less than $20,000 each. I can buy two of them. All of them are in the same area - it\u2019s not a great area, but it\u2019s not a war zone either. The realtor tells me they will rent well and the return will be pretty good. My concern is the value of the property isn\u2019t going to increase much over the years. What are your thoughts?
- Begin by reviewing your personal goals. If it is long term relatively passive cash flow, these may be a good option.
- One good question I\u2019ve learned to ask myself over the years is this: \u201cHow could this property kick me in the fanny?\u201d Your answer to that question may guide you. In many cities there is an ebb and flow to neighborhood quality. They are either improving or declining. This is less often the case in suburbs or small towns. Look at the larger trends in the area.
- A similar question is to consider the upside. What are the potential rewards? Barnesville, GA, 2009, $8000. $650/month rent.
- Unless you buy a distressed property or a temporarily distressed location, real estate isn\u2019t typically going to appreciate much beyond the rate of inflation. In high growth areas you will see an exception, but everything has cycles. High growth areas are good places to buy now, but even they will eventually level off.