Over the years I've had on-line and off-line discussions with people about my philosophy of owning
income property around
Kansas City. I'm basically a snob when it comes to real estate investing.
I want quality rental property. I want my rent homes to be in good neighborhoods that will attract a middle class tenant. I want my properties to be in neighborhoods that appreciate.
I want a lot of things. I want my rental property to be in a neighborhood that will sell in good times and bad. I want 5% or less vacancy in good times and bad. I want rental property that pays for it's self but doesn't necessarily kick off cash flow.
Why?
Because of now. That's why. I have two clients with income properties that they acquired before we met. One is soon to be vacant on both sides and we can't seem to sell it for anywhere near what he paid for it. The other has had a vacant side for the better part of 6 months and quality clients are seemingly impossible to find. One is in Missouri (Independence). One is in Kansas (Kansas City). Neither I would have probably even shown them let alone wrote up a contract without serious counseling from me to not purchase.
Meanwhile, my own personal rental property located in a pretty upscale neighborhood (for a duplex neighborhood) has been vacant for zero days and I already have a couple of applications in. You see, the current renters that are in my income property have been there three years and I just helped them buy a house that closes next week. I put up a For Rent sign two weeks ago. On August 1st I'll have new tenants moving in. The rent will be 8% higher than it was three years ago.
Yes, in these "bad" times with increasing vacancies for lower end income property my middle class three bedroom, 2 bath, one car garage half-duplex located in Olathe, Kansas will have new tenants in with zero days vacancy!
I stretched and stretched and stretched to afford that half-duplex rather than buy something that was less expensive in a less desirable neighborhood. And I'm glad I did. Realizing that not everyone can do the stretch I would encourage you to save and save until you can upgrade if you are thinking of making your first investment property purchase.
Now, you need to understand what I'm saying. Price isn't necessarily the determining factor on a quality neighborhood or property. Far from it. But it can be everything. You probably need professional help to determine the difference.
Real estate investing is not rocket science. But it is a study that needs to be taken seriously. Finding a quality income property will make your real estate investing life so much easier.
