People often ask where I draw the line at what homes we sell to buyers or what homes we will manage for owners. My answer is always a question.
Would you live in it?
We want clean safe homes in decent neighborhoods when it come to real estate investing. Now, decent is a relative term. Where you come from, how much money you make, etc have a lot to do with what you consider decent. But to me, decent has to do with the relative value of a home in proximity to it’s surroundings.
Let me explain further. If the neighborhood the house is in is mostly rental property, it’s probably not going to appreciate along with the city or county rates. Too many rental houses bring a neighborhood down. Lack of maintenance or tenant care are usually the biggest reasons for that.
There are several neighborhoods around Kansas City where investors (usually out of state) have come in and bought so many homes in an area that I worry about the long term viability of those investments.
Clean. Safe. Maintained. In a neighborhood of “stake holders” and one that has long term viability as far as expected appreciation relative to city averages. That’s what I’m looking for in property to recommend to my investor clients. And those are the kinds of homes we love to manage.