$30,000 house in the ghetto. Needs ~ 5k it make it livable. Average house in this area rents out of like $700. Is it worth it to buy this and get a property management company to rent it out? How % do they take? Any comments ? Thanks
The "ghetto folks" will move in, pay the first month rent (if you're lucky), and then stay there rent free for the next 6-12 months until you can actually get the local sheriff to come evict them. When they finally are gone you will spend thousands of dollars fixing up the broken down filthy mess they left behind. I guess you can say I think it's a real bad idea.
Imo, on house rentals your return is either equity or cash flow. A house in the ghetto is not going to appreciate, so you are left with cash flow. Repairs are not going to offer a return on equity, so money expensed is from cash flow. Hopefully find a good tenant and offer to sell them the house after a year or so and hold the mortgage.
30k for a house in the ghetto? Thats downright expensive. I've seen ghetto houses going for $500. I think the trick is to get houses just outside the ghetto is crappy areas for dirt cheap. Rent them to immigrants and others who are more likely to pay rent than getto folk. For a couple dozen k you could become a slumlord.