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oksanaputina

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Posts: 1
Reply with quote  #1 
Hello all I am new here and had some questions. Do you think it would be a good idea to buy a 60,000$ house in a not so great area and charge rent? Specifically in Milwaukee WI. I would be buying it in cash, and I live far from Wi. It would be in a low income area as well. What do you think?
LLinVA

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Posts: 359
Reply with quote  #2 
1 - Long distance landlording can be a major problem. It makes it a headache every time anything happens. It is difficult to make sure the property is being cared for and can lead you to be more forgiving of things you shouldn't be forgiving of. Ideally, you want properties within a reasonable drive that you won't mind doing at least monthly, even just to take a look at the outside to make sure things seem right. I wouldn't get anything further than 30-45 minutes from my home for this reason.

2 - Low-income tenants are more of a headache and you are more likely to have problems, but they can be more profitable. Because of the extra drama, I definitely wouldn't have them long-distance. I would want it even closer so I can definitely keep a close eye on the property. 

3 - We can't tell from this if this is a good investment. Without knowing what you could rent it for, what other investment options you have, etc., we can't even begin to say yes or no based on the numbers. The long-distance part would be my reason to say no to this, even if everything else looked good.
Raniyah

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Reply with quote  #3 
I agree that long distance landlording is difficult but you can manage it. And in the start, in my opinion, it is a good step to invest in these areas. After this, you can invest in your own area or maybe in those areas which are closer to your place.
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LLinVA

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Posts: 359
Reply with quote  #4 
No. Long-distance landlording is a pain. Has anyone ever done it well? Of course. But no one should go out of their way to get a place in a bad area far away from them when they could put that money into something they are closer to and could do better at. There are probably much closer bad areas if they don't mind the hassle of that type of renters. It is not going to make them more likely to be successful to do this situation. They should look for something closer.

No one has ever recommended, "Get into real estate, but make sure it is far from you, it makes it more complicated which means it's more exciting!" 
OHlandlord

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Posts: 3,761
Reply with quote  #5 
I agree with LL in VA.  Being new to LLing and buying a property that is in a bad area, buying far away, and buying a property in a low rent area all sound like bad ideas.  Combine them and you have a terrible idea.  A good rule of thumb should be to buy the worst property in the best neighborhood.  You can always improve your property, you can't improve the neighborhood. 

Instead, use the $60k as a down payment on a better home in a closer neighborhood.  If you are determined to buy for cash far away, first find a good property manager/Realtor to find you a great rental in an acceptable area.  I'm closing next week on a 3 bedroom, 1 bath (with another bedroom and bath in the basement) in a great school district for only $63,000. Those deals can be found but you have to look!
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