I decided to buy older houses and small apartments that needed fixing up. My reasoning was: I can do much of the work myself. Plus, I can buy them for much less cash down because there are fewer serious buyers for unsightly distress-type properties. I also thought that once fixed and cleaned up with a new paint job, older rental houses would command about the same rents as equivalent-sized newer houses
According to HUD (Housing and Urban Development), about 500,000, lower income rental units are disappearing in this country annually. They are being torn down for urban expansion, condomized and some, like the ones I buy, just fall down. The reasons they’re disappearing don’t matter much. The point is they’re becoming scare. In some cases the federal government is already subsidizing landlords who own what’s left. Certainly that makes as much sense as paying farmers to plow their tomatoes under or feeding fat kids pizza and french fries for lunch under the federal nutritional lunch program at school.
Because they are scarce and in such high demand, the risk of owning and operating inexpensive rental houses is almost nonexistent. That’s exactly what new investors need-non-existent risk. There are plenty of other things to worry about.
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