Often when we invest in a property we want it all: good price, good neighborhood, good schools, good appreciation. We want it all…then find out how hard of an ask that is. Often if you get a good price you get bad schools. Or you pay a huge amount but experience low appreciation. Where does a sound investor go to get everything they want?
To find the answer you have to zoom out, way out. You may have to look far beyond your city and even across the country. There are towns across American where you can get a home for less than $100,000 and get the good neighborhood and schools. These are referred to as A-rated neighborhoods. According to AtomData, there are 136 neighborhoods across the U.S. that has the bargain finds. The top of this list includes: Mobile, Alabama, Detroit, Michigan, Orlando, Florida, and St. Louis.
Before you buy a plane ticket make sure to do some research. An A-rating doesn’t mean selling or renting your home is necessary easy. The economy ebbs and flows from city to city. If you don’t plan on moving there, who’s going to take care of the rental property? Are there any industries that are either shutting down or coming in? Suffice to say a cheap, A-rated home is only one of many factors.
Another interesting data point from the study was that F-rated homes are appreciating 3% more than A-rated home when it comes to annual rent increase. Good for investors, but it could have consequences when the community can no longer afford to live there.
At Ali Safavi Real Estatewe know that the perfect neighborhood can come in many different forms. If you’re serious about real estate investing be prepared to look nationwide. It may not be the easiest strategy, but it’s probably the smartest.