No. of Recommendations: 7
I wonder where you would get houses, in safe areas, that people would actually want to live in, and which you wouldn't have to spend a fortune maintaining for $50K. I'm just saying.

A friend of mine is doing this. First of all, to make it work, he buys duplexes, which means finding one of the few safe areas in the New Orleans area that have nice duplexes at a reasonable price. Otherwise, you get into suburban slums where crack is openly sold in the streets, people don't pay their rent, blah blah blah. You have to be really picky. But anyway, you find the duplexes, and they really all have to be in the same neighborhood. Which is close to YOUR neighborhood, where you actually live, so you can manage them, pick up rent, etc. without giving 10 percent or more to a management company which does nothing but pick up rent and doesn't catch on if a crackhead boyfriend moves in with that nice middle-aged teacher or what-have-you.

The reason for buying duplexes, in case it isn't clear, is that rents are not high enough to cover the mortgage plus property tax plus costs and still leave room for profit for most single family dwellings. This is just our area, yours may be different.

A lot of older people who still rent are alcoholics. It is a fine line to walk. He has to find people who are stable enough to pay the rent, yet not quite "together" enough to ever get a house down-payment together. At least when they move out because they bought a house, they are not bitter and they don't trash their old apartment up as a going-away present to the landlord.

That said, my friend is making money. But it is no walk in the park. And even though New Orleans is cheap as far as cities go, there is no way he could have bought any $50,000 houses to start. The condition of the houses and the neighborhoods would make it impossible to get decent tenants who pay the rent on time or even at all.

Not sure if my input will help, but maybe it will spark a few ideas?
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