Looking to buy a lower end rental property....advice? (Dallas: section 8, best neighborhoods)

[jw461]

I'm in the market to pick up a lower end rental property. I already have a nice rent house, so I have some experience as a landlord, but I have great tenants so I haven't had to deal with a lot of the nightmare renter BS. Looking to pick up another property, but I don't have a lot of cash to drop--maybe $20k-30k.

This puts me in the market for a 1-2br condo, in probably one of the less desirable parts of Dallas:
Vickery Meadows
Skillman
Forest and Audelia
Abrams and 635

East Dallas or Garland would be great, but there's not much of anything in this price range there.

Not interested in Fair Park or Oak Cliff areas.

SO, there's plenty of bashing on all these areas, but given these (or other suggestions), what do you experienced landlords think? Or if you're my target audience I'd be interested to hear your opinions too. If you live in McKinney or Frisco and think of trips south of 635 like entering Mogadishu, I have no interest in your opinion unless it's constructive.

[Lakewooder]

I would stick to the area between Greenville and Skillman just south of Lover's Lane and the Village in 75206. I am a small time landlord, but don't own any condos. I don't know if you can find anything that cheap - about the cheapest I have seen was around $40K for a one-bedroom - however, I think that's one of the only places it makes sense.

I recently met someone who does this in that area, but he concentrates on two-bedrooms and upscales them with stainless steel appliances, etc. - I think he told me he is getting around $1200 - $1500 rent on things he purchased for less than $100K, probably around $70 or 80K I would guess.

That area is between the Park Cities/SMU and Lakewood/White Rock Lake - it's next to great shopping such as Central Market, near 3 DART Rail stations, the Katy Trail is being extended there and it's in Stonewall Jackson Elementary and secondary schools offering IB.

[TurtleCreek80]

Condos are tricky to make cash flow work due to HOA fees and the ever-looming potential for assessments for major repairs. Plus, they rarely appreciate much or at all, even in the best neighborhoods.
Plus, Section 8 renters (which is what the areas you're targeting attract) open up a whole 'nother list of risks (late rent, no rent, multiple extra people living there, illegal activities or occupations, damage, destruction, efc).


My advice would be to look for an $80-100k home that you can put a little "sweat equity" into and take out a small mortgage. You'd more than cover a $300-400 mortgage plus taxes + insurance with the rent and you could pay it off within 5-10 years. Far East Dallas, Garland, parts of Richardson, parts of NW Dallas could fit the bill. I'd rather be a landlord in a solid, STABLE "blue collar" neighborhood than deal with what you *could* attract in Five Points and those unsavory LH complexes.

[Lakewooder]

Yep there is so much 'out of your hands' dealing with a condo association...more control on a single family. I am not really sure where to buy or I would do that myself. I am thinking what we used to call "Casa View" might be a good spot for this..

[ChristieP]

I agree with TC80: that demographic is asking for trouble. Be prepared to have to totally renovate if your renters trash it...

[cmw2133]

I'd just as soon try to find a low-quality 2BR home in Lakewood, M-Streets, or Junius Heights. There's no real shortage of them. They're a higher price point--maybe $200K, maybe less than that, but you could potentially attract a higher quality tenant after some relatively superficial renovations.