bhaw wrote:My only concern looking at this is that you are looking at a "not so nice" area of DC (your words). A quality renter isn't going to want to live in a not so nice area. If it were me, I'd find a low price property in a desirable area that would be better at attracting good tenants. Having a bad set of tenants who mess up the house or decide not to tell you about issues until it's too late because they don't care will zap all of your revenue.
Just my 2 cents.
I hear you. We've picked this spot specifically because we both feel strongly that this area of DC is going to grow considerably in the next 5-10 years. It's in Anacostia, if you're familiar with DC. It's near the water, half a mile to the metro, and 1.5 miles to Nationals Park. There are numerous developers in the area looking to purchase large plots of land to build shops, restaurants, and hopefully a town center thing. If this does happen, the value of the property sky rockets, and the quality of the tenant does as well.
I don't know the DC area at all, so this is just devil's advocate, and you may know enough to shoot this down off the bat...
What's the quality of renter NOW? If you are looking at the potential appreciation and increase in rents several years down the road, are you in a situation where you could be out more money than that is worth in the future? For example, if the area attracts bad enough renters who cause a modest $2k in damage beyond what a good renter would and they decide to not pay after 6 months of paying "semi" on time. That's probably 2 months before you get them out and a new renter in, so you are out $4500 because of bad renters that you wouldn't have been in a better area. And that's just one set. If you're looking at even 3-5 years before the area is better and the quality goes up, you could easily be $10k plus behind the 8 ball if this happens 2 or 3 times due to the area and holding the property in hopes of a better situation.
Again, I have no idea how "not so nice" the area is now or what types of renters you will get, but a couple bad ones can wipe out most of your potential gains when/if the area does improve.