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Owning multiple properties on the same street – Bad Idea or not?

August 5, 2012

We own 2 sets of properties that are on the same street. We didn’t necessarily plan it this way – It was just a case of being very familiar with what comes up for sale in my farm area. I don’t think the strategy is bad and feel it has several advantages:

  • Convenience – Picking up rent, maintenance calls, vacancies, all of this can be easier when you have multiple properties close together.
  • Knowledge – My knowledge of the neighborhood is so much better in areas where I own multiple properties. We are also many times finding tenants before our vacancy becomes available.
  • Control – you can screen and choose the bulk of the tenant pool that will be living on the street. If you own enough homes on a street then you can influence the rent prices. I also feel you can inspire other homeowners to keep up their properties. Investors will almost have to match your conditions.
  • Leads for new purchases – We have had a few people come to us when they need to sell their home.

The disadvantages are very few in my mind. I am concerned when one of my properties becomes vacant that my other tenant will see the sign in the yard and want to move into that place. This would not change my vacancy position at all and only cause me time, effort, and money.

One of our 2 sets of properties is in a strong Class B neighborhood. The other set of 2 properties is in a Class C neighborhood. This set has some concern due to a shift in the neighborhood. The older homeowners are all dying off and now investors are really moving in. They do cash flow nicely, are well built older homes and owner occupants just can’t get a conventional loan for a $50k -$60k purchase amount. None of this really scares me – you just have to be careful that the other landlords are not hurting the neighborhood.

I don’t think I would want to own 10 properties on the same street just for diversification – but owning several can certainly have its advantages.

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5 Comments
  1. I own a lot of houses on the same streets too.

    One of my landlord friends owns a rental in a nice City that I live. Class A rental neighborhood. They moved in subsidized housing for mentally unstable next door and now the cops are in that area weekly. He’s selling the house.

    Other then that I agree, not too many negatives.

  2. Thanks Steve. Nice to have my beliefs confirmed by someone with so many properties.

  3. MyMoneyDesign.com permalink

    I don’t own any rental houses, but I have thought about buying a house on the same street as mine. It seems like there would be a lot of the advantages you mentioned. But yes, don’t buy too many. You could end up being dubbed a slum lord! 🙂

  4. MMD,

    Thanks for stopping by. We bought on our same street years ago.. Now we have moved and converted that home to a rental. It is convenient to just walk over and pick up the rent, but I would recommend not letting your tenants know you live down the street.

    Good luck.

  5. I have two rental properties on one street also. Since the houses are only separated by two other houses, I used to worry that the tenants would compare notes with each other about rental costs, since I charge one tenant a little more than the other. But, that turned out never to be an issue.

    I agree with you that the advantages of properties located in close proximity to one another outweigh the disadvantages.

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