Location, location, location. You cannot cheap out on location. Even if it costs several multiples more. In a downturn, the first areas in a city to suffer are the areas that no one really likes to live in. The popular areas are most resistant to downturns. Never buy in a town reliant on one industry. If that drops, so does real estate, maybe forever. Think Detroit.
That's partly my current situation... When Iwas 30, I bought a "handyman special" on the main street of Tobermory.It cost us $24,000 (but we split it 3 ways!) We gut it and replumbed, rewired, insulated, new drywall, knocked out a wll or two... all either ourselves or diving friends who were in the trades. Free labour got them a place to crash...
Within a year, two of us bought out the third... his girlfriend wasn't "compatible" with the place. My friend and I shared the place successfully for 17 years. Eventually I bought him out. Since then, we spruced the place up more, but it's still a modest little place.
But for location... overlooking the harbour and lake, 7 doors from the liquor store, 11 doors from the Brew-pub and not much further to two dive shops.
We want to travel a little more so we are offering it up to rent on a very limited basis this year, and we think as we do that more, it make become more of an income property.
Our $24000 investment was recently appraised two years ago at $325,000 and things are booming...
The place is well known in our local dive community and referred to as Squaller Holler. It gets enough mentioned on Facebook that Facebook generted a page for it. It's earned a 5-star rating... as a "Circus"... seems right.
Shameless plug: Wanna rent a place in Tobermory:
Squaller Holler