DEAR BOB: In his book, "How to Prosper During the Coming Bad Years," Howard Ruff says that real estate investing in small towns in the thing to do. Do you agree? Alice S., Upper Marlboro.

DEAR ALICE: Opportunity is where you find it. Both large and small towns offer real estate investment opportunities. However, a few large cities now have anti-investment politicians who made profitable investing there impossible. Get to know the town's politics before you invest there.

My criteria for real estate investing is different than Ruff's, but I do agree that small towns can be good places to invest. However, there are "bad" small towns to avoid, such as those with declining populations or only one major industry.

Before investing, I ask (1) are the public schools good enough to attract and keep families with children and (2) is the population growing? If the answer to at least one of these questions is yes, then the town deserves further evaluation for possible real estate investment.

DEAR BOB: Can I continue depreciating my store building even if it has been vacant for 15 months? Gertrude T., Washington.

DEAR GERTRUDE: Yes, as long as you hold the building for rental.

DEAR BOB: My mother is in a rest home and I have to sell her house. It hasn't been taken care of in recent years and needs extensive work, such as painting, new carpets and a and thorough cleaning. Do you think this work should be done before putting the house up for sale? Charles M., Laurel.

DEAR CHARLES: Yes, but don't go overboard. Perhaps just the cleaning and painting will be sufficient to make the house attractive to a buyer. Putting in new carpets could be costly and you may select a color that potential buyers don't like. But if you decide to install new carpets, choose a neutral color.

DEAR BOB: If I don't pay my property taxes, is it true my mortgage lender can foreclose? Bruce C., Washington.

DEAR BRUCE: Yes, property tax default allows mortgage acceleration.

The Bruss report, "How to Maximize Your Profits When Selling Your Residence," is available for 25 cents plus a STAMPED self-addressed envelope sent to Robert J. Bruss, P.O. Box 6710, San Francisco, Calif. 94101.