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Forums » Starting Out » Landlord-friendly cities

Landlord-friendly cities Subscribe to Landlord-friendly cities

10 posts by 6 users

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Real Estate Investor · TN


Brand newbie. First post.

I do not plan to limit myself to my locale, I want to start investing (probably starting with a 4 plex or an 8 plex to get my feet wet) in the best location in the nation.

Here's a few of my criteria. Can anyone help me add to the list?

And if this kind of Top Ten List already exists, please let me know.

I realize no place will score a "10" on each point, but I want to use the list to evaluate each place:

-low sales tax
-low property tax
-low wealth tax (or is it called personal property tax eg appliances, etc.)
-landlord-friendly (no rent control, fair eviction system)
-low state income tax
-low landlord business licensing fees

Any help would be great!

Thanks,
Charlie


SFR Investor · Orange County, California


Hi Charles, sorry nobody replied to your post yet. After all, BP is largely a "learning" forum. Perhaps it's your situation that's unfamiliar to most here. Am I correct that you live abroad but are looking to sink some cash into an investment property in the states?

There are a few here that do just that. I believe Uwe S. is one. Look him up. http://www.biggerpockets.com/users/alag

Lastly, are you sure a 4 or 8-plex is what you want to start out with? I would suggest most investors start out with one unit unless you plan on being completely hands-off in regards to management and place all your trust in someone else to conduct the operations. For example, it's bad enough to place 1 bad tenant in your unit because you were inexperienced in screening, but 4 or 8 bad tenants? Yikes. Just food for thought.



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Real Estate Investor · TN


Mitch,

Thanks for the reply. Yes, I am a US citizen living abroad with cash I want to invest in the US. I intend to be completely hands off (except for perhaps quarterly visits).

If I'm good at the 'property manager' screening process, would that reduce my chances of having a bad 'tenant screening' result.

I'm hoping I can start with a 4 or 8-plex for reasons I've learned here at BP viz. economies of scale. That's particularly attractive as it applies to property searches. I'd rather find one roof with 8 opportunities than have to spend money traveling around to find 8 roofs. Sound?

Thanks,
Charlie


SFR Investor · Orange County, California


I figured you'd be hiring someone for the day-to-day operations of running your rental property, considering your distance. I don't have any multi-family properties myself, so hopefully somebody else will give you more experienced advice.

For one, I would find a property manager with some multi-family property experience. From what I can gather, an 8-plex is different than a portfolio of 8 individual properties. The tenant class is more "apartment" minded and tend to be more transitory. Also, many of the systems could be shared, such as heating and hot water, and you could run into community features like a swimming pool or laundry room. There is also the issue of traveling to one location vice 8, but since your manager will be doing the "heavy lifting", including screening tenants, that's shouldn't be a big concern of yours. Basically it comes down to managent. Find a good one and it won't matter much if it's one multi-family or several single units. The opposite is true as well.

Another thing to consider is selling in the future or your exit plan. With individual properties, you can just sell one or two if you need the cash or something. With a multi-plex, you have to sell the whole enchilada or enter into some partnership by selling off a partial interest. Also, depending where you buy, individual units may appreciate more in value (for one, they'll occupy more land) where the small apartment building's value is based more on it's income at the time.


Real Estate Investor · San Diego, CA and all states


Hi Charles,

None of California is suitable (in my opinion) to being a Landlord. Any tenant who wants to stop paying rent can have free housing for 3-6 months while you pay the bills.

I'm told that all of Nevada is fine. It appears to me to be on a state-by-state basis.

Best of fortune in your business!


Real Estate Investor · Middletown, New Jersey


Friends of mine invest in rentals in Kentucky. 30 day eviction process and the landlord can put the tenant and their possessions on the curb.


· Michigan


Indiana seems to meet much of your criterea. Defitely low property taxes. I pay really low taxes on my properties there. As for cities, I avoid the larger urban counties and municipalities. Not trying to start a political debate, but i like red versus blue. Mishawaka or Goshen, versus South Bend, for example.

PG


Real Estate Investor · TN


Thanks all for the great information.

KY & Indiana sound like I need to drill deeper into those markets.

Too bad California is too tenant-friendly, but I guess CA prices might also make the cap rates lower anyway.

Brian, thanks for the reference to finestexpert.com. What a great site! I can spend hours there and learn much of what I need to know (although I can probably spend half the time at biggerpockets and learn *all* of what I need to know...)

-Charlie


SFR Investor · Orange County, California


Originally posted by Charles McDermott
Too bad California is too tenant-friendly, but I guess CA prices might also make the cap rates lower anyway.

California is a BIG place, with a variety of markets. Sure, we have multi-million dollar beach mansions that rent for $25,000/month, but we also have homes in the high desert and other rural areas that can be had for around $50,000. Anybody who says there aren't any real estate investments in California simply hasn't expended any considerable energy or time searching.

And, yes, California is considered tenant-friendly. Our liberal legislature made up of frustrated hippies still crestfallen that the 60's ended tend to write laws that favor tenants over landlords, but it does NOT take 3 to 6 months to evict a deadbeat if you do it properly. We've only had to evict a tenant once and it took about 5-6 weeks from the time of filing the unlawful detainer to when the sheriff showed up and handed us the property back. And that tenant was getting coached by someone how to drag it out as long as possible.

Finally, California real estate has historically rewarded the patient with price appreciation. For those buying now, at what can be termed "fire sale" prices, the rewards will be all the more richer.




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