How to Choose the Right Market to Invest in Remotely

In this article

Imagine receiving a $20,000 check to purchase a rental property as well as step-by-step guidance from some of the most experienced real estate investors in the industry. Well, that’s exactly what the Dream Investment Adventure Series is all about.

 

Follow along with our contest winner, Joe, and his journey of purchasing an out of state rental property through the mentorship of Steve Rozenberg, Head of Investor Education for Mynd. Throughout the next two months, the pair will research markets, build a team, purchase a property, complete a renovation, lease the property, and everything in between—without Joe ever seeing the property in-person.

In last week’s episode, Joe established his investment strategy and goals, and the potential real estate markets were narrowed down to four.  His homework was to research Houston, Atlanta, San Antonio, and Tampa Bay and compile a list of data to analyze and compare these markets.

Related: 8 Ways to Identify the Best Places to Buy Rental Property

How to Select the Right Market

In today’s episode, Joe shares the data he collected for the four targeted real estate markets with Steve so they can select the city that best fits his goals. Let’s dive into the top four markets and some of the trends!

Atlanta

• 26 Fortune 1000 companies
• 37.3% real estate appreciation in 10 years
• 11.6% real estate appreciation in last year
• $259,000 median home value
• $1,600 average rent on a 3-bedroom home
• $59,500 median income
• 107 cost of living index

San Antonio

• 7 Fortune 1000 companies
• 43% real estate appreciation in 10 years
• 8.3% real estate appreciation in last year
• $175,000 median home value
• $1,440 average rent on a 3 bedroom home
• $55,000  median income
• 89.7 cost of living index

Tampa Bay

• 7 Fortune 1000 companies
• 47.3% real estate appreciation in 10 years
• 9.2% real estate appreciation in last year
• $219,000 median home value
• $1,640 average rent on a 3-bedroom home
• $48,500 median income
• 100 cost of living index

Houston

• 47 Fortune 1000 companies
• 48.7% real estate appreciation in 10 years
• 6.6% real estate appreciation in last year
• $185,000 median home value
• $1,650 average rent on a 3-bedroom home
• $61,000 median income
• 96.5 cost of living index

Sources of data

• BPInsights
• Census Bureau
• city-data.com
• bestplaces.net

Related: Looking to Invest Out of State? Here’s How to Pick and Analyze a City

Analysis of the Markets

It is important to look at the type of industries that are feeding a city to determine the health of the economy and potential for growth. Atlanta and Houston have a significant number of Fortune 1000 companies that offer the industry diversity that makes a market desirable.

Joe immediately narrows the choices down to these two markets for that reason and ultimately concludes he is interested in investing in the Atlanta market.

Why Atlanta Is a Great Market to Invest in

• Solid economy – Atlanta has a solid economic base due to the number of major corporations that are invested in the city.
• Appreciation has room to grow – Atlanta’s real estate appreciation over the last 10 years has seen the least amount of growth of the four markets. However, the appreciation in the past year far exceeds the others’ numbers. Joe believes that Atlanta may have more room for future growth and appreciation.
• Steadily rising rent rates – Joe is projecting that rents will continue to rise as the growth and appreciation increase based on Atlanta’s higher median income.
• Diversifying the investment portfolio – Joe owns property on the coast of North Carolina, so he prefers an inland location that is less prone to natural disasters. Atlanta is a perfect addition to geographically diversify his portfolio.

Homework Week #2: Assemble a team on the ground in Atlanta

Joe’s homework for next week is to assemble a top-notch team in the Atlanta area. When working a deal remotely, it is important to have experienced, highly reputable team members you can trust to offer you solid advice.

Joe will use the BiggerPockets Forums to network with other investors in the Atlanta area and compile a list of recommended Realtors and contractors.

In addition to contacting these potential team members, Joe will consult with Mynd’s Atlanta property manager to get their suggestions on which areas are the best to look for rentals. With access to proprietary data such as days on market, rental rates, etc. in the Atlanta rental market, they can compile a list of neighborhoods that best fit Joe’s strategy.

Once the property is acquired, the property management team becomes Joe’s essential operations team, which is vital to successfully seeing returns year after year.

Your Team Is the Key to Success

When purchasing an investment property remotely, having the right team in place before looking for a property can be the difference in your being successful or not. Communication with your team is important, and they need to have a comprehensive understanding of what you are looking for out of the property.

Tune in next week when Joe learns how to use leverage—the experience of his Atlanta team to search for deals that fit his strategy.

To learn more about Joe’s investing journey, gain access to investor tools and resources, and help your own remote investment journey, check out the exclusive destination page for BiggerPockets fans only. You’ll also find a limited-time BiggerPockets exclusive offer for property management!

 

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.