What state(s) should I look into buying rental properties?
Las Vegas, NV · Member since 2022 · 29 posts · 11 votes
What state(s) should I look into buying rental properties?
Most Popular Reply
Robin SimonBusiness Member
Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votesQuote from @Gregorio Villar:
Quote from @Dalton King:
I would start by looking at your local market. If you are not too into statistics, find a realtor that posts market updates/research on your local market. After looking at the different areas of your market you can put together a pretty good idea of if your market is good to invest in.
Other than localized factors there are things that are more national/federal like rates/broad price reduction.
Things like # of homes sold, on market, expired, amount of homes being bought as investments, rental rates, vacancy rates, apprecation, etc.. will help identify a good market.
great recommendation on local market. i guess that makes sense since i'm at least somewhat familiar with the area i live in and it's cheaper to do in-person research starting out.
I'd definitely agree with this - its best to both jump in and not spend too much time hesitating and to not have too high of expectations of hitting a "home run" on your first deal (rather look at it as a learning curve). Even though other markets may be better, the experience you gain if you have boots on the ground in your local market is a huge plus
Harpoon Capital514 Reviews
46 Replies
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes4y
Quote from @Gregorio Villar:
Hi Everyone,
This is my first post on BiggerPockets.
Can anyone point me to an article/video/resource that will teach me how to select the best city/state to buy rental property in and factors that I should consider when picking a location?
Thank you!
Gregory
Loaded question. It depends on many factors, how much money you have, you looking for cashflow or appreciation, do you have a team in place. Money can be made everywhere. Do you want to go where everyone is or build a niche somewhere else?
7e investments53 Reviews - Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes4y
Welcome to Biggerpockets!
The first thing you should look for is a state with fair laws. Then look for markets that are growing. Then see if the sales prices and rent rates are conducive to cash-flowing properties. Then look for areas with strong schools. Then narrow it down from there.
You should buy "Long-Distance Real Estate Investing" by David Greene, available in the Biggerpockets bookstore. He explains how to find markets.
The DIY Landlord Book4.7248 Reviews - Real Estate Agent · Melbourne, FL · Member since 2021 · 45 posts · 31 votes4y
I would start by looking at your local market. If you are not too into statistics, find a realtor that posts market updates/research on your local market. After looking at the different areas of your market you can put together a pretty good idea of if your market is good to invest in.
Other than localized factors there are things that are more national/federal like rates/broad price reduction.
Things like # of homes sold, on market, expired, amount of homes being bought as investments, rental rates, vacancy rates, apprecation, etc.. will help identify a good market.
- Las Vegas, NV · Member since 2022 · 29 posts · 11 votes4y
Quote from @Chris Seveney:
Quote from @Gregorio Villar:
Hi Everyone,
This is my first post on BiggerPockets.
Can anyone point me to an article/video/resource that will teach me how to select the best city/state to buy rental property in and factors that I should consider when picking a location?
Thank you!
Gregory
Loaded question. It depends on many factors, how much money you have, you looking for cashflow or appreciation, do you have a team in place. Money can be made everywhere. Do you want to go where everyone is or build a niche somewhere else?
thanks for the reply! i watched a few youtube videos about the same question, and it seems that a lot of the same places get recommended when considering items like median price, rent growth, price growth, average appreciation, population growth.
Median Price Rent Growth Price Growth Average Appreciation Population Growth House Supply Job Growth Median Price Rent Growth Price Growth Average Appreciation Population Growth House Supply Job Growth - Las Vegas, NV · Member since 2022 · 29 posts · 11 votes4y
Quote from @Nathan Gesner:
Welcome to Biggerpockets!
The first thing you should look for is a state with fair laws. Then look for markets that are growing. Then see if the sales prices and rent rates are conducive to cash-flowing properties. Then look for areas with strong schools. Then narrow it down from there.
You should buy "Long-Distance Real Estate Investing" by David Greene, available in the Biggerpockets bookstore. He explains how to find markets.
thanks for the welcome and reply!! i saw that looking for an areas with great local universities is a good move. also, i was playing with the biggerpockets property analysis calculator, and love it!
- Las Vegas, NV · Member since 2022 · 29 posts · 11 votes4y
Quote from @Dalton King:
I would start by looking at your local market. If you are not too into statistics, find a realtor that posts market updates/research on your local market. After looking at the different areas of your market you can put together a pretty good idea of if your market is good to invest in.
Other than localized factors there are things that are more national/federal like rates/broad price reduction.
Things like # of homes sold, on market, expired, amount of homes being bought as investments, rental rates, vacancy rates, apprecation, etc.. will help identify a good market.
great recommendation on local market. i guess that makes sense since i'm at least somewhat familiar with the area i live in and it's cheaper to do in-person research starting out.
- Detroit, MI · Member since 2022 · 118 posts · 49 votes4y
Hi Gregorio! I would be happy to chat with you about some great areas to invest in right now. There are definitely a lot of different resources and factors to consider before choosing where to invest in rental properties.
- Real Estate Agent · Fort Worth · Member since 2022 · 1 post · 1 vote4y
Hi! Welcome to Bigger Pockets. If you have any questions about the DFW market, I can answer. Here's a link to a helpful article regarding purchasing in DFW is 2022. https://learn.roofstock.com/bl...
- 4yRobin SimonBusiness MemberLender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
Quote from @Gregorio Villar:
Quote from @Dalton King:
I would start by looking at your local market. If you are not too into statistics, find a realtor that posts market updates/research on your local market. After looking at the different areas of your market you can put together a pretty good idea of if your market is good to invest in.
Other than localized factors there are things that are more national/federal like rates/broad price reduction.
Things like # of homes sold, on market, expired, amount of homes being bought as investments, rental rates, vacancy rates, apprecation, etc.. will help identify a good market.
great recommendation on local market. i guess that makes sense since i'm at least somewhat familiar with the area i live in and it's cheaper to do in-person research starting out.
I'd definitely agree with this - its best to both jump in and not spend too much time hesitating and to not have too high of expectations of hitting a "home run" on your first deal (rather look at it as a learning curve). Even though other markets may be better, the experience you gain if you have boots on the ground in your local market is a huge plus
Harpoon Capital514 Reviews - Member since 2022 · 2 posts · 0 votes4y
Hello Gregorio!
Awesome you're interested in moving forward. In general, it seems to me the best thing to do for many new investors is to house hack. If you can find something near where you currently live and use an owner-occupied FHA loan to put down 3.5% you'd be able to get into a home more quickly than trying to save 20% and investing in out of state. If you have a decent job, and it provides you flexibility, perhaps you could move to another more affordable market and obtain a duplex, triplex, or 4 plex and live in one of the units while renting the others out? If you're willing to sacrifice a bit of privacy you could also look into renting out your single-family home by the room to maximize cash flow. In general, look for markets that people are moving too, the economy and population are growing, and have favorable climate and desirability and start researching each market you find. Also, might be a good idea to actually visit the markets you're interested in. Good luck!
- Las Vegas, NV · Member since 2022 · 29 posts · 11 votes4y
Quote from @Madison Arnhart:
Hi! Welcome to Bigger Pockets. If you have any questions about the DFW market, I can answer. Here's a link to a helpful article regarding purchasing in DFW is 2022. https://learn.roofstock.com/bl...
thanks for the reference and volunteering.
i have not done much research on DFW, just Houston and Tyler
- Las Vegas, NV · Member since 2022 · 29 posts · 11 votes4y
Quote from @Robin Simon:
Quote from @Gregorio Villar:
Quote from @Dalton King:
I would start by looking at your local market. If you are not too into statistics, find a realtor that posts market updates/research on your local market. After looking at the different areas of your market you can put together a pretty good idea of if your market is good to invest in.
Other than localized factors there are things that are more national/federal like rates/broad price reduction.
Things like # of homes sold, on market, expired, amount of homes being bought as investments, rental rates, vacancy rates, apprecation, etc.. will help identify a good market.
great recommendation on local market. i guess that makes sense since i'm at least somewhat familiar with the area i live in and it's cheaper to do in-person research starting out.
I'd definitely agree with this - its best to both jump in and not spend too much time hesitating and to not have too high of expectations of hitting a "home run" on your first deal (rather look at it as a learning curve). Even though other markets may be better, the experience you gain if you have boots on the ground in your local market is a huge plus
thanks for the encouragement! i checked with a local realtor and apparently the multi-unit properties in my area (Las Vegas) are not good to invest in due to crime and other negative factors. he suggested single-family homes.
- Las Vegas, NV · Member since 2022 · 29 posts · 11 votes4y
Quote from @Ian Swisher:
Hello Gregorio!
Awesome you're interested in moving forward. In general, it seems to me the best thing to do for many new investors is to house hack. If you can find something near where you currently live and use an owner-occupied FHA loan to put down 3.5% you'd be able to get into a home more quickly than trying to save 20% and investing in out of state. If you have a decent job, and it provides you flexibility, perhaps you could move to another more affordable market and obtain a duplex, triplex, or 4 plex and live in one of the units while renting the others out? If you're willing to sacrifice a bit of privacy you could also look into renting out your single-family home by the room to maximize cash flow. In general, look for markets that people are moving too, the economy and population are growing, and have favorable climate and desirability and start researching each market you find. Also, might be a good idea to actually visit the markets you're interested in. Good luck!
hi ian!
thank you so much for the thoughtful reply.
a few thoughts
1. I already have condo in CA and a house that I currently live in in NV, so I don't think I can get the 3.5% FHA loan anymore - is that correct?
2. We have an extra bedroom in the house I am currently living in, but I cannot seem to get myself to sacrifice privacy at this point in my life.
3. I have good paying job with net positive cash flow after all my expenses, so I'm comfortable building up another down payment in the next 6-months.
4. It does appeal to me to travel to other cities, that is why I am looking into different areas.
5. Current leaders for me are Oklahoma City and St. Louis - thoughts?
- Investor · San Rafael · Member since 2020 · 376 posts · 274 votes4y
Hey @Gregorio Villar, welcome to BiggerPockets and congratulations on doing the work!
We invest out-of-state in St. Louis. I am happy to share any and all knowledge, resources, tips, tricks, mistakes, successes. We spend a few hours each week giving back to the community.
I also wrote a post on this very question if you are interested in reading it. Please do not hesitate to reach out, connect, and DM me.
Happy share my thoughts on market selection but a lot of it is also personal to you and what you are looking for. You need to consider investment strategy (appreciation, cash flow, hybrid), property type, tenant type, weather, major sports teams, population trends, employer diversity, etc.
- Realtor · Dallas - Fort Worth Metroplex, TX · Member since 2016 · 1k+ posts · 925 votes4y
@Gregorio Villar a few suggestions if I may -
First decide your budget
Get your financing in order
Decide if you want turn key or if you want to do work
And, are you planning to move anytime soon - sometimes that helps people decide.
Best wishes
- 4yJared HottleBusiness MemberReal Estate Agent · Cedar falls IA Waterloo, IA · Member since 2020 · 902 posts · 549 votes
I think definitely depends on alot of factors. I think starting in your location is always most ideal because mistakes are a lot less crippling especially if you can do some of the work or manage if you need it. However, that may not be possible in expensive markets if you have limited capital and eventually if you want to out of state invest and have some money to cover issues when they arise, building a team out of state can be great for scaling as it is nearly impossible to work in your business at a distance.
I think figure out how much money you have, if you want to do BRRR or turnkey and then start looking at areas.
Jared Hottle Real Estate59 Reviews - Specialist · Southlake, TX · Member since 2021 · 213 posts · 157 votes4y
@Gregorio Villar I would suggest checking out southern/midwest markets. They are landlord friendly, median price points, room for rental increase and appreciation! Besides those aspect, I would say the team you work with is the most important ingredient when investing out of state. Do you plan on building your own team or working with one that is already established? Feel free to reach out if you have questions. Best of luck with all your investing!
- Memphis, TN · Member since 2022 · 230 posts · 99 votes4y
Hello @Gregorio Villar
Welcome to Bigger Pockets!
Memphis is a great place to invest. It is a market with a pretty low entry price, great cash flow, and decent appreciation as well!
I would be more than happy to send you some information!
- 4yHunter TerrynPro MemberBirmingham, AL · Member since 2021 · 79 posts · 68 votes
Love me some Sweet Home Alabama!!
Specifically Birmingham and Huntsville. Highlights:
-One of the lowest unemployment rates in the country
-One of the lowest base property tax rates in the country
-One of the most affordable home markets in the country
-Huge opportunity for growth
-Great food and southern hospitality!
Let me know if I can help or answer any questions!
- Las Vegas, NV · Member since 2022 · 29 posts · 11 votes4y
Quote from @Nathan Murith:
Hey @Gregorio Villar, welcome to BiggerPockets and congratulations on doing the work!
We invest out-of-state in St. Louis. I am happy to share any and all knowledge, resources, tips, tricks, mistakes, successes. We spend a few hours each week giving back to the community.
I also wrote a post on this very question if you are interested in reading it. Please do not hesitate to reach out, connect, and DM me.
Happy share my thoughts on market selection but a lot of it is also personal to you and what you are looking for. You need to consider investment strategy (appreciation, cash flow, hybrid), property type, tenant type, weather, major sports teams, population trends, employer diversity, etc.
i would love to read that post and connect. i just sent you a message :)
- Las Vegas, NV · Member since 2022 · 29 posts · 11 votes4y
Quote from @Lucia Rushton:
@Gregorio Villar a few suggestions if I may -
First decide your budget
Get your financing in order
Decide if you want turn key or if you want to do work
And, are you planning to move anytime soon - sometimes that helps people decide.
Best wishes
thank for the concise and directed advice!
- Las Vegas, NV · Member since 2022 · 29 posts · 11 votes4y
Quote from @Jared Hottle:
I think definitely depends on alot of factors. I think starting in your location is always most ideal because mistakes are a lot less crippling especially if you can do some of the work or manage if you need it. However, that may not be possible in expensive markets if you have limited capital and eventually if you want to out of state invest and have some money to cover issues when they arise, building a team out of state can be great for scaling as it is nearly impossible to work in your business at a distance.
I think figure out how much money you have, if you want to do BRRR or turnkey and then start looking at areas.
i am getting more comfortable with accepting to be somewhat local. thanks for the words of wisdom!
- Las Vegas, NV · Member since 2022 · 29 posts · 11 votes4y
Quote from @Seth Young:
@Gregorio Villar I would suggest checking out southern/midwest markets. They are landlord friendly, median price points, room for rental increase and appreciation! Besides those aspect, I would say the team you work with is the most important ingredient when investing out of state. Do you plan on building your own team or working with one that is already established? Feel free to reach out if you have questions. Best of luck with all your investing!
i've always thought of just building a team from scratch, but would you recommend going with an established team?
- Las Vegas, NV · Member since 2022 · 29 posts · 11 votes4y
Quote from @Alex Evans:
Hello @Gregorio Villar
Welcome to Bigger Pockets!
Memphis is a great place to invest. It is a market with a pretty low entry price, great cash flow, and decent appreciation as well!
I would be more than happy to send you some information!
TN was not really on my radar, but I'll look into it now. Thank you!
- Las Vegas, NV · Member since 2022 · 29 posts · 11 votes4y
Quote from @Hunter Terryn:
Love me some Sweet Home Alabama!!
Specifically Birmingham and Huntsville. Highlights:
-One of the lowest unemployment rates in the country
-One of the lowest base property tax rates in the country
-One of the most affordable home markets in the country
-Huge opportunity for growth
-Great food and southern hospitality!
Let me know if I can help or answer any questions!
mmm southern hospitality...looking forward to that :)
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