Selecting Market to Start Investing
Hello Everyone,
I'm new to real estate but plan to enter the real estate market by making a few rental property investments over the next year. I'm looking to invest outside of my local market (Orange County, CA) given the limited cashflow opportunities in this area. I'm wondering how do most people decided on and select a strategy and market early on? I have been looking into many markets across the US and don't really know what to be looking for when trying to select a location to start investing in given the vast options available.
I am also curious on how most of you decided on a strategy when starting out? I've been considering both multi-family and single family rentals but haven't arrived at a conclusion on which I wish to pursue early on.
Any tips or suggestions would be highly appreciated!
Most Popular Reply
hey Mac!
My two cents, which may be crazy different than other people's thoughts and opinions, is find out what's most important to you. For me, it was cash flow in a landlord friendly state. I work full time so I can't manage a flip and I didn't have the capital for a BRRRR, so I saved up 20% plus closing and took on a regular mortgage as if I was buying a second home for myself.
I live in a state that's extremely tenant-friendly. You have more rights as a tenant in NY than almost anywhere else... that and property costs are insane! You can google any list of landlord friendly states and it'll give you a good starting point. Secondly, I wanted to make sure my first rental made enough money monthly that I could handle any change in the monthly payment. Honestly, I'm thankful I did. Taxes went up a couple dollars (as usual with rising values) and insurance actually went up more than I imagined, since obviously it "costs more" to replace a structure now with current supply/manufacturing/inflation changes.
I narrowed down my list of landlord friendly states by looking at home prices vs rental rates. I wanted to make about $500 a month on my first rental so I just ran numbers til I came across viable options! Obviously interest rates were much lower a year ago, so it was much easier to make more money. Hopefully this gives you an idea where you can start.