Rental Property Investor · Herriman, UT · Member since 2017 · 3 posts · 0 votes
My wife and I currently have 3 rentals in our home state of Utah. We are looking to purchase our first out-of-state rental property in the next few months. We have looked at markets in Atlanta GA, Birmingham and Montgomery AL, and Memphis TN. We’ve mostly looked at these markets because I travel to each a few times a year so there’s some familiarity. I would love to hear from those who have experience in these areas or any other possible markets I should consider. Thank you.
Welcome to BP!!! So I live in the Atlanta market, but do not invest here because of the compressing cap rates and minimal cashflow. In Georgia I invest and mainly look in the Middle GA areas like Macon and Warner Robins where I see better cashflow, but not as much appreciation on the back end. Like yourself, I have also looked in the Birmingham and Montgomery AL areas where I have found similar returns like in the Middle Ga areas. Another area I would add to your list is Greenville/Spartanburg SC as this market has really been developing over the years and I'm seeing great returns here as well in this rising market. I hope this helps and Best of Luck!!!
Welcome to BP!!! So I live in the Atlanta market, but do not invest here because of the compressing cap rates and minimal cashflow. In Georgia I invest and mainly look in the Middle GA areas like Macon and Warner Robins where I see better cashflow, but not as much appreciation on the back end. Like yourself, I have also looked in the Birmingham and Montgomery AL areas where I have found similar returns like in the Middle Ga areas. Another area I would add to your list is Greenville/Spartanburg SC as this market has really been developing over the years and I'm seeing great returns here as well in this rising market. I hope this helps and Best of Luck!!!
@Cory Eldredge I'm clearly biased, but I'm a big fan of the Birmingham market. If you have any questions about new developments in this city and why we're excited about the future, reach out any time. Happy to share our most recent market report just for your reference.
@Clayton Mobley, what about the homicide rate in Birmingham? I have one single family home on Vassar Ave and my tenant tells me she hears gunshots at times.
The greater Nashville area is strong. Areas like Murfreesboro, Antioch, Madison are all good. They are within 30 minutes of town. Prices are still fairly low on the outskirts of town and the city is growing every day so the property values in these areas will soon catch up with the crazy appreciation that Nashville has seen.
A lot of growth is coming to Nashville in the coming years. Amazon just announced a new facility here which will bring over 5,000 high paying jobs and over 13,000 jobs overall.
@Rhonda Blue thanks for the tip. I will look into Knoxville area. Are your vacation rentals in Knoxville? Our first rental was a vacation rental and we did very well until we had to convert it to long term after the city changed our ordinances.
I listed a triplex in the marketplace in S. Knoxville for a fellow agent. I also know of 2- 4plexes in Huntsville that are not listed but available for a great price.
To answer your question my vacation rentals are in Sevierville. I will PM you. I really love having the Long term rentals in Huntsville and the Vacation rentals here. We are also looking into a commercial space soon.
Closing on 2 Birmingham SFRs this month. Numbers are good and houses are more modern and look better than ones in Midwest. But Midwest may have better cash flow, think Detroit, Chicago, Cleveland, etc. Huntsville is also a very interesting area, maybe even more upside than Birmingham.
I own SFRs in Greater Atlanta and Warner Robins, GA. Great cashflow and low buy-in in WR. Great appreciation in Atlanta and OK cashflow if you can snag a foreclosure and BRRRR it. Those are getting hard to come by though, especially below $100k.
I looked at Birmingham in depth recently and it seems like a great cashflow market. But I have a feeling you'll be waiting a long time to see any kind of significant appreciation. B-ham is on the up and up, but I don't see major velocity yet, and the housing stock can get very old (my ATL SFRs are all 2000s construction and bought as foreclosure). Strangely enough, hedge funds and pensions have been buying up everything in sight over there. Could be a good sign but it seems that the result will be SFR neighborhoods treated like commercial portfolios. Be prepared to sell based on cap rates. Buddy of mine bought 35 units in two buys and is sitting pretty so far.
Knoxville I haven’t looked at in depth, but it does seem to have that velocity.
It’s tricky this late in the cycle, with rates going up and construction/home starts slowing down in many markets. I’m only looking at deals where I can buy and fix all deferred maintenance for well below market and still get decent cashflow.
@Rhonda BlueAfter a recent visit to the Knoxville area I was informed that you needed to live in your short term rental to be legal, and you could not have more than one. Apparently it's a new law taking affect today. How are going to manage this?
@Curtis Rouse thank you for your great insight. I will take a look at the areas you mentioned. Do you self manage or use a management company?
I have a property management company I started once getting into apartments. As I venture out to other markets, I will be looking at local management companies to leverage their knowledge base as they will be a key factor in a successful investment.
Closing on 2 Birmingham SFRs this month. Numbers are good and houses are more modern and look better than ones in Midwest. But Midwest may have better cash flow, think Detroit, Chicago, Cleveland, etc. Huntsville is also a very interesting area, maybe even more upside than Birmingham.
I may be biased but most definately see upside in Detroit
Certain pockets are starting to appreciate abd the cashflow is excellent
@Richard Haug Sorry but there is a lot of misinformation out there. This is from the KNOX.com news
After months of stops and starts, the Knoxville City Council approved the city’s proposed short-term rental ordinance on second reading Tuesday. The vote brings oversight to a growing business that had gone unregulated for several years.
The ordinance takes effect Jan. 2 and will allow short-term rentals (STRs) in owner-occupied homes in residential areas and in any nonresidential district so long as the renter is properly permitted.
This is in the city limits. Other cities have similar programs. My understanding is they want the Owners to be registered in order to collect the proper taxes.
Also
Sevier County big for Airbnb
""But far and away the biggest draw was Sevier County. Cities there have a total of 790 Airbnb hosts, who saw 106,000 guests and made $12.9 million, according to the company. Knoxville, Gatlinburg, Pigeon Forge and Sevierville are all among the top 10 home-sharing markets in Tennessee, Airbnb reported.""
New ordinances are being voted on every day and I do not for one second say I'm the expert but I do read the local news for the areas that I invest in to make sure try to stay informed.
knox.com is a great resource as well as the local Greater Smoky Mtn Real Estate Association.
I own and rent both Long and Short but also am an affiliate broker so It's definitely important to make sure I am sharing accurate information. BUT hey I am definitely NOT a tax professional.
I also called my local REALTOR board and it is the understanding that TN has requested that each county and city figure out some type of regulations in order to address issues regarding short term rentals but that each county, city is independent in making those decisions. Certain areas here are wholly depend on mom and pop individual owned rentals.
@Rhonda Blue thanks for the clarification on this. I was in the Knoxville and surrounding area to see what the potential is for both short term and long term. Also looks like there are areas that would be good for flipping. Getting my resources ready for jumping into REI as my next career.
@Mark K. We focus our investments a bit further out from downtown, so the crime rates aren't a major issue. Crime tends to increase the closer you get to downtown in most markets. If your property is in an area with that much crime, it's likely more of a C-class prop or lower, which isn't really our area. We dabbled in Cs orginally but quickly discovered they weren't worth the hassle. Our properties tend to be in areas like pleasant grove, adamsville, frorestdale, grayson valley, roebuck, etc. Solid B/B+ SFRs are easier to find in the more suburban, or even rural, areas. Vassar is closer in than we usually go.
My Detroit property does have better cash flow overall but I am buying in Birmingham to diversify my areas of investing. The houses in the south are newer and have more land, which I like. cash on cash better in Midwest,
My Detroit property does have better cash flow overall but I am buying in Birmingham to diversify my areas of investing. The houses in the south are newer and have more land, which I like. cash on cash better in Midwest,
Sounds good. I am all about diversifying and if the numbers work that is all that matters.
I was investing in Atlanta when entry level was much lower in 2011, today very difficult to get the numbers to work, but appreciation has been extraordinary.
I see amazing opportunities today in Detroit, very hard to get these numbers at lower price point. At the end of the day its all about making money and getting it right and the power of leverage. If the markets are rising its a beautiful thing... a bonus if you like
Sounds good. I am all about diversifying and if the numbers work then you are on a winner.
I was investing in Atlanta when entry level was much lower in 2011, today very difficult to get the numbers to work, but appreciation has been extraordinary.
I see amazing opportunities today in Detroit, very hard to get these numbers at lower price point.
At the end of the day its all about making money and getting it right and the power of leverage. If the markets are rising its a beautiful thing... and a bonus if you like
Sounds good. I am all about diversifying and if the numbers work then you are on a winner.
I was investing in Atlanta when entry level was much lower in 2011, today very difficult to get the numbers to work, but appreciation has been extraordinary.
I see amazing opportunities today in Detroit, very hard to get these numbers at lower price point. At the end of the day its all about making money and getting it right and the power of leverage. If the markets are rising its a beautiful thing... a bonus if you like