Good markets for first time investors?

[Andrew McElroy]

Hi BP Community,

I am in the process of researching markets to purchase my first rental property and I thought I would ask if anyone had any suggestions, recommendations or tips.  I currently reside in Northern NJ, right outside of NYC, so I feel that my best course of action is to look into my opportunities out of state.  What are some good markets for a first time rental property investor?   

[Natalie Schanne]

@Andrew McElroy - I find that within 30 mins of my home is usually the best place to invest. My favorite place to invest is my own home when I can get an in law suite or multifamily and rent out part of my own home to nice people. I get 2.5-3% 30 year interest rates. I get free capital gains appreciation. I get tax deductions against the income. I have control. I learn. I usually don’t get screwed too badly by people lying to me about doing work they didn’t do because I can go look at it with my own eyes.

If you’re an accredited investor, you may look into syndications with people you decide to trust. Many 15-20% yielding syndications have been in texas, Atlanta/Georgia, Carolinas, Arizona, Nevada, etc. Remember most syndications essentially have you sign away that you can lose everything and they can’t be sued (unless outright fraud) because you understood the investment is risky.

We know that big REITs with lots of smart people and research have mainly been selling properties in C areas and building or buying in 24/7 cities and high growth suburbs with lots of high paying jobs. Avalon Bay and others BestRentNJ have been building new apartment communities all over New Jersey. Edison. Piscataway. If the trends were negative, why would smart people do this? I’ve found the rental market here in New Jersey is incredibly strong and most people with good jobs pay their rent on time every time.