How do future demographic projections affect your buy and hold decisions?

13 Replies

Right now as you may know, Atlanta, my home market, is saturated with institutional investors. It is very difficult to buy anything below retail price that doesn't have serious issues.

With that in mind, Josh Sterling's podcast and several threads from other investors I've been reading describe how they have succeeded in markets where they can buy houses below $50K (and even lower) and rent them to professionals. I find these ideas very intriguing as I look for a new place to invest, but invariably (please correct me if I'm wrong) these investors are based in cities that are slowly dying and are projected to continue to do so. Yes there will be some occasional upticks, but if you look at the long term trends driving people away they are still there and have little chance of changing.

That makes me very hesitant to commit to the long term in these places. I really consider buy and hold investing something to do for at least a ten year period and I don't want to place my money where rents and house prices are going to be stagnant at best.

I'm curious how others feel about this dilemma?

I'd be hesitant to invest in any metropolitan area that has lost population over the last twenty years especially when you consider the U.S. population has gone up over 20% during that time frame.

What are your goals? There are certainly other ways to buy rental properties than buying super cheap houses in declining areas. Is it a budget restriction you are under as to why you are thinking about that route? And yes, Atlanta is incredibly difficult for the individual investor.

What are you wanting to buy, reality aside? Budget and property type.

Ali Boone, Real Estate Agent in CA (#01911993)
310-957-2101

@Ali Boone

I'm looking for anything that will make me 15% cash on cash, will not be abnormally hard to manage and with at least inflation equivalent appreciation in rents and house price. Nothing exceptional :)

@Cal C.

It's going to be pretty tough to buy anything in a good market under $50K these days but there are markets were you can still buy good rental properties in the mid $50K range with good returns. You can easily do this in Indianapolis which is not a dying market by any means. They have a strong, diverse economy with a growing population and an unemployment rate below the national average. I do a lot in Indianapolis. Feel free to contact me or check out our website.


@Mike D'Arrigo Indianoplis... interesting.

@Ali Boone

No specific number, but obviously the less money I have to put down (I'd find a portfolio lender) the better.

BTW this was more of a philosophical question than anything. I'm basically wondering how much thought people investing in dying areas have thought about the future.


When our area's prices were too high to actually make decent returns on future rentals, our first priority was finding the top growth areas within driving distance (comfortable with less than 5 hours), then we narrowed it down from there, but potential for future growth was a major factor in where we chose to invest.

Originally posted by @Lynn M. :
When our area's prices were too high to actually make decent returns on future rentals, our first priority was finding the top growth areas within driving distance (comfortable with less than 5 hours), then we narrowed it down from there, but potential for future growth was a major factor in where we chose to invest.

Please give me warning when you plan to do your less than five hour drives to Vancouver from Annapolis! :)

Yes, Vancouver is our current outlier, which we plan to sell when the tenant vacates (going on year 4, and values are rising nicely there). We got transferred to the west coast for 3 years right after buying our first investment property in Raleigh, best laid plans, etc. Luckily, my husband is in WA for business once a year or so and can check up on that one without driving. Just spent 5 days in Raleigh making sure all maintenance is up to date down there as looks like we might be transferring again for a year or so.

"I'm basically wondering how much thought people investing in dying areas have thought about the future."

Well if the investor him/herself is old, than investing in dying places makes perfect sense. Alternatively, the Goth investor may also be interested in these areas :)

But not me, thank you very much!

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