Why doesn't everybody buy Rentals down South?

9 Replies

Let me start by apologizing if this is posted in the wrong spot or with the wrong headings, but I've been developing my life around my strategy, and am actually going to move to NC/SC to live and buy rental properties. My units in PA had pipes freeze this winter and I got to thinking: Why deal with this if I don't HAVE to?  The duplex is built in 1910, cash flows well, but has snow sitting on the roof half the year, I have to replace the furnace already, worry about ice/snow removal, and of course, had to pay for that frozen pipe (that goodness it didn't burst).   

I'm moving to be an owner occupant of one or multi-family homes and hopefully get the benefits there (tax/mortgage) before I buy a SF.  

I know people like to invest local, have different strategies and look for the best cap rates in decent neighborhoods, but can't everyone find that down South also?  

Why deal with the cold and the older homes?

Because if you know what you are doing you dont have to escape to the south. Insulate your attic properly and the snow can sit on the roof for 12 months without problems. Maintain your mechanical systems and set up a capex reserve account and dont worry about replacing the furnace. Buy a shovel and some ice melt. Snow removal is good exercise. And insulate your pipes or find the reason they froze and fix it. Have fun in the south when a hurricane hits and your properties are flooded and your central air needs replacing. 

@Rob Beland , the funny thing about hurricanes is they mainly affect coastal areas and they don't affect all the south all the time.  In northern states, it gets cold everywhere every year for many many months.

But, yeah, every area has its pros and cons.  It's just like discussing expensive markets (LA, NYC) versus inexpensive markets.  Or like discussing more expensive properties versus less expensive higher cash flow properties.  There is no right or wrong answer for any of these debates.  Success can be found anywhere, any time, but not by anyone.  

All great points, thanks.   Hopefully a hurricane doesn't wipe me out.  I guess my post was adversarial towards investors in the colder climates and well deserving of that response.

It's just with: vacancies, repairs, and all of the other issues that arrive on us all, why not eliminate the need for a furnace? I mean, just overall: moving past hurricanes, would it not make more sense to look for cash flow in Phoenix, rather than Maine?   

Just hypothetically, sorry to offend... 

Compare household income or net worth in Massachusetts or New Hampshire to North or South Carolina.  And understand that income is a binding constraint of real estate values and rents.

As a investor in Georiga, you will be replacing your AC just like you would the furnace up north. It's 6 of one and half a dozen of the other. Everything is relative. Also consider that pest control is much more important in the south as well as termites/bonds. And no I'm not just talking out my a hole, I lived in Michigan for 5 and Iowa for an additional 20 years so I can say with 100% certainties that everything is relative.

@Nicholas Schwab

you don't save on HVAC systems like your thinking by investing in the South... Just trade warmth for cooling... to attract quality renters and in many states in the south to qualify for HUD you need central Air that works.. along with heat in the winter.

The only place you do not have to worry about mechanicals at all in the US  is HAWAII were you no need for Cooling or heating.. 

And as for hurricanes wind hail tornados that's what proper insurance is for.

Wow, great input on the pest control and HVAC systems. I'm glad I threw it out there and really appreciate the feedback on here.   @ Jay Hinrichs: I was stationed in Hawaii and agree about the systems out there.   I guess I'm still just trying to identify my niche. 

I personally want to live in the warmer climates and invest locally.  I have lots more research to do.

Again, thanks for all the input, I'll be sure to post my progress on here...

Originally posted by @Jay Hinrichs :

@Nicholas Schwab

you don't save on HVAC systems like your thinking by investing in the South... Just trade warmth for cooling... to attract quality renters and in many states in the south to qualify for HUD you need central Air that works.. along with heat in the winter.

The only place you do not have to worry about mechanicals at all in the US  is HAWAII were you no need for Cooling or heating.. 

And as for hurricanes wind hail tornados that's what proper insurance is for.

Amen to that.

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