New investor question
Hi Matt,
Welcome to Bigger Pockets!
I live in Joplin MO, but I work for a company in St. Louis. I have 2 long term rentals in the Joplin area. There are a lot of people on here a lot wiser than I am, but here are my thoughts.
- For your first rental I think you would be better off looking for local properties.
- The grass is always greener. I fight the opposite attitude that you have. I live in a mostly rural community and I look at St. Louis as a place of great opportunity. Seems like there are all kinds of deals and rents seem MUCH higher. So just recognize that it is sometimes our tendency to look somewhere else and think it would be easier/better there.
- Go listen to the BiggerPockets podcast episode 229. The lady on that podcast lives in Boulder CO and has 4 or 5 "vacation" rentals in St. Louis. She puts them on Airbnb and seems to be doing quite well. I mention that because it is in your area, you probably know the neighborhoods and she mentions her purchase prices on 3 of the houses; $70,000 something, $60,000 something and $50,000 something. Which all seem very reasonable even when compared to a smaller town like Kirksville.
- Having said all of that, I think you should ignore everything I've said IF it somehow puts the brakes on your desire to get started. What I'm saying is, we all do this differently and there are a thousand different ways to invest in Real Estate. If you have a plan that makes sense to you and you are ready to get started, then get started! Part of the process is being creative and seeing opportunities that other people aren't seeing yet. So, do the research, learn some info, but at the end of the day, don't fall victim to analysis paralysis. I may think St. Louis looks like a good market, you may see it differently, we could both be right.
Hope that helps. Good luck! Let us know what you decide.
Why not look in both places? You know both markets well so why limit yourself to one?
At 3 hours away you might need a property manager in the remote location so that's going to affect your profitability, and you'll need to weigh that against the possibly thinner margins locally because of competition.
Either way, let the numbers do the deciding when you find a deal.
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Developer
- REIkit.com
Chad Adams Kuba F.
Appreciate both the responses gentlemen! I truly appreciate any insight and thoughts from more veteran investors. Investing can definitely seem intimidating and overwhelming at times, but as it has been said many times before, it just comes down to making a decision and taking action! Looking forward to staying in touch with y'all, and growing in wealth and knowledge!