How Do You Pick A Market To Invest In?

6 Replies

I would like to start investing out of state. I live in Charleston WV, which is OK but the economy is very slow. I would like to identify some good rental markets to invest in but I am having trouble finding a good method to identify markets. Columbus and Cleveland look interesting. This is new to me and scares me, but I really want to tackle this fear and become comfortable with  investing out of state. 

How do you Identify good rental markets?

How much vetting of the neighborhood do you do?

I’d pick somewhere where there are easily defined good middle and bad areas. Some of the cities people are flocking to here on BP are a real mixed bag and honestly I think a lot are buying into bad areas someone who lives in the area would probably have avoided. 

I’d pick somewhere you’ve at least been too once or twice and/or is cheap to fly to. 

After that it’s more about having good people to manage for you.

The grass is not always greener. If you can get your numbers within 2 hours of where you live it’s always better to do that.

I always just farm ONE neighborhood and it always has to be within 20 minutes of wherever I live. 

@Ryan Huddleston ,

The grass isn't always greener on the other side... I know nothing about Charleston, WV, but  I did a zillow search, and found a lot under $50K, which to me would be ideal!   Knowing the streets, neighborhoods, crime is a huge advantage compared to investing out of state.    

As far as vetting an area, we like trulia's crime map.. also, just analyze the current rental markets, where there are A TON, is often a bad area... and check the sex offenders list, that shows a bad area where rental qualifications are low.  

Also, let me just say...  where I invest, I say it eats investors alive, those who don't know the streets, where I invest has a bad reputation b/c people think they can just dump money and get some huge rate of return, without actually knowing the logistics.. again, huge advantage to actually be there and know the area!

Thanks for all the help. It is fairly easy to make money in Charleston. Im currently in contract on a Triplex and a Quad that cash flow great, even on a 0 down 10 year loan. I think I just worry about future decline. The job market is stagnant. Maybe I should just stick to my back yard for now. 

Originally posted by @Ryan Huddleston :

I would like to start investing out of state. I live in Charleston WV, which is OK but the economy is very slow. I would like to identify some good rental markets to invest in but I am having trouble finding a good method to identify markets. Columbus and Cleveland look interesting. This is new to me and scares me, but I really want to tackle this fear and become comfortable with  investing out of state. 

How do you Identify good rental markets?

How much vetting of the neighborhood do you do?

 Projected job and population growth combined with a good cash on cash return for the asset class/unit count you want to buy is a good place to start.  I can't emphasize enough what I mentioned in my last post; a team on the ground that you can trust, has a great reputation and most importantly, specializes in working with out of state investors is critical to saving time and money. Good luck with everything! 

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