What's a good growth rate?

6 Replies

Hi everyone, 

After looking at some of the forums and blog post I noticed there are certain metrics like population, unemployment, and median income I should look at when determining where to invest. But what is considered a good growth rate? If it's less that 2% should I not invest. If there is a slight decrease year over year, say .2% decrease year over year for the last 3 years, is that bad or just a small fluctuation in population?

@James Brunetto, jr Any place with a strong growth rate will Likely be an appreciation market and you’ll be paying 200k for a rental. I prefer slow and steady markets. Slight increase or slight decline is fine with me as it means the rental market for cash flow will be strong

@Caleb Heimsoth  

thanks Caleb! How do you make the correlation between relatively flat population growth = strong rental cash flow. Do couple this with information on no new housing construction to come to that conclusion? For example, if population growth is flat and no new houses are being built, then people will have to either buy or rent from the existing housing inventory?

@James Brunetto, jr I probably don’t dive that deep into those numbers. Memphis is slowly increasing, cleveland is slightly decreasing with overall suburbs staying about the same. Both are great rental markets.
@James Brunetto, jr I base what a strong appreciation market looks like by having lived in two of them in Raleigh and dfw. I just don’t want to spend more then around 120k on a rental and that’s not possible really in those areas
Originally posted by @James Brunetto, jr :

Hi everyone, 

After looking at some of the forums and blog post I noticed there are certain metrics like population, unemployment, and median income I should look at when determining where to invest. But what is considered a good growth rate? If it's less that 2% should I not invest. If there is a slight decrease year over year, say .2% decrease year over year for the last 3 years, is that bad or just a small fluctuation in population?

 Most of the Midwest had a population decrease. In my opinion that is offset by the cash flow. For you specifically I see no reason for you to invest in a growth market as you live in a low priced market. Staying closer to home will make you money as you have more market knowledge, connections and are close enough to personally jump in when/if needed.