I have yet to make my first real estate purchase and I am ready to get into the game. Due to the nature of my job (I move around a lot), I HAVE to invest out of state. With that, I want to make my purchases in a state or states where I have the highest likelihood of success using the BRRRR method.
My general thought process is to first determine the state(s) and then work to figure out which city or cities within that state I want to invest in. From there I start the real work and build out my network and make some offers.
In your opinion, what criteria make a state a "good" state to invest in? Here are a few things I have considered. I would appreciate further input and insight as well as any suggestions for good states.
- Investor friendly laws
- Landlord friendly laws
- Favorable tax law in general
- Generally increasing population or population growth drivers
- Positive trend in demand for rentals
- Low maintenance states (if it is such a thing). My thought here is along the lines of areas prone to weather damage year after year. Not necessarily "one-of" events such as Katrina in the Gulf. I've never lived in the Northern United States, but I would assume that their cold winters would have a higher maintenance/upkeep cost than areas with more moderate climate conditions.
I doubt that there is any one state meets all of the above criteria. However, I imagine that there are people in every state who have profitable rental units. My hope is that doing a little research on the front end will improve my investment experience overall. Thank you all for your help.
Hey Eric, welcome to BP. Firstly, you nailed it by saying there are cities in every state where people are making money and finding deals. One question I have for you is 'do you have connections or know anyone in a particular area already'? If you had a cousin or an old college buddy that lived in City X, it may be a good idea to simply start the search there. As an out of state investor myself, I prefer to start my search in places where I don't have to start building my investment team totally from scratch.
I hope this helps, but send me a PM and I'd be happy to share some additional thoughts with you.