Investing in Small Towns
Hey everyone, hoping to get some feed back on anyone's experience on this.
I was browsing through zillow and started looking in some pretty random small towns. (Marion, IN for example). The rent is fairly cheap, but the home prices are even cheaper. After doing the math, on paper some of these small town homes look like they could be great deals.
I talked to my Mom's landlord and he said he gets scared of buying in non metropolitan areas where the demand for housing is not very high. It's also hard to have faith in an area that I can't actually see. Has anyone had experience in buying in a smaller town like this? What has your experience been? Would you recommend it?
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I live in a rural town (About 2500 ppl) and below is my experience.
You have to get the house DIRT cheap. Good news is that it definitely is possible to find great deals. There's lots of bad tenants, but if you keep a quality place there's still some good renters out there. Your insurance costs will kill you, $100/mo insurance and you're only taking in $500/mo is hard to make the number work. Only count on cash return, as appreciation will be non-existent.
I personally would not invest in a market that is not growing/appreciation. Insurance and repairs are just too much of a percentage in rent IMO.