I'm doing research on the best metro area for multifamily investment. (10 unit+)

I go by positive migration, median income and median home price comparison.

The larger cities tend to score lower on this metric.

Some smaller cities look amazing. For example Myrtle Beach, had a 30% increase in population over 10 years, has good household income and home prices are still well below national average.  The rub is that the population is still about 300k.

I am concerned that smaller cities may not have top level professionals in every field.

Even bigger concern, is that in smaller markets vacancies may fill up slower after repositioning.

It is my first time to go out of state and multifamily. 

Right now I set a threshold of 500 000 residents for the metro.

What threshold would you set?

@Dennis Nikolaev

You’re definitely going in the right direction. You also should consider the entire MSA population in addition to the city itself.

Many of the Secondary markets that are doing very well, such as Charlotte, NC, are 800,000+.

But also look at the population trend and employment trend in the last 3 years. Are people moving in or moving out? You want to be in markets that are growing in population, growing in jobs, and where there is diversity in employment.

@Chris, you say, for the first foray,  stick to 800k+ people market? 500k people is too small.

Originally posted by @Dennis Nikolaev :

@Chris, you say, for the first foray,  stick to 800k+ people market? 500k people is too small.

500k is still a decent size market. You just want to make sure you have steady job and population growth as well as consistent occupancy. You don’t want to buy in an area of decline just stable and or growing.

@Dennis Nikolaev , those are some good things for you to look at. We use a threshold of 250K + for metros specifically. All though those metrics to determine whether a market is viable or not, present greater challenges such as lack of quality deal flow that can pencil. Although we are always looking at opportunities in primary markets, we're also open to exploring secondary and tertiary markets.

@Tj Hines What I hear you say is that a 250k people market may still provide adequate investor infrastructure but the deal flow may be limited?

@Greg Dickerson Thank you for the comment. It feels good to know that I'm not limited to the million+ metros.

@Dennis Nikolaev that is correct!

@Dennis Nikolaev

I think you're correct to want to stick to larger metros for your first OOS investment.

Smaller markets are more susceptible to be overly reliant on one or two industries to keep the local economy afloat. Also, the infrastructure available to investors is smaller. 

With that said, it's hard to say what the cut-off in terms of population is. 500k seems like a decent baseline, since it still gives you over 100 MSAs to chose from while also not being all that small of a market. 

To help you with your search I have generated a spreadsheet that lists all the MSAs in the country ordered by population. I have included a few growth and quality indicators such as home values, rent, educational attainment rate, poverty, and food stamps rate (SNAPS). Each metrics also has a 5 year CAGR associated with it so you can see the trends occurring for each MSA. 

Link to MSA Comparison Spreadsheet

Hope this helps! 

@Art Perkitny That is a hell of a lot of juicy info. Carolinas start to overshadow Florida. A huge influx of people, low prices.

Myrtle Beach is just amazing