Where are we investing in 2020?

Real Estate Broker · Pinellas County · Member since 2016 · 166 posts · 114 votes

Where are we headed for 2020? What do you think the trends are? Where are the next new areas to invest in?

My thoughts and experiences. The trend of population migration into the south will continue. Southeast is starting to see lower returns. Most of Florida and Georgia I’m seeing very low returns. Northeast still high but might take a dip but I’m not sure if it will be enough. NY politics worry me.

Not too much knowledge on the west or mid west states. Maybe these are the next areas to get into?

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David Smith

Rental Property Investor · NJ/PA · Member since 2016 · 555 posts · 149 votes

Every state and city has good properties.

Does it matter ?

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Trent Chance
Member since 2019 · 94 posts · 75 votes
6y
@Arthur P. Check with @Michael Ealy on hotels.
0 Reply
Taylor L.
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
6y
Originally posted by @Arthur P.:
@Taylor L. 100%! Never go for cheap. What areas are you investing in?

Kentucky, Carolinas, Texas.

0 Reply
Nick Rutkowski
Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
6y
@Arthur P.
NY has high taxes and new regulations they just implemented. Great if you live in Upstate NY because big companies avoid the region due what I stated above. It’s most likely where my next investment will be because I’m still in the “buying local” phase. Eventually, I’ll be buying in Florida for the snow birdies. I do STRs and Florida is a great place for AirBnB/long term tenant mixes. There’s a sweet Spanish castle in Tampa I want but a boy can only dream...
1 Reply
Arthur P.
OP
Real Estate Broker · Pinellas County · Member since 2016 · 166 posts · 114 votes
6y
@Taylor L. Good luck! What kind of returns are you getting? Type of properties?
0 Reply
Arthur P.
OP
Real Estate Broker · Pinellas County · Member since 2016 · 166 posts · 114 votes
6y
@Nick Rutkowski are str’s a lot of extra work? Where in NY are you investing?
The new law which I still haven’t studied fully worried me.
0 Reply
Nick Rutkowski
Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
6y
@Arthur P.
They are when you’re starting out. Mostly turning over for guests takes the longest time but the trade off is I’m not always fixing my house after tenant turn overs. The best advice I got was to hire a good cleaning lady so you don’t have to do the turn overs.
The new laws are the reason why I’m looking elsewhere and staying away from long term tenants.
0 Reply
Chris Salerno
Rental Property Investor · Charlotte NC · Member since 2019 · 306 posts · 183 votes
6y
Originally posted by @Arthur P.:
Where are we headed for 2020? What do you think the trends are? Where are the next new areas to invest in?
My thoughts and experiences. The trend of population migration into the south will continue. Southeast is starting to see lower returns. Most of Florida and Georgia I’m seeing very low returns. Northeast still high but might take a dip but I’m not sure if it will be enough. NY politics worry me.
Not too much knowledge on the west or mid west states. Maybe these are the next areas to get into?

We are looking very heavily in the Carolinas and southeast major markets.
0 Reply
Bryan MitchellPro Member
Rental Property Investor · Columbus, GA · Member since 2016 · 634 posts · 337 votes
6y
Originally posted by @Arthur P.:
@Bryan Mitchell I agree 100%. My best returns are just outside or next to primary markets. Share any areas you know of?

I’m finding a lot of investors (Californians abound) are coming to Atlanta, but the pond is been not so full of fish. I like being close to my home (2+ hours). So I’d focus on those medium sized cities within a short drive.

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Bryan MitchellPro Member
Rental Property Investor · Columbus, GA · Member since 2016 · 634 posts · 337 votes
6y
Originally posted by @Chinmay J.:
Originally posted by @Arthur P.:
Where are we headed for 2020? What do you think the trends are? Where are the next new areas to invest in?
My thoughts and experiences. The trend of population migration into the south will continue. Southeast is starting to see lower returns. Most of Florida and Georgia I’m seeing very low returns. Northeast still high but might take a dip but I’m not sure if it will be enough. NY politics worry me.
Not too much knowledge on the west or mid west states. Maybe these are the next areas to get into?

In last couple of yrs I have realized that the returns on paper are most often not realized in practice because of two reasons:

a) Quality of tenants

b) Quality of management.

Quality of tenants is directly dictated by location. I would rather buy in a good location with good tenant pool for lower returns, than in an undesirable area with high on paper returns (which can often turn out to be lower returns in reality).

Quality of management is directly dictated by who is managing the property. When you hire a PM, usually he/she will end up making all the money.. No one can manage the property better than you, yourself.

Personally, I learned these lessons the hard way. I had some class A, B+, C and D properties. I sold off Class C and D (long distance) properties and invested money in Class B properties for less but steady returns I am no rookie managing properties, as I have had A & B properties way before I purchased my class C & D Properties.

As a disclaimer, I do have a full time job that pays very well. I love my career, and absolutely have no desire to do Real Estate full time. I invest for creating wealth and of course added tax benefit. At retirement, which is about 30 yrs away, I will have a lot more WITH real estate than I will WITHOUT real estate.

So this year, I will buy close by if i can find a good deal. Maybe even partner up with someone.

Sounds like you’re a DC-Baltimore kinda person. Tough market but not impossible. I lived there in 2009-2011. I looked for places but just could not find anything under $300k or that much over 1%. I guess I was too uneducated at that time.

0 Reply
Chinmay J.
Investor · Northern, VA · Member since 2016 · 1k+ posts · 904 votes
6y
Originally posted by @Bryan Mitchell:
Originally posted by @Chinmay J.:
Originally posted by @Arthur P.:
Where are we headed for 2020? What do you think the trends are? Where are the next new areas to invest in?
My thoughts and experiences. The trend of population migration into the south will continue. Southeast is starting to see lower returns. Most of Florida and Georgia I’m seeing very low returns. Northeast still high but might take a dip but I’m not sure if it will be enough. NY politics worry me.
Not too much knowledge on the west or mid west states. Maybe these are the next areas to get into?

In last couple of yrs I have realized that the returns on paper are most often not realized in practice because of two reasons:

a) Quality of tenants

b) Quality of management.

Quality of tenants is directly dictated by location. I would rather buy in a good location with good tenant pool for lower returns, than in an undesirable area with high on paper returns (which can often turn out to be lower returns in reality).

Quality of management is directly dictated by who is managing the property. When you hire a PM, usually he/she will end up making all the money.. No one can manage the property better than you, yourself.

Personally, I learned these lessons the hard way. I had some class A, B+, C and D properties. I sold off Class C and D (long distance) properties and invested money in Class B properties for less but steady returns I am no rookie managing properties, as I have had A & B properties way before I purchased my class C & D Properties.

As a disclaimer, I do have a full time job that pays very well. I love my career, and absolutely have no desire to do Real Estate full time. I invest for creating wealth and of course added tax benefit. At retirement, which is about 30 yrs away, I will have a lot more WITH real estate than I will WITHOUT real estate.

So this year, I will buy close by if i can find a good deal. Maybe even partner up with someone.

Sounds like you’re a DC-Baltimore kinda person. Tough market but not impossible. I lived there in 2009-2011. I looked for places but just could not find anything under $300k or that much over 1%. I guess I was too uneducated at that time.

Not Baltimore... DMV area. There are lot of cheap properties in and around Baltimore. If you have bullet dodging skills, you can even land a property for $50K - maybe even cheaper...

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Bryan MitchellPro Member
Rental Property Investor · Columbus, GA · Member since 2016 · 634 posts · 337 votes
6y
Funny, I’ve always considered Baltimore as part of the Great Baltimore Washington Area. Many trips along the BW Parkway on the way to BWI.
0 Reply
Matt Higgins
Property Manager · Blaine · Member since 2015 · 209 posts · 276 votes
6y
@Arthur P.
I am starting to worry about inflation. Wages are finally starting to rise and we are at full employment, cost of living increase was 2.1% last 12 months (highest in awhile), housing pricing continue to rise, commodities like oil could increase with Middle East spat, the worlds balance sheets continue to expand and at some point the race to the bottom in regards to interest rates should end.
Sell bonds and buy gold?
1 Reply
John Teachout
Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
6y
We're investing close to where we live. We're "forced appreciation" buy/hold investors and if a property is more than about 30 miles from us, it's out of our zone. It usually takes us several months to fix up a property which we'll work on 5 days a week so we want it "close". Deals have been hard to find. We only acquired one house in the last two years and we're looking all the time.

1 Reply
Chinmay J.
Investor · Northern, VA · Member since 2016 · 1k+ posts · 904 votes
6y
Originally posted by @Bryan Mitchell:
Funny, I’ve always considered Baltimore as part of the Great Baltimore Washington Area. Many trips along the BW Parkway on the way to BWI.

There was some love back in the day, and I would have entertained that thought but Peter Angelos screwed that up. No love anymore. LOL

1 Reply
Bryan MitchellPro Member
Rental Property Investor · Columbus, GA · Member since 2016 · 634 posts · 337 votes
6y
Originally posted by @John Teachout:
We're investing close to where we live. We're "forced appreciation" buy/hold investors and if a property is more than about 30 miles from us, it's out of our zone. It usually takes us several months to fix up a property which we'll work on 5 days a week so we want it "close". Deals have been hard to find. We only acquired one house in the last two years and we're looking all the time.

John, why are deals now harder to find there?

0 Reply
Bryan MitchellPro Member
Rental Property Investor · Columbus, GA · Member since 2016 · 634 posts · 337 votes
6y
@Arthur P., what size apartments are you considering? Do you consider what private equity firms, institutional lenders/investors are looking for and compared that to low level investors and find a “sweet spot “?
0 Reply
Bryan MitchellPro Member
Rental Property Investor · Columbus, GA · Member since 2016 · 634 posts · 337 votes
6y
@Syed H., like you I believe economic resilience is key and one of my top concerns.
0 Reply
John Teachout
Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
6y
Originally posted by @Bryan Mitchell:
Originally posted by @John Teachout:
We're investing close to where we live. We're "forced appreciation" buy/hold investors and if a property is more than about 30 miles from us, it's out of our zone. It usually takes us several months to fix up a property which we'll work on 5 days a week so we want it "close". Deals have been hard to find. We only acquired one house in the last two years and we're looking all the time.

Because prices have not only gone up a lot since 2011 but in many areas there's so much investor activity that properties go under contract almost immediately. One subdivision we own property in was $33k for the first house, $65k for the second house a couple years later and now they're selling over $100k. It's just that the rent prices make these higher price properties more difficult to cash flow. In our home area of Pike County, there's such a shortage of inventory that there haven't been ANY properties in our price range for more than 3 years.

John, why are deals now harder to find there?

1 Reply
Michael Ealy
Developer · Cincinnati, OH · Member since 2018 · 1k+ posts · 3k+ votes
6y
Originally posted by @Trent Chance:
@Arthur P. Check with @Michael Ealy on hotels.

Thanks for the mention Trent.
Hotels are more sub-market specific, down to how close you are to a city's attractions and employers, and how visible/accessible it is from major roads.
0 Reply
Brock Mogensen
Real Estate Syndicator · Milwaukee, WI · Member since 2018 · 1k+ posts · 907 votes
6y
I invest in the Milwaukee, WI market. Cap rates are good compared to other more competitive markets but Milwaukee most likely wont see as great of appreciation as SE states. That being said, it has slightly positive population growth and solid median home price value growth (44%).
1 Reply
Kyle Mitchell
Multifamily Syndicator · Greater Los Angeles Area · Member since 2015 · 399 posts · 261 votes
6y
@Arthur P. We like the Arizona markets right now but I do expect to see a slow down in rent growth as wages are just not keeping up with the rents. Still great markets (Phoenix & Tucson) but definitely time to be patient and not overpay for product (especially older product).
1 Reply
Account Closed
Investor · Cleveland, OH · Member since 2016 · 118 posts · 147 votes
6y
Out of our portfolio I like the mid-west the best right now. In 2020 we are expanding our presence in Cleveland and are scouting Indianapolis and Columbus to start operations. This is based on our search for higher yield, more favorable landlord laws (the 5-10 year view on landlord/tenant relationships is a concern for me), and greater operating efficiency.
Reach out directly if you ever want to chat. I will be in Cleveland Jan 16-18 for a visit as well.
2 Reply
Remington LymanBusiness Member
Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
6y
@Account Closed Columbus is a great area to invest! This article just came out.
"The NAR expects 10 markets to have home price appreciation that outpaces the rest of the country over the next three to five years: Ogden, Utah; Las Vegas; Fort Collins, Colo.; Colorado Springs; Dallas/Fort Worth; Columbus, Ohio; Raleigh/Durham/Chapel Hill, N.C.; Charlotte; Charleston, S.C.; and Tampa/St. Petersburg, Fla."
https://www.washingtonpost.com/business/2020/01/06/experts-predict-what-housing-market-will-bring/

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2 Reply
Zeke Liston
Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
6y
Columbus, OH is a great place to invest! The area is exploding with development, which is bringing steady job growth to the area!
1 Reply
Robin Searle
Real Estate Agent · Colorado Springs, CO · Member since 2017 · 224 posts · 201 votes
6y
Colorado Springs keeps landing on top places to live, top places to retire and top places for millenials as well. I'll add that our wage growth is not keeping up with the annual appreciation which has been running at about 7% with our median home price sitting at $325,000 (as of November). The lower priced homes (anything under $300,000) are still seeing multiple offers and often going above list price. I'm invested here because I believe we will continue to see growth and barring some kind of national economic crises, our local economists don't see any type of a downturn or recession looming. If anyone is looking at doing short term rentals here, be aware the city council just changed the rules so no more STR's in R1 (single family, residential) zoning. You can still do them in a home you live in at least 50% of the year or in multi-family zoning but do need a permit.
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