Where to buy next property?

Question

Hi 👋, My family and I live in the Bay Area of California. We own a rental property in Colorado Springs that we purchased back in 2019 and are looking to purchase another before the end of this year. Colorado Springs has been great since it's close to military bases and we've been able to find great tenants and make solid returns. We're researching quite a few different markets outside of CA, especially in Ohio, but was interested in hearing where others are focusing right now?

Steven Foster Wilson · Answer

Ps. Not to mention Ohio is a landlord-friendly state.

Mike D'Arrigo · Answer

@Josh Heenan If you're objective is long term buy and hold which I'm presuming it is, I always recommend markets with strong economic and demographic trends. In addition to good cash flow, look for markets with growing populations, jobs incomes and modern/diverse economies. These markets are more likely to have good appreciation potential and opportunities for rental increases. With today's higher interest rates, it's important to maximize all sources of returns. Personally, I like the Midwest, particularly Kansas City, Indianapolis, Quad Cities and select areas of Cleveland. We're active in all of those markets. Feel free to reach out if you'd like insight on any of these markets.

Fabiola Munarriz · Answer

Hey Josh,

I think Columbus OH is a great place to start. I've had a lot of investors from Cali gravitate towards Cbus this year. Our market is consistently growing and appreciating it's a great place to look to start some buy and holds. With the jobs coming within the next few years this is something I've seen a lot of people searching for at the moment here. Areas to look out for here in Columbus are olde town east, franklin park, Franklinton, lincoln village, southern orchards, driving park, hilltop, North linden.

Andre Crabb · Answer

Josh, hello from an ex-Bay-Arean (haha not sure that's a word 😅)...

There's definitely something to be said about investing where you know, and if that's Colorado Springs, then great. Once you have a few other cities in your list I'd be happy to help you compare them. One trend I've seen is that, given the market cycle we're in, small towns / small cities are worth considering as bigger cities seem to fluctuate more with market downturns.

Joshua Janus · Answer

Columbus, Ohio is a great market to invest in. The population has been growing here year over year over the last decade, it is home to The Ohio State University which has over 50,000 students that live here along with those that visit, and it also holds a diverse range of young professionals and traveling nurses to fill the demand of the multiple business corporations and hospitals stationed here. The appreciation rate in Columbus has been 8% higher than the national average over the last year. Tech companies are continuously moving here and establishing a footprint in Columbus as well. Intel is a great example, who is building the largest chip manufacturing plant in the US right here, and it will be a $20 billion dollar investment that brings a few new thousand jobs.

https://www.dispatch.com/story/business/2022/01/21/intel-ohio-building-computer-chip-factories-licking-county-jersey-township/9173472002/

Another example of economic growth is the upcoming Ohio State University Wexner Medical Center Inpatient Hospital which is a 1.9million square foot hospital that will bring over 800 new beds and a thousand new jobs.

https://abc6onyourside.com/news/local/new-osu-hospital-expected-to-transform-health-care

Here are a few more recent investments

https://www.10tv.com/article/money/business/hydrogen-power-company-hyperion-bringing-700-jobs-to-columbus/530-25907aab-5517-4661-a9f3-d2ed2d5be6b0

https://news.wosu.org/news/2022-02-08/rumpke-to-build-50-million-recycling-facility-in-columbus

Check out The Complete Guide to the Columbus, Ohio Real Estate Market which goes through the Columbus, Ohio market in depth and will give you a better scope of where the highest levels of growth are taking place and where to look to invest.

Colton Hahn · Answer

Hey Josh,

Congrats on doing so well for yourself!

We do multifamily syndications in the midwest, we have been looking at the Des Moines IA, and Ft Wayne IN markets pretty heavily and have multiple properties there. Great value to be had and even greater returns :)

Josh Heenan · Answer

Thanks for all the info! Columbus looks great, but might be a bit above my budget. Was also looking into Dayton.

Bill B. · Answer

Do you plan to flee California for a tax free state someday before/after retirement? Today would be the day to buy your future retirement/primary home where the tax savings alone could pay for it.

Texas, Florida, Nevada for sure. Tennessee, Wyoming, Washington or South Dakota if you’re looking for something different.

I skipped Florida because of the humidity, hurricanes and skyrocketing insurance. Texas was property taxes and weather. South Dakota and Wyoming wee too sparse for me. I don’t know why I didn’t consider Washington. Tennessee wasn’t tax free yet when I chose or it might have gotten me.

I chose no income tax, cheap insurance, low maintenance, cheap flights in and out, no weather issues, market where 20 years old is considered an old property. It’s basically Arizona without the state income taxes. But I do like your choice of Colorado Springs. It’s a beautiful area. Unfortunately I think, like Las Vegas, it’s destined to become “little California”.

GL wherever you choose.

Denton Lewis · Answer

I would recommend looking into Texas! Buyers are flocking to affordability, increasing home prices, and sustaining a competitive market. As far as I've seen, this growth should continue in 2022. Texas will continue to be a good investment into the future as well. I know Frisco and McKinney are one of the fastest growing cities (just north of Dallas) in the last 10 years. A lot of this is a direct result of businesses in nearby Dallas/Fort Worth bringing commuters from these smaller outer cities. Because of this, we are seeing renting rates increase ~19% YoY in the surrounding cities. I would also recommend looking into New Braunfels down in the San Antonio area and Cedar Park & Round Rock near Austin. They are seeing similar markets to Frisco and McKinney where they have had massive explosions of growth over the last 5-10 years.

Jeff McKee · Answer

Are you interested in discussing passively investing in future opportunities?

Our group, Think Multifamily, finds amazing deals from TX to FL.

Where to buy next property?

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