Attorney · Portland, MI · Member since 2019 · 2 posts · 0 votes
I recently had to move to a small town in Michigan and have found that most groups and discussions, podcasts etc is about working in an urban market.
How do you minimize risk buying in a small town/rural area?
The scary part is that with no major employers close by you wonder whether you’re in the path of future profitability (since the town is quaint and seems to be gaining a “hip” vibe) or if the town is going to stall or wither away when hard times hit.
RE agents want to paint everything rosy, how do you start in this type of situation?
Olathe, KS · Member since 2018 · 148 posts · 207 votes
6y
#1 Check to see if the population is growing or shrinking. If it's shrinking, don't count on any appreciation at all. Also it's definitely riskier if shrinking.
#2 Check to see on Zillow, facebook groups/marketplace, etc to see if apartments are renting quickly. That will give you a good feel for whether vacancy is an issue.
#3 Use the rents found above and then use Zillow's sold history to determine the typical cap rate for the area.
#4 check out the websites for local apartment complexes and see what they charge for rent. You may even call to see if they have openings, can also give you a feel for vacancy.
Kent, OH · Member since 2019 · 71 posts · 48 votes
6y
I would start by talking with several Agents as well as any Property Management companies in the area. These people have their finger on the pulse of the area. After that, go walk around town. Visit the Libraries, Bars and anywhere else gossip may happen!
Olathe, KS · Member since 2018 · 148 posts · 207 votes
6y
#1 Check to see if the population is growing or shrinking. If it's shrinking, don't count on any appreciation at all. Also it's definitely riskier if shrinking.
#2 Check to see on Zillow, facebook groups/marketplace, etc to see if apartments are renting quickly. That will give you a good feel for whether vacancy is an issue.
#3 Use the rents found above and then use Zillow's sold history to determine the typical cap rate for the area.
#4 check out the websites for local apartment complexes and see what they charge for rent. You may even call to see if they have openings, can also give you a feel for vacancy.
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
6y
@Anthony Raymond Cisneros I invest in 3 small towns. Check the availability of rentals on Zillow and google. Check rents on rentometer. City Data, or similar is a good guide for crime, demographics and income etc. I walk the areas (with my dog). To mitigate risk I look for a higher margin-more rent to purchase; so I get more cash flow.