Investing in an area that majority of the population own vs rent?

3 Replies

Hi guys,

I have been looking in areas where they fit the criteria of low crime, great school district, and nightlife...this is for a single-family home buying strategy, but I find that some areas near me that fit these criteria of top schools, places to live, etc. but have a low percentage of the population that rents vs actually own. A strategy I'm exploring is buying a SFH in a great area, live in it for a year (ideally rent out rooms while in it), and then rent it out to a family after I move out. Part of me thinks that owning a SFH in this area makes it so I have a product that has less supply and being in such a great area the demand won't be an issue. My concerns are one, using the house-hack strategy for the time I will be living in it, and two, also renting it after I plan to move out in areas that say 80% or more of the population owns vs rents. Do you have any experience with this SFH strategy and/or advice that I should consider when looking? When looking at the SFH strategy, would you suggest looking in good areas that are more towards young professionals or those with great school districts that attract families? Any response is much appreciated.

@Alan McDonald I wouldn't worry too much about the composition of owners vs renters in a given neighborhood. If the house works for your criteria, then it works. And if it's desirable for you, it's likely to be desirable for someone else. Good schools can just as easily be a perk for long-term tenants, if that's what you're looking for. I did what you are looking to do (minus the househack) and turned my first home into a rental property after moving into another, earlier this year.

@Tom Harkins good point about desirability, I didn’t think of it that way. Thank you for the insight and I’m curious, did you buy a house in the same town after you moved out? I’m guessing it’s at least near proximity to your now rental. Im thinking if I buy a house that needs work and just live in it while I fix it up and just move out after a year and get a tenant in there, then do it again.. the house hack was an added detail for me to get some landlording skills and extra cash flow during my time in it but could bring up more challenges than benefits. Did the house you first bought need work or was it updated already when you bought it?

Same town yes, a few miles apart. It needed some work which we did over time (lived there for about 5 years). We renovated the bathrooms and painted before moving out as well. I decided to self-manage for now to learn how to screen/select/manage tenants while having a vested interest in the outcome. I figure that understanding what a PM does should help me hire an effective one when the time comes- the goal being to buy more houses and become more passive with time.

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