Looking for a stable rental market

53 Replies

Hey everyone, 

I'm starting to do some research on other rental markets since the prices have gone through the roof here in Florida once again.  (I'm not paying $120k a unit for $850 rent in a Class C neighborhood)  If we have learned anything from '08 is that the sand states (Fl, NV,AZ,CA) are the first to rise and first to fall. 

I'm looking for a stable blue collar rental market with low taxes and landlord favorable laws. I'm seeing a lot of buzz about the rust belt but am not sure what the actual market is like locally or if the boom is temporary, also I'm open to exploring other affordable metros.  I typically like 2-4 units buildings with rents in the 700-950 range and per unit price of $30-50k. Stable workforce, and population stability (no NY, Il, or CA)

Let me know if you have any ideas or have done any research.

Thanks in advance!

Sounds like what your looking for is in your back yard aka Jacksonville, FL.

Huntsville as a whole I believe is on the up and up. Somewhere in the range of 30-40% of the population rents. The economic growth over the next 3-5 years is incredible. Google is constructing a google data plant which will lead to 75-100 high tech jobs, Toyota-Mazda plant which will employ roughly 4,000 (laborers to mid level managers), minor league team moving to Madison (part of the metro), and over 4,000 FBI positions are relocating to Huntsville over the next 10 years. 

https://www.bestplaces.net/housing/city/alabama/huntsville

Thanks Troy, 

Ya, on paper Jacksonville is perfect, maybe I'm too close to it, but the properties that are left on the market are in really bad areas or dumps. A property I owned in 2013 that I paid $45k for and flipped for $65k is now selling for $150k and would only rent for 1200 a month so it just doesn't sit right with me.  I will do some research on Alabama, thanks for the tip!

@Rob Burns @Troy Marschall ,

I think that Huntsville is looking good. I am in DC and looking at Alabama for my buy and hold rentals. Rob, I like your numbers for cost per unit and rents. I am going to put those in my back pocket as I am in the process of buying small multi-families in Alabama.

Thank you both for the information. I have a friend with the FBI here in DC who told me about the new field office but I did not know the other information about Huntsville. This may be the safe bet at 2019 and 2020 approach. I got burned in 2007 and I am seeing the signs that it is coming again. At least here in Maryland.

Darrell

Darrell, thanks for the response, I will check into Huntsville as well. I was in up state NY when 2008 hit and we barley felt it since the market didn't go up much, but when I moved to Florida in 2010 it was a disaster. The higher they go the lower they fall, so Im sticking to off the radar "boring" cities for steady rents, and I agree Im seeing a lot of the same signs from 2007 so we are probably not far off from a correction. 

@Troy Marschall , Thank you so much. I have heard about Mobile as well. Your link to HUD reminds me that I need to look at that more. I thought that it was for owner occupants but BP member recently informed me that there is waiting period for owner occupants and the bids open up for investors. I am now back in the HUD game.

Thank you for the reminder. I have joined the REIA in Owings Mills on Painters Mill Rd. but I have also started my own REIA BP meetup group here in Bowie. It is on Sundays if your are ever in the mood for drive.

Darrell

 with rents in the 700-950 range and per unit price of $30-50k. 

Another way to state this criteria is that you are looking for the highest risk assets that the market offers.

Originally posted by @Russell Brazil :
 with rents in the 700-950 range and per unit price of $30-50k. 

Another way to state this criteria is that you are looking for the highest risk assets that the market offers.

 That's kinda what I was thinking. You don't get that cashflow without potential downside either on the equity or really crappy tenants.  "old school" numbers around here was 1/100 rent to price was a decent but not stellar deal.  That hasn't been seen in a while.

I've found good deals Cleveland. For example, I purchased a 4-Plex for 69K and it nets about $1200/month. No rehab needed.

Originally posted by @Tim Bryant :
@Gabrielle Martin . hi Gabrielle. I live in Michigan and been considering Cleveland. Is there a certain area you can recommend? Thanks

Tim

 Found good deals in 44103 and 44110. Helps to have a good Property Manager.

@Rob Burns So I would look at Memphis or Little Rock. It’s not the rust belt. Little Rock is super landlord friendly. Low property taxes. Stable population and economy. It’s the state capital. I’d take a look at Little Rock and see what you think
Originally posted by @Kyle Schlosser :
@Gabrielle Martin C/D class, I assume? I’m from Cleveland. Did your Property Manager turn you on to the opportunity? Would love to know how you found it. 👍👍

Sure, my property manager actually owned it and sold it to me. Correct it’s a C class property.

Originally posted by @Gabrielle Martin :

I've found good deals Cleveland. For example, I purchased a 4-Plex for 69K and it nets about $1200/month. No rehab needed.

 In the neighborhood where Rent is around $400/mo (to make it net $300), houses were selling for $100.

Even if rehabbed - it's still the hood. 

You can buy a SFR for $69K and cash flow $900/mo but you'll know you can park your car next to it and don't worry to walk down the street.

I wish you luck!