New to bigger pockets and RE investing in general. Located near Columbus, IN. Posted this in the starting out thread but thought I would get some thoughts here.
Columbus Market -- Should I be concerned that Cummins employs almost 20% of the population? I know that one major employer is kind of a red flag, I guess I am wondering what constitutes one major employer.
Thanks in advance for your thoughts!
Another major employer is Toyota Material Handling (folklift truck). You need to research for layoffs etc.
I personally prefer a multi employer city. Indianapolis, Jeffersonville, even Lafayette where there are enough state or university employees who get paid to pay your rent. I suspect the rent you receive is more in bigger towns.
@Sam Shueh Thanks for the response!
@Cody Swainston I have a rental in Columbus and I work in the town as well. You're true about Cummins being the major player, while there are other local employers but as big as Cummins.
Property values went down when Cummins had layoffs a while back. This also results in vacancies if you're renting to Cummins employees. That's the risk you must be willing to take, unless your tenants work for the local schools, hospitals and other service sectors.
@Mihir Bhimaraju Thanks for the reply!
Hey @Cody Swainston welcome to bigger pockets. I have similar situation. I live in Shelbyville, IN and we have one major employer, Knauf Insulation. If you dont mind I would like to piggyback off of your question and add a little more to it. I have read @Sam Shueh and @Mihir Bhimaraju answers and would like to get their( or anyone else) input . In Shelbyville we live about 35 minutes from the southside of Indianapolis, with being so close to a major city do you believe that it can have an effect on a one major employer city?
@Anson Giden You forgot to mention the Casino as an employer in Shelbyville! :) I believe not a lot of employees would commute from Shelby to Indy compared to Franklin or Greenwod on the south side. I'm guessing most of the employment in Shelby is either local or maybe in Franklin. If you're a native there and you have a good idea of the rents, stability of local jobs and you can manage your portfolio, it could be something worth looking into. Indy has multiple employers so even if a company goes out, you won't take a hit right away. If a major employer like Ryobi, Knauf or Casino pull out for whatever reason, think about what would sustain a town like Shelbyville. What do most people do there?
Just found this thread. I grew up within 20 miles of Shelbyville and actually still know people there. There are a fair number of people who commute to Indy from Shelbyville. It's a great middle class town surrounded by farmland - obviously alot of farming in the area. It is big enough to sustain itself, yet keep wonderful small town feel. But there is definitely commuting.
@Ritch Bonisa That's good information. I have been through Shelbyville probably 100 times but just never was quite sure how to feel about the place. Like anywhere, I'm sure there are good parts and not so good parts of town. Seems like its continuing to grow. I might have to look at that market a little harder!
@Cody Swainston Ahoy! I am real estate investor in Columbus, IN and absolutely love it. Just bought a new 4 Unit off of 31 and Washington and can't wait to buy the next one. I would agree that Cummins operating as the main power plant for Columbus's employment could be an issue bit you must take into account their community buy in. Cummins spends money on Columbus's infrastructure to make it a more user friendly town. They rebuilt the bridge downtown and plan to place a bridge over the train on 46 so that its employee's won't have to wait. Not to mention the parking garages and health facility they built for company use. There are indicators to me that Cummins is here to stay.
What we also see in Columbus are incredibly high rent rates. 3/2's can easily bring in $1200-$1400 in good condition and 2/1's can bring in $800-$1000. These rates are caused by the large employment and higher overall income of the town. This makes it a little easier to buy property because you can get away with paying a tad more for them.
I would, however, suggest that right now is a seller's market. Sellers are attaining large surpluses at the moment due to the lack of supply in the town. Might not be the BEST time to buy but if you come across a deal that fits your numbers I would not hesitate. I am trying to figure out how to buy a pair of 4 units now. It all comes down to the numbers.
hope this helps,
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