I have been looking around my area and there is one market in specific that sparks this question for me. The city's name is Conneaut and it is located in the the northeastern corner of Ohio right by the PA border. It used to be a booming town because it is located right on Lake Erie and the harbor used to be a lot more active than it currently is. Prices in this town could be described as "Detroit Like" (without the crime rate). Getting a 2000+ sq. ft. house in decent shape for around 30k is tempting as a new investor. I need to know what type of things I should be looking at in the city as a whole to get a good idea of whether or not it will be a good long term investment such as buy and hold. Any help is good help! Thanks guys!
I learned quickly that you can read all you want about a city and ask a bunch of questions...but there comes a point where you need to make a trip out there and start driving around. If i did this beforehand, i could of saved a lot of time and effort trying to figure out something from a distance.
So my advice is to go explore!
I think all things are relative for the most part. The larger the city, the more opportunities you have, but you also have other issues in those cities. The better neighborhoods are often much more expensive in bigger cities than their small city counterpart. When you look at less pricey properties in major cities, many times you will have to compromise safety to get the great deals.
Small towns like Conneaut, Edinboro, Greenville, and Meadville still have the different neighborhoods but the price variation is a bit tighter. In those cities, the doctors and lawyers may live in houses that are quite nice and cost $150 to $300k while the non-workers and minimum wage earners may live in houses ranging from $12 to $25k. You can find a decent "blue collar" neighborhood sporting houses in the mid 30's to 70's.
Prices tend to coincide with the average wages earned in the location. It's basically economics 101. People who work for $12 to $15 an hour (the majority in those small towns) will be able to afford such houses. In the larger cities that have strong economies, people may be paying a couple hundred thousand for a middle class neighborhood home, but they also will be making comparable income to pay for it.
Whether you should invest in any given city should depend on the economic outlook of the city. Things in Conneaut used to be much more bullish when Conneaut Lake Park was alive and well. This isn't to say that it would not necessarily be a decent investment if you have a compelling reason to believe it would. Erie has really been picking up in the past 10 years thanks to Nick Scott going after it. I would consider Fairview, Girard, Meadville, Edinboro, Waterford, etc. to depend highly on Erie for their economies since the majority of the people who live in those towns work there. See if Conneaut is similar or not.
If the city is on a consistent down trend economically (businesses moving out/closing) and it is not becoming strong as a bedroom community for a larger city, I would avoid it. If it seems stable economically (new businesses moving in) I would go for it. The lower prices might make it easier for a beginner to get into the race.
Depends on if your flipping homes or buying for Cash Flow. I flip so my advice if your flipping homes in this area is to always purchase homes 50% less than what the "average" homes retails for in the area…Hope this Helps
To find out about an area go to IREM.org search for ARM certified property managers. Call 5 ask them what sides of the city they like/dislike and why. Ask what they see them selling for and what expenses are by category. Ask for market occupancy and rents. Ask if they know anything coming up for sale.
You can also search narpm.org for the RMP (Residential Management Professional) and MPM (Master Property Manager) certified.
Thank you everyone for your input. It has really helped me put things into perspective. I will be doing individual responses when I get a chance.
Just moved to Conneaut and was curious to see what results you had in this area. I am looking into flipping around here but was also looking into the Fairview area as I feel the market may be better. Any help would be appreciated.
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