I've been contemplating a 4 plex in a town near my home. The property itself has great numbers and a low vacancy rate but even though the town has grown 22% in the last 10 years, its still only 3000 people. I'm just a little unsure about that small of a tenant pool. Anyone have any experience with smaller towns?
I'll chime in since and give you my two cents, since nobody has responded yet :)
I wouldn't worry about the tenant pool too much as long as you have your vacancy numbers right. Are you able to get the historical vacancy rate for this property from the current owner? If not, are there any other investors in town that could give you a rough estimate?
The vacancy rate since the current owner bought it in 2003 has been under 3%. I know a vacancy rate is a vacancy rate whether the population is 2,000 or 2,000,000 but it does make me a little uneasy. I guess the reality is that I only need 1/1000 of the population to rent to fill that plex...
@Zach Davis: Did you end up buying the 4-plex? There are a lot of small towns around my location, Fargo, and I was interested on hearing from any small town investors.
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