Choosing a market

[William Breymann]

Hey all, looking for thoughts as I hone in on a market. I had basically settled on Ohio and was between Columbus and Cleveland, but also looking at Dayton. I had connected with a couple RE agents through bigger pockets and they were sending me deals which looked great compared to my home market in Western MA. After I started digging into crime stats and school ratings and looking at street views they didn't look so great though.

We were just in Saratoga, NY and walked a beautiful house that we were talking about partnering on with a family member. It turned out they aren't serious and I'm not ready to take on the risk and work required to manage a hybrid STR/MTR that I believe it would take to make it viable, and also don't want to put the majority of our HELOC into one property. Anyway, I've started looking at spots that actually get me excited. For me this isn't large cities and bars and nightlife but lakes, mountains and beaches and outdoor destinations. Around me in the Northeast, I've been looking in Warwick, RI, Burke, VT, and upstate NY, particularly Saratoga and Lake George areas. All small markets and expensive. Not cash flowing with my financing unless you STR or MTR.

I'm currently considering targeting more affordable metro areas but looking at areas close to parks or natural attractions but also hosptials to open up the option for STR but more so MTR to traveling healthcare folks. I work in healthcare and have met and know many travelers. Currently looking at areas outside of Raleigh, NC (have a family member close) and have moved back to Cleveland as it has Lake Erie which I like.

Anyway, long story just to ask your thoughts on whether I'm thinking too much about the locations and whether I like them vs if they make financial sense. Have had people tell me I won't be spending time there and it doesn't matter which I know is true. On the other hand having a place that we could potentially visit if there were vacancies or could make into a vacation while checking in on it makes sense too. Appreciate any thoughts and curious how you settled on your market, especially if it was out of state?

[Matt Dingus]

Hey @William Breymann

You’re definitely asking the right questions here. A lot of us wrestle with the balance of “do I like this place” vs. “does it actually make sense financially.” At the end of the day, the numbers need to work first as an investment (cash flow, appreciation potential, stability, safety, etc), but I’ve also found that being at least somewhat excited about the market helps you stay motivated, especially if you’re investing out of state. You mentioned Ohio, NC, and some spots in the Northeast — all have pros and cons I'm sure — but I’d also encourage you to take a look at Pittsburgh (Yes I am biased). It’s one of the few markets where you can still find solid cash flow opportunities while also getting long-term appreciation. The job market is strong with healthcare, tech, and universities (great for your idea around MTRs for traveling healthcare workers if you go that route), and there are plenty of safe B-class neighborhoods with good schools, parks, and a lot of growth happening.  

Like any city there are areas you’d avoid, but if you target the right pockets, it’s a really investor-friendly place with steady demand from both renters and buyers. I’ve personally had a lot of success here helping clients and building my own portfolio, and I can honestly say Pittsburgh has been one of the most balanced markets I’ve seen for both cash flow and appreciation. And when I have clients visit here, they end up loving it every time. While Pittsburgh isn’t a “beach” destination, it’s surrounded by lakes, rivers, ski areas, and outdoorsy recreation, so it does check that box of having natural attractions nearby.

 Long story short — don’t overthink needing to personally love the nightlife or vibe of a city, but if you can find a market that has strong numbers and you would enjoy visiting, you’ll feel way better about pulling the trigger on the first offers.