I made my first foray into small town real estate back in 2005. Having been used to large suburban markets, I soon discovered that this was a different animal. Many large markets had run amok with rampant speculation that was driving real estate prices into the stratosphere and I wanted no part of the risk associated with investments in those areas. Through networking connections I had learned of a Nevada mining town that was experiencing an economic revival and, as a result, had a severe housing shortage. Despite the demand, prices had not climbed much but rents were high. An investor’s paradise, or so it seemed.
The Perfect Storm
The town of Ely, Nevada had gone through years of economic decline when a mine, its primary industry, had shut down. People left the area in search of work and houses were abandoned because there were no buyers. Many of those who remained did not have the money to maintain their houses and they fell into a state of disrepair. The future looked bleak for the area.
Fortune eventually shined on the area when the mine was bought by a much larger operation and re-opened. Other industry came to the area in the form of a state prison and, not one but two, proposed power plants. Suddenly workers were in demand but there was very little available housing. I was one of the first rehabbers to enter the area and others soon followed. Opportunity was everywhere.
Learning To Adapt
On the surface you would think that people would be happy to see investment in their town. However, it soon became apparent that outsiders were resented. The townspeople were looking to protect their way of life and didn’t like the intrusion of the city slickers. In many ways I could understand how they felt.
Many investors had come to the area and attempted to use their big city tactics and quickly found that they didn’t work. The pace is slower and there wasn’t much competition between contractors since there were so few of them. To be successful in this area you had to learn how to fit in. Those who were able to adapt thrived, those who couldn’t soon left the area. The small town way of life isn’t for everyone.
A Different Atmosphere
It took a little getting used to but I came to love the area. The way of life is much more relaxed, the air is cleaner and the people have turned out to be terrific. The area has seen tremendous changes in the three years that I have known it, yet in many ways it is the same as it must have been fifty years ago. [See an article that I had published in The Ely Times ]
Experience is the one thing you can’t get for nothing. – Oscar Wilde