Let’s face it. It is tough living in a big city. It is no secret that life in a big city is seriously expensive, and with ever-climbing costs, the situation just keeps getting harder. To top it all off, there’s the the skyrocketing costs of real estate! It’s just not easy to find an ideal spot worth investing in. Soaring prices, bad neighborhoods, and an overcrowded market are all big reasons so many would-be investors simply don’t ever get to it.
Everyone knows what happens when demand is high. Prices rise. So, do you still want to follow the crowd and call a tiny patch of land with a tiny set of rooms your own? If so, then you’re in luck because investing in the West coast and East coast will give you just that. Investing there could be one of the stupidest things you could be doing right now.
Now, you might be thinking why on Earth is investing on the West and East Coast such a bad idea? Well, that’s because huge hedge funds have raised billions of dollars and bought tons of available properties in the market. And the first ones they bought were the best deals. There are absolutely no deals left, and the few available are usually not even worth the sweat. Right now, you would be paying top dollar and getting a crappy ROI to boot. But hey, you tell me. How does a $300,000-$500,000 single family home that rents for between $1,200-$1,500 per month sound? Does that seem like a good deal to you? Let me answer that for you: not at all! These are ridiculous and lousy investments in my opinion. I would rather stay in bed sleeping than wreck my balance sheet buying properties like this.
Why All Investors Should Consider the Midwest
Now, if you are one of those people who refuse to be a follower and just do what everyone else does, I might have some awesome news for you. Think Midwest. Yes, you heard me. The Midwest is where all the real estate action is. Wake up and smell the roses. It sounds almost ridiculous to most city dwellers knowing how far can their money go in the Midwestern areas. Here, you would end up spending almost one fifth of what you’d be shelling out on real estate in any area on the East or West Coast.
Yes, life in the Midwestern region is different. Yes, it’s less crowded there and a lot quieter, but isn’t it better to have more space, more conveniences, and a stunning piece of real estate at knock-out prices? Well, many people with families would argue that it is indeed better to live there than anywhere else. With top-rated schools, the possibility for a high-end lifestyle, and effortless connectivity all finding their way to these locations, there isn’t much to complain about.
Not only this, the Midwestern region is known for its scenic natural vistas, something that’s virtually non-existent in the big cities, thanks to rapid urbanization. Most Midwestern areas offer an incredible lifestyle at extremely lucrative prices. So what is the catch, you ask? Well, there isn’t any catch. The cost of living here is much more reasonable than most big cities. This means people get to save way more than they could ever manage in the big city! Comparatively an under-explored market, the Midwest has potential beyond compare!
Why should you care as an investor? Because these families are you future rentals. It’s why you’ll know you have something valuable to offer and why there’s such a clear demand for rental properties in the Midwest.
5 Reasons to Consider Midwest Investments
But there’s more. When was the last time you felt like a kid in a candy store? With deals so sweet you will feel like a kid again, the Midwest is sure to bring back some great feelings. Why? With properties available between $50,000-$70,000, you won’t believe your luck once you start browsing the available properties. In addition, many of these $50,000-$70,000 properties give you a rent of $700-$1,000 per month. Now, I don’t know how good your math is, but this gives you a ridiculously high ROI. Many of these houses could be found in solid B areas! You can think of it as hidden gold mines waiting to be explored. In many parts of the Midwest, a mere $1 million will buy you a stunning mansion with acres of open space surrounding it. You might even get a lake facing property or a property with a huge pool and a car collector’s garage!
Let’s face it — life is too short to be spending your time in cramped spaces. Many people feel that way, and that’s why the Midwest is such a success for families. Of course, living in a place that doesn’t resemble a chicken coop is a big plus as well.
Take advantage of the low cost of living and low priced properties. Invest in properties that do not burn a hole in your pocket and give you a perfect ROI along with it. And there ain’t any place like the Midwest to do that! Here are 5 things that we absolutely love about the Midwest:
- It is so well contained and life is so much simpler. Its unspoiled solitude is something that is both captivating and oh-so invigorating. That means happy tenants. There’s no big city pressure in the Midwest; everything is just nice.
- Low cost living! An affordable lifestyle with all possible luxuries to go with it is never a distant dream here. That means more cash for rent and also explains, in part, why rent is so relatively high here. It also means that any maintenance you have to get done could be cheaper as well. Don’t forget, especially if you’re living on the East or West coast, your hard earned cash simply has more milage here.
- While big cities might be known for neon lights and crazy traffic, the Midwest is known for its serene outdoors and calming silence. Compared to the busy city life, the Midwest is like an oasis. Sure, not all places are as great as the next one, but there sure are some really beautiful locations. It’s also perfect for the average family. Great family trips assured.
- The Midwest might not be the center of a bustling universe, but there’s still a lot of activity here — economically speaking, that is. There are few financial headquarters, but many factories and overall a less corporate environment. That means loads of decent blue-collar workers and loads of jobs and job stability.
- There’s a notable lack of pretension. Why is this important? Well, in terms of maintenance and amenities you need to provide for a mid-class home, this makes a huge difference. People’s expectations are usually a bit lower, and that means easier tenants. Of course, this difference isn’t terribly huge, but it is still noticeable to an investor.
Now, for those who know me, you know that when I speak about good investment opportunities, I never talk about the appreciation of a property. Right now, the East and West coast have some decently appreciating real estate. The thing with appreciation, however, is the fact that it’s basically anyone’s guess as to where it’s going. Many people buy an expensive property and hope that it increases in value in a record amount of time. You might call it investing, but I call it gambling. You know, all I care about is a good cash flow from your properties. If you think about it, that’s all that matters. And it’s exactly what the Midwest has to offer. Don’t ask me about where the properties are going in term of value because I simply don’t care.
Add to all that extensive homeownership, thanks to some of the lowest average home prices in the country, simple lifestyle and low cost living, and you’ve got the perfect mix for investing in properties. After all, homeowners take care of their homes and make living in their neighborhoods as nice as they can.
Check it Out for Yourself
Of course, I understand that if you’re currently living somewhere else, it’s hard to imagine what it’s like. It’s why I always recommend that people go check it out for themselves. It’s one of the main concerns that I talk about. Know where you’re investing. That’s why you should really think about traveling to the Midwest and check out some properties in areas that appeal to you. It doesn’t matter that you won’t be living there — it’s just always nice to know that you understand what living in a certain place is like.
Above all, though, considering a purchase price of $60,000 for a single family home and a rental income of $800 each month, you’d be hard-pressed to find a deal with a similar return anywhere else — especially if you take into account that one $600,000 East or West coast buys you 10 of these. I personally own 20 properties in my portfolio and am looking to buy another 30 by the end of the year.
How’s that for a passive income?
Where do you invest — and why?
Let me know your thoughts on the best real estate markets!