I’m planning to purchase my first out of state property. Would love to hear everyone’s opinion.
Here are the states I’ll be looking into this year:
Colorado - heard that CO booms when CA is busting
Utah - strong economy, lots of migration from CA (especially the Bay area)
Idaho - honestly I don’t know why ID, but there’s sure a lot of buzz about it, at least here in California.
On the bubble for me are:
Texas
S. Carolina
Arkansas
Mostly because of proximity and I’m never out that way.
What type of property are you planning to invest in? Single family, multi family, retail, etc.?
Single Family Homes
Texas. I’m in Houston right now on vacation and will head back to Austin in a few hours. If you want cashflow, but little appreciation, you’d choose Houston or San Antonio. If you want appreciation, Austin or Dallas is good.
I’m specifically in Magnolia, TX, which is growing. It’s outside of the Woodlands, which is a popular area. I talked to a builder today and really like the area since homes are affordable. I’m not sure what rents are, but am researching. I’ll probably split my time between Houston and Austin.
Smaller towns that weren’t so effected by the ballooned appreciation over the last few years are good choices for cash flow.
Since I mainly invest in SFRs i Texas, I would agree with the two previous posts. Smaller markets less affected by huge appreciations provide stable rental income in many cases. In Austin, the market is hot and good for flipping (if you can find a good deal). Other Texas markets have plentiful long term rental income opportunities in the 70K to 120k range renting for @1% of total value per month.
Okay, I’ve got a question and would like everyones opinion who has one on the subject.
In the stock market(which I am terrified of and will probably never invest in) they say buy low sell high. In the past I’ve always used this theory in real estate.
The problem, I live in Michigan in betweene Flint and Detroit.
Two of the three worst crime areas in the country. The layoffs and forclosures are EVERYWHERE. We invest in the safer lower income areas.
We bought a property at auction(3 unit demo) for $8,000. put 20,000 into it and after costs are making pos. cash flow of 800.00 per month and it is now worth about 100,000.
Great
We bought another property at auction (sfh) for 4,800. It was across the state and I kinda of freaked out a little because the city wanted us to pull permits right away and I had planned to wait until spring. It was valued at 19,900-21,900. We wanted to unload it quick because of the permit thing so we sold it for $6,000. We lost about $1,500. after commisions and closing costs.
I never lost $ before so that has me gun shy however I know it is a relatively cheap lesson.
So the question is…
Do you buy in Michigan where you can buy a good rental for $15,000-$30,000. in a good rental area or do you avoid Michigan like the plague?
I would think that the market will eventually soar up again as it has more potential for the price then an already booming market, say Texas, Arizona, Calif.
I realize Michigan is more of a risk but isn’t there more room for outstanding profit?
I would think it all hinges on our (Michigans) economy which has been dependant on Ford, Gm, etc.
I believe that A.) Sooner or later we will start producing more hybrid cars and B.) As a matter of survival we will eventually diversify our markets altogether.
I think it will happen it just a matter of when.
So the question again is do you invest in a state with a bad economy knowing (hoping) that what goes down will go back up…Or do you invest in an already booming economy?
Any opinions are welcome…
Oh the rentals here seem to do pretty well. In 29 units I typically have 2 vacanicies, so thats about a 10% vacancy rate.
Wendy
I think you need to stick to what works for you. While I would never personally invest in MI, I don’t live there and I don’t understand the market dynamics. Likewise, I invest in two relative small niche markets in Ca and Va. because I have a lot of personally knowledge of those areas from living there. IMHO, understanding you markets means you KNOW what is a good deal and I think no one will argue that buying at the right price (be it $4k or $400k) is a key to making money in REI.
In the long run, the MI based auto industry will continue however, there is certainly to be some continuing economic pain, but with that said there will be someone there making money in REI.
While you might hear abotu people making lots of money in TX, FL, or wherever, maybe it becuase those areas work for them and their strategy/financial situation, etc, but it might not be necessarily right for you.
That’s my two cents.
dont give up on michigan as long as your cash flow is there you will do find, right now is the best time to invest in michigan the prices is so low just make sure you dont pay to much for a house, good luck and kept buying LOW!
thanks,
I hope your right. In stock they say buy low and sell high. There has eventually got to be at least a little “higher” because I do believe prices can’t get much lower.
We happen to live in a great community, safe, upper middle class, great schools however because of the states economy I have seen houses sit on the market for over a year!
Yes it’s a good time to buy at a discount but it also strikes a little fear.
If everyone keeps moving out of state, and they seem to be, who will we rent to???
We are proceeding but with caution!
I think the key is to make sure we have bigger back up baskets!
I am in the process of paying off all credit cards and stashing some $.
Wendy
Huntsville AL is in my top 5 places for 2007.