That’s not the first question you want to ask. You want to ask yourself what you want to accomplish with real estate investing.
For example, do you want to establish cash flow, long term appreciation, retirement income, or what?
Each of these investment goals requires that you focus on a different niche of real estate. And different niches exist in different locations.
That said, you generally want to stay away from areas with high vacancies. These areas nearly by default offer fewer employment opportunities; have higher crime rates; and otherwise, make management more expensive and intensive.
HOWEVER, bargains can be had ANYWHERE, and in ANY MARKET, if you’re willing to spend the time and energy familiarizing yourself (as in becoming an expert) in a given market, and are able/willing to act fast.
The most time-consuming effort in real estate is finding the deal. The rest falls from there.
Meantime, again, first settle on what you want to accomplish, and then focus on the market that will make it happen.
Here’s some hints that will give you some direction based on your goals. This is not exhaustive, and there a ton of exceptions, but is generally applicable.
The assumption to any of these options is that you are buying real estate that is either under-performing, and/or needs improved management, maintenance, and/or marketing. If the property is ‘pretty,’ likely you’re gonna be waiting a while to make any money, if any. Just saying.
Cash-flow: Bread-and-Butter Multifamily Units (Working Class) (30-unit minimum, if you want to avoid donating your own time to management and maintenance. (Leverage: If you can raise the rent $40 per unit on say, 30 units, that represents a $14,000 increase in your annual income! And goes directly to your bottom line.)
Long-term Appreciation: Bread-and-butter, single-family houses (Quite forgiving if you make a mistake here, since the price you pay becomes more irrelevant over time. It’s about your ability to service the loan until the property begins to cash-flow. Some say, ‘you make your profit when you buy, not when you sell.’ I say, ‘you want to make a profit on both ends.’
Short-term/forced Appreciation: Rehabbing, any price range (Buying the worst houses in decent neighborhoods)
Wholesaling: Flipping the worst houses in the worst neighborhoods to rehabbers.
*** You’ll find a lot less competition for deals in outlaying areas of town. Getting off the beaten path can deliver great opportunities.
That’s all I got for now.
So, what are you wanting to accomplish by investing in real estate?