I am starting in RE, but been reading for a couple of months about investing in houses.
The question is " Where is the best place to buy single family homes and rent them out"
I heard once Robert Kiyosaki said that he didn’t like to invest in California because of the laws where not so favorable for the landlord. Is it true ? can someone give me some advice ?
California is a very big state. Some of the big cities are very liberal and have populations big enough to make the whole state vote liberal. However, there are a lot of towns in California that aren’t liberal at all, they are simply out-voted.
San Francisco and Los Angeles proper have rent control that would be difficult to work with. (and maybe Berkeley). Other than that, just know the landlord tenant laws and follow them and landlording in California shouldn’t be all that difficult.
The big problem with landlording in California is that rents don’t generally keep up with purchase prices, so it is difficult to get a property that will pay its own way.
I consider landlord law in Oregon to be fairly nuetral. It doesn’t favor the landlord, it doesn’t favor the tenant. Neither is allowed to ride roughshod over the other. Both are expected to behave in a reasonible fashion. However, same problem as California. It’s very difficult to purchase a property that will cash flow.
I think everywhere is going to have its pros and cons. Theres some guys on here that live and invest in TX and LOVE it down there. I live in WI and although our state govt is not very business friendly, I love living here (I say that in the middle of a blizzard mind you) and the RE market is dynamic and profitable for landlords/investors.
Get to know your local market and you’ll find both good and bad things about it. Avoid the bad and maximize the good.
Thanks very much for the advices, I’ll take them in consideration and will do my research.
:biggrin
If your strategy is to rent and hold, then you want cash flow. I have done a ton of research on where to invest and find many large cities are overhyped, have ton of competition, LTVs and cash flow numbers are terrible.
I recommend targeting a less hyped city where you can cherry pick from deals with tremendous equity and tremendous cash flow. Then duplicate over and over. There are many areas that will work, but I recommend focusing on one strategy becoming a master in that strategy and area.
I myself have found I can cherry pick from deals in the MidWest around 60% LTV or less with rent/purchase ratios of 2-3%. So basically, if you invest 200K your rents will be 4-6K per month. I live in San Diego and find it hard to find $1500 rent on 200K in investment. I strongly recommend finding areas with high rent/purchase ratios.
I hope this is helpful, let me know if you have any further questions.
I second moeller on this. The midwest is a very good area. Find a niche that works for you and have a blast!
In the Sacramento area prices have dropped so much that it is now possible to cashflow.