Sunday, September 7, 2014
There's a new sheriff in town...
The key is to find good sized towns (say, ones with a Wal-Mart!) within commuting distance (say one hour) of the city you are closest to. Look for depressed home values. Not all towns are created the same! Some are bedroom type communities where property values are close to city levels. Why buy there when you could just buy in the city and reap the higher rents?
What you are looking for are towns that have depressed values for local reasons, ie the local manufacturing plant shut down. If you buy the types of units we recommend (inexpensive) this probably won't effect vacancy very much. In fact, your vacancy will probably be lower! Generally, people will stay in their town if they can, and will commute to a job in the city. Also, city people will move out to the town for better quality of life and cheaper rents.
There can be some disadvantages though. You will be considered an "out of town owner", and in the minds of some of the locals a "slum lord". You can generally avoid this by keeping your properties maintained and looking good. Also, there is a definite "old boys network" which you have to deal with, and you are considered an outsider to some. If you can find a good local real estate agent, this problem will be lessened. They are your local representatives, and can help you out with local issues, trades, etc. A good local agent is gold, treat them well!