The Money Mustache Community
Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: MountainMan on April 16, 2013, 10:34:56 AM
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I'm looking for a new city to move to that, among other things, has good real estate potential.
Cities on my list so far are:
Las Vegas
Denver
Minneapolis
My question is: What is the best way to determine which city has the best real estate potential?
That's obviously a broad question as it depends on what type of real estate I want to get into as a landlord.
I'm thinking single family residences, and potentially condos to rent to the tourist market (or as monthly rentals).
It seems to be that Las Vegas presents the best deal of all, but am I missing anything about Minneapolis or Denver?
Thanks for your thoughts.
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I can’t answer your general question but can speak to the market in Minneapolis. I’ve purchased several rental properties over the past 3-4 years in the Minneapolis area. Over the past few years I’ve been able to find really good deals at least every month or two. I have been looking hard and have not found anything since November of last year and typically I’ve found the best deals December - March. I am only concentrating on certain area of Minneapolis and western suburbs so it’s possible there are deals out there that I have not found.
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None of the above.
I would be looking at Texas personally.
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Lots of competition in Vegas.
What about Nashville? Bakersfield has some real cheap places as well
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In regards to doing your homework for Las Vegas (and Denver), I'll just point out the following website: redfin (http://www.redfin.com)
With regards to using your smarts to buy solid rentals - I can't help there.
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http://www.neighborhoodscout.com/co/denver/evans-colorado/#rates
http://www.neighborhoodscout.com/nv/las-vegas/desert-foothills-dr/#rates
http://www.neighborhoodscout.com/mn/minneapolis/north-central-u/#rates
Of your choices I think Denver may be the way to go. Vegas is probably good for short term appreciation and low taxes and low maintenance. Texas? Seems like the property taxes negate any appreciation. Why not San Francisco or Honolulu for long term? Great appreciation and rent growth.
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While honobob may like that site, most people don't take it seriously, and I would never advise anyone to use it.
The way it calculates appreciation rates, for example, is flat out wrong.
YMMV.
(Though obviously you can draw your own conclusions on someone advising you to invest in real estate right now in Hawaii or San Francisco.)
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Not to get off topic, but I don't recommend purchasing in Honolulu - and I own several properties here.
Demand is insane and prices are soaring. For example, a house about 1/4 mile from mine went on the market for $900k. By the end of the first open house, there were 16 offers. 6 Cash. It ended up selling for ~$1.2M. Cash.
Must be a beachfront mansion, right? Nope. 1500 square feet, 3 or 4 bedroom, 2 bath. Average or below average condition. Good neighborhood close to the beach.
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The author of The Millionaire Next Door, Dr. Thomas Stanley, agrees with Arebelspy. He says Texas is the place to be for growing real estate.
http://www.thomasjstanley.com/blog-articles/470/The_Millionaire_Next_Door_Swims_with_the_Economic_Tide.html (http://www.thomasjstanley.com/blog-articles/470/The_Millionaire_Next_Door_Swims_with_the_Economic_Tide.html)
He recommends that high school grads or college students go to school in Texas, learn about real estate, and invest in new opportunities.
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While honobob may like that site, most people don't take it seriously, and I would never advise anyone to use it.
The way it calculates appreciation rates, for example, is flat out wrong.
YMMV.
(Though obviously you can draw your own conclusions on someone advising you to invest in real estate right now in Hawaii or San Francisco.)
Everybody I know thinks the site is very useful. Do you have a list or some support for your statement?
It reports the mean appreciation rate. There is NOTHING wrong about that. Again, can you support your statement?
What conclusion are you coming to about real estate investing in SF and Honolulu? Please share, I have decades of successful experience in both areas and would love to compare your experiences in these areas to mine.
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Not to get off topic, but I don't recommend purchasing in Honolulu - and I own several properties here.
Demand is insane and prices are soaring. For example, a house about 1/4 mile from mine went on the market for $900k. By the end of the first open house, there were 16 offers. 6 Cash. It ended up selling for ~$1.2M. Cash.
Insane demand...soaring prices!!! This makes Honolulu a bad place to invest because..............? Seriously, I wouldn't be throwing money at a property just because everyone else is but long term Honolulu is a great place to invest in residential property. So are you calling this the market TOP and selling off your properties? I think this is just the start and I'm not the only one thinking that prices will double again in the next couple of years just like it has every decade for at least the last 5. Wait til interest rates start to climb and you'll see demand and prices increase so quick you'll be saying what a steal that $1.2m purchase was. Would you know it's 2005-2008 market value? My guess the $1.2 is only up 25-35%.
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While honobob may like that site, most people don't take it seriously, and I would never advise anyone to use it.
The way it calculates appreciation rates, for example, is flat out wrong.
YMMV.
(Though obviously you can draw your own conclusions on someone advising you to invest in real estate right now in Hawaii or San Francisco.)
Everybody I know thinks the site is very useful. Do you have a list or some support for your statement?
It reports the mean appreciation rate. There is NOTHING wrong about that. Again, can you support your statement?
What conclusion are you coming to about real estate investing in SF and Honolulu? Please share, I have decades of successful experience in both areas and would love to compare your experiences in these areas to mine.
I choose not to engage you, and will let others draw their own conclusions about your comments.
Cheers.
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The author of The Millionaire Next Door, Dr. Thomas Stanley, agrees with Arebelspy. He says Texas is the place to be for growing real estate.
http://www.thomasjstanley.com/blog-articles/470/The_Millionaire_Next_Door_Swims_with_the_Economic_Tide.html (http://www.thomasjstanley.com/blog-articles/470/The_Millionaire_Next_Door_Swims_with_the_Economic_Tide.html)
He recommends that high school grads or college students go to school in Texas, learn about real estate, and invest in new opportunities.
Very interesting article I will be linking some people to.
Some great advice even if you choose a different area besides Texas.
Thanks for sharing!
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Not to get off topic, but I don't recommend purchasing in Honolulu - and I own several properties here.
Demand is insane and prices are soaring. For example, a house about 1/4 mile from mine went on the market for $900k. By the end of the first open house, there were 16 offers. 6 Cash. It ended up selling for ~$1.2M. Cash.
Must be a beachfront mansion, right? Nope. 1500 square feet, 3 or 4 bedroom, 2 bath. Average or below average condition. Good neighborhood close to the beach.
Wow, made me look. I was at my retirement condo Dec/Jan/Feb and saw that properties were moving quick but prices were just stable at about $1000 per sf. Just looked in my building and there's a listing at $1425 per sf. So a $200,000 down payment six months ago and a thousand or two a month since (there's no cash flow on properties that appreciate this much) and you walk with your $200,000 and a nice $400,000 bonus!! Yeah, no money being made here!
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The best place to buy real estate is the place with the most job growth...
That place will be supported with a pro job growth state government and a favorable tax structure...
That place is Texas...
Dallas should be very very high on your list
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Not to get off topic, but I don't recommend purchasing in Honolulu - and I own several properties here.
Demand is insane and prices are soaring. For example, a house about 1/4 mile from mine went on the market for $900k. By the end of the first open house, there were 16 offers. 6 Cash. It ended up selling for ~$1.2M. Cash.
Must be a beachfront mansion, right? Nope. 1500 square feet, 3 or 4 bedroom, 2 bath. Average or below average condition. Good neighborhood close to the beach.
Wow, made me look. I was at my retirement condo Dec/Jan/Feb and saw that properties were moving quick but prices were just stable at about $1000 per sf. Just looked in my building and there's a listing at $1425 per sf. So a $200,000 down payment six months ago and a thousand or two a month since (there's no cash flow on properties that appreciate this much) and you walk with your $200,000 and a nice $400,000 bonus!! Yeah, no money being made here!
First time using the quote function, hope it works.
I'm skeptical and cautious in this market. And yes, I'm thinking about selling in the near future, although I wasn't when I bought.
I'm familiar with all the predictions - 15-20% appreciation this year, median price doubles in 4 years. And you're right ... if that happens, the returns will be INSANE because of leverage (my loans at 3.25%-4.5% are feeling pretty good right now).
"Be cautious when others are greedy ..."
"Irrational exuberance ..."
Are you on island? I'd enjoy getting together for a coffee (or beer) to talk some more about real estate. I love the topic!
Feel free to PM me if interested.
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Have you seen this list?
20 Best Markets for Single Family Rentals (http://www.realtytrac.com/Content/news-and-opinion/single-family-rentals-top-20-markets-7670)
I live and invest in one of these markets and I know other investors who are in at least 4 other of the lesser known cities listed there.
Also depends what you're looking for in your personal life. I prefer the warm climates and low taxes so I don't think I would enjoy living and investing in some of those cities. Sorry Syracuse.
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I have seen that list.
I also live and invest in one of those markets.
I believe that list to be flawed, and simplistic at best.
YMMV, all real estate is local, do your research, etc.
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Why don't you pick the place you want to live based on the place itself, move, and then figure out how you'll invest?
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Why don't you pick the place you want to live based on the place itself, move, and then figure out how you'll invest?
+1. I'd make the local real estate a factor (mainly due to what it will do to my expenses, rather than my investing there) but just one factor among many (including such things as cost of living, distance from family, weather, etc.). It would never be the sole determinant, for me at least.
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Thanks for all your comments and thoughts. There's a lot of material here to consider.
Sorry for not logging in for a while and checking this thread.
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I know this thread is a bit old, but half of the fastest-growing cities are in Texas. I thought that would be of interest.
http://online.wsj.com/article/SB10001424127887324659404578501413124202072.html?mod=e2tw#slide/10