What are some things to consider when investing in smaller cities

Question

Hello,

What are some things to consider when investing in smaller cities?

I'm looking to invest in cities with a population of 100k - 1M (with high growth rates / strong job aspects, etc.), but wanted to see if there was anything to consider when breaking it down to the following smaller categories.

1.) City with a population of <100k

2.) City with a population between 100k - 250k

3.) City with a population between 250k - 1M

Thanks in advance.

Ricardo Hidalgo · Answer

I would invest on the emerald coast if you are looking for a small niche community that has steady and strong job aspect. The rentals are strong, consistent and appreciation is great. Navarre, Mary Esther, Crestview and Niceville are very stable markets due to the military bases and retirees in the area. We have great short term opportunities from destin to Panama City beach. You can go wrong with the long term vision of our market.

Nathan Gesner · Answer

The same is true for cities of all sizes. What's the market like currently and what are the prospects for remaining strong and/or growing? What's the ratio between purchase price and renting? What is the percentage of renters vs. home buyers and is that likely to increase or decrease? How are the public schools ranked? What are the crime levels historically? Do they have fair laws for Landlords/tenants and do the courts act within a reasonable amount of time?

I would use these same measures (and a few others) for any market of any size.

Bill B. · Answer

The size or job prospects pretty much don’t matter if they are within 30-50 miles of a big city with job prospects.

Ps. Coming from an area where 100k is considered a big city. And spending my summers where 25k was a big city 20 miles away I love your classification of a 900k city as small.

Pps. I just checked. Only 9 or 10 cities (depending which google link you believe) have 1 million plus people. And 6 of them are in California and Texas. So only 5 or 6 states have any cities over 1 million. I think you’ll do just fine with “smaller” cities under 1 million.

Patricia Steiner · Answer

The only thing that matters to any business:  ROI.  If you buy it, can you rent it for a return that meets your financial target?  What is the rental demand and price for a comparable property in your price point?  What is the vacancy rate? Do more people rent or buy?  Where do the people in that city work?  All of this is available from a quick internet search...so google away.  The criteria is again - ROI.

What are some things to consider when investing in smaller cities

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