Buy and hold: What would you choose, Florida or Wisconsin?

Question

Hello Bigger Pockets,

I have been following this blog and podcasts for sometime now and it is a wonderful community!

I recently moved to Sarasota, Florida with my husband from Lucerne, Switzerland. We wanted to move back to the US to pursue real estate investing.

We moved here after graduating college because my grandparents and my parent live in the area.

However, after a few months we still feel this may not be home for us, we miss being around young people and enjoying all the seasons. We just are not beach town people.

We have saved 10,000 for a down payment and plan to get a homepath duplex and rent out one side. We are ready to buy, we have great credit and stable incomes.

The challenge is, our lease is up in a few months and we are considering going back to Milwaukee, Wisconsin (where I am from originally).

My question is: Where would you rather invest, Florida or Wisconsin?

Looking forward to hearing your opinions!

Sarah

Michael B. · Answer

As a Floridian, my answer is ... neither. Figure out who you are and where you want to be. Get your career going and save some money first. Most homepath properties need more than $10,000 in renovation just make them pass health codes, much less be rentable. And a landlord (not to mention a homeowner) needs funds to address problems as they come up. It's no fun being an undercapitalized landlord. And living next to your tenant isn't for the faint of heart either. Before you buy, save at least triple what you have (maybe quadruple) and then take account of where you want to be, where your career skills will be put to best use -- essentially who you both want to be when you grow up. Also learn how to budget, save, and invest your money, knocking out any consumer debt you've accumulated on the way. Your time to invest will come, but not now. Get your careers going and save money. When that time comes there will still be places to buy in both Florida and Wisconsin.

Dawn Anastasi · Answer

Sometimes it seems ... all in one day!

Tony Cavalli · Answer

I've never been to Florida and I invest in Milwaukee all the way out here from California... (I know Aaron Mazzrillo is just yelling at me after reading that.) so my answer will have to be milwaukee. I see good cash flow and that makes me oh so happy. You can live wherever you want and invest wherever you want as long as you really want it.

Andrew J. · Answer

Agreed 100% Mike Lowery, for all of Milwaukee faults (as every major city has) there is a lot of innovation, development, and energy in the city right now. I encourage to keep a watchful eye however, if the Milwaukee Bucks leave the city it is going to be devastating. Yes the Bucks are not very good, and I in fact have not been to a Bucks game in a few years; however, anytime a professional sports team leaves a city it is not good. The business brought to the downtown restaurants, bars, taxi service, etc will be completely gone. Just my 2 cents, if you have any questions about the different areas/neighborhoods in the city I can do my best to answer any questions. There is a good following from Milwaukee on BP, and I am sure any questions you have can be answered.

Mike Lowery · Answer

Sarah, Now you can say I am a little biased because I live in Milwaukee, but I think you answered the question yourself when you said you want to be by younger people and experience all the seasons. I dont know if many people will know both markets, but I think Milwaukee is full of young professionals, who have plenty of energy and are planning on settling down here. You cant deny that Milwaukee is also a place where you will see all four seasons....

Susan Gillespie · Answer

Account Closed congrats on your news and good luck with the move. April is good - flip flop weather will come soon, and the snow, ice and polar vortex will be a distant memory...

Ramon Jenkins · Answer

Account Closed Good luck with your relocation to Wisconsin. I look forward to meeting you at some of the local meet ups.

Susan Gillespie · Answer

Account Closed A duplex can be a great first purchase that you can later convert to full rental. For choosing a location, I would consider: -your primary knowledge of each market, including real estate prices, taxes, rental supply/demand and expenses by location -strength of your local network and contacts, including people you know and trust -your personal goals and longer term strategy, including exit strategy I have experience in Minnesota and Florida, and generally find FL expenses higher and market conditions more dynamic. I second @Michael B. 's advice that you save more than you think you'll ever need. It'll give you a cushion, peace of mind and more options in the long run. And I would run a side-by-side cash flow analysis to see how your options differ. Research your numbers and you'll get a better idea of how rental income and expenses vary by location.

Ana Adler · Answer

Account Closed I have never been to Milwaukee but I live in Florida, just up the road from you in St Pete. I find Investing in this area is challenging to reach any decent numbers. First, there is required hurricane insurance (no small number). Now we are looking forward to mandatory flood insurance in the near future. Congress caved this session and postponed the legislation for a few years but it's only a matter of time. As for me, I am looking elsewhere.

Account Closed · Answer

@Dawn Anastasi @Andy J. @Mike Lowery After much consideration, my husband and I have decided to move to MKE in April! The decision came easy after my husband was offered the opportunity to work with a general contractor and property manager who invest in rentals in Milwaukee! We will have the opportunity to save up more money and learn about this business till we find a duplex to buy. Time to trade in our flip flops for something warmer :)