Methodology for selecting city to invest in

[Roman A Sandler]

Hi guys,

I bought my family home 3 years ago and looking to get my first SFR investment property. I live in Los Angeles and dont want to get the investment there due to (1) cost (2) tenant-friendliness.

I am trying my best to be methodical about where to invest out-of-state, so I made the following criteria:

1. Population: >800k people in 2023 (based on https://en.wikipedia.org/wiki/Metropolitan_statistical_area)
2. Population growth
   1. 2020-2023 Population growth >5% (based on https://en.wikipedia.org/wiki/Metropolitan_statistical_area)... 
   2. Population growth >1.5% (based on https://www.nar.realtor/blogs/economists-outlook/the-nations-most-popular-and-fastest-growing-metropolitan-areas-in-2023?g=173096))

1. Housing supply shortage: # new jobs per permit issued >1.5 (based on https://www.nar.realtor/research-and-statistics/housing-statistics/housing-shortage-tracker)
2. Rent affordability <.33 (based on https://www.zillow.com/research/housing-supply-32743)
3. Housing affordability <.40 (based on https://www.zillow.com/research/housing-supply-32743/)

Based on these criteria I got 3 cities:

1. Raleigh, NC
2. Charleston, SC
3. San Antonio, TX

I would love to know your thoughts on this methodology. Are there things I am missing?

Of the 3 cities, I am leaning towards Charleston since it is bounded at least partially by water and wetlands which would prevent large-scale urban sprawl and increased supply of housing.

PS: Happy to share my spreadsheet w/ anyone who DMs me. 

Thanks!