Best cities for buy-to-hold real estate in the US?

[Gareth Meaker]

Hi everybody! 

This is my first discussion on Biggerpockets, quite an exciting moment! :-)

A little background...

I have been involved in buy-to-let real estate for the past few years in South Africa (Cape Town, Johannesburg and Port Elizabeth). I knew the markets well, partnered with someone and started growing a portfolio.

But with the recent concerns surrounding the state expropriating property without compensation (https://www.bbc.com/news/world-africa-45026931), it raises a few concerns over property rights in the country. Yep, thats right. They want to amend the constitution to expropriate property without payment. Without getting into the politics, it is an unsettling development for an investor if property rights weakened.

So I set my sights on USA! 

I knew little about the US property market (last year was my first visit to the US), so started reading everything I could get my hands on, listening to podcasts, and researching online. As you can imagine, it is hard to determine where to even start with such a vast amount of options! 

I have been trying to narrow down, which cities are the best options, looking at demographic trends, unemployment rates, GDP growth, household incomes etc. and narrowed it down to a list below. You may notice that some cities are excluded (e.g. New York, San Francisco, San Diego) mainly because they are a bit out of my price range.

I was hoping that perhaps some fellow investors on BiggerPockets would be able to share some thoughts on these cities:

• Dallas
• Austin
• Kansas City
• Salt Lake City
• Denver
• Cincinnati
• Charlotte
• Nashville
• Boston
• Tampa
• Portland
• Seattle

Which ones are the best options, and why... Ofcourse, please feel free to throw any other names in there.

Whats next?

Once I manage to identify the ideal city to invest in, I hope to connect with the local real estate folks (agents, property managers, lawyers etc.) and progress to the next step in the investment process. 

Getting started in the US real estate market from abroad can be pretty tough, but I know it can be done. This is a step in the right direction.

Look forward to engaging with you all! :-)

Gareth

[Josh Stack]

Hey @Gareth Meaker

The land reform discussion taking place in South Africa is certainly a complicated and contentious one.  While we have our own challenges in the US, luckily this issue isn't one of them.  I love Cape Town and visit often as well as having very close South African friends so I have some context for it being a challenging time in the country.

If you are looking into the crystal ball many years down the road I would suggest your focus should be on the southeast of the US away from the coast.  Taking into account climate change, the regulatory environment and future growth (population and real estate valuations), cities like Charlotte, Nashville, Chattanooga, Atlanta, Birmingham, etc etc should win handily against costal cities or the rust belt.

Ultimately the best city to invest is the city you can invest in first and the most sustainably.  Real estate when bought right, over the long term, is one of the best investments.  Focus on getting started rather than hyper-optimizing for the best possible scenario in the short term.  Invest based on fundamentals in areas that will grow or be stable and with conservative underwriting and you'll be flying back to South Africa in first class to visit friends and family in no time.