How to Pick a Market?

[Janelle A.]

Hi everyone, I'm new to BP. Five years ago I sat next to an older woman on a plane leaving Kauai. She owned a home there and told me how real estate allowed her to travel and live wherever she wanted. She also told me to buy three properties--that they'd come in handy when I got older. So I'm here to make it happen. 

Currently I own a condo in Chicago. I plan to sell it and buy my first investment property, either a multi-family or a single-family that I can rent.

I'm looking at three markets: Detroit (I visit regularly and like the direction it's headed), Atlanta/Macon area (I grew up there and still have a network there), or staying put in Chicago. What do you look for in a market, i.e. how do you know a good market to invest in? Also, any books or podcast recommendations for getting started would be much appreciated!

[Ranny Ma]

Hi Janelle, welcome! I also recently joined BP and started becoming interested in real estate investing. Since I'm also currently trying to identify which areas I would like to invest in, here are some factors that I am considering:

Landlord laws - Is the state you're investing in more renter-friendly or landlord-friendly? I know Illinois is more renter-friendly compared to Indiana for example.

Population/and income growth - Is the city/county you're investing in growing? If it is, you'll have more demand and can command a higher price for rent or sale.

Tax rates - Higher taxes will lead to a lower ROI all else equal and it might be easier to find better deals in a low property tax area.

Hope this helps!