How to choose an area OOS to invest

[Travis Turner]

Hello.

First post here.

Been watching podcasts and read a few BP books.

Looking to invest OOS in an area with lesser barrier to entry than here on the wedge of the Oregon Coast where 2/1 sfr are $200k+.

Been researching different areas to start narrowing down but unsure how to decide on an area.

These are the areas I have narrowed down

1. Evansville, In.

2. STL

3. Fayetteville, NC

4. Cleveland/Columbus OH.

Interested to hear from others benefits or drawbacks in a particular area.

Mainly focused on COC return and slight appreciation would be nice.

Looking for LTR on a SFR or duplex to start.

[Yuko Tanaka]

Another upvote for Columbus, OH. 

I'm also in the process of market selection and have been following Neal Bawa's data-driven market selection system. It's a solid methodology--see here for a 60 min overview and here for his free Udemy course. 

While I haven't run the numbers on Evansville, I have on the other three. Columbus stands out. Its population growth, median household income, median property value, and crime rate all get an A+. Job growth isn't the stellar 2%+ that Bawa recommends, but it's decent at 1.5%. For a city its size, these stats are hard to find. 

On the Columbus/Cleveland point, check out the chart below. Cleveland has been losing population for the past 20+ years. Columbus's numbers go up as Cleveland's go down, which suggests that Columbus has been gaining some of Cleveland's lost population for the past two decades. As you may know, rentals will likely be in less demand in a market where the population is steadily declining because it'll have more housing supply.

If you're selecting between markets you don't know well (but where you plan to build a superstar team), I'd go with the place with more tailwinds and less headwinds.