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Updated almost 4 years ago, 02/28/2021
Best markets to live and invest?
And now we're confronting the decision on where to move, and where in the country would best serve our financial goals of reducing our personal living expenses and present the most opportunity for acquiring and operating income property. We also want to find some place we enjoy living, or at the very least, tolerate for 5 years as we build our portfolio. I personally would love to live in Texas... San Antonio is the most likely candidate, but I know that Texas is a hot market and I am left wondering if maybe I'm just too late to the party there. The property tax situation there seems like it could be a significant risk to cashflow, especially given the appreciation we've been seeing there. And I wonder if we'd even be able to compete as part-time/beginner investors there. So what do you guys think? Does Texas still make sense for small/part-time investors? Or should I be looking elsewhere?
Or, let me re-frame the question just a bit. If we wanted to optimize our lives for a low cost of living/tax burden the most opportunity for building our real estate portfolio in a beginner-friendly market, where should we be looking? We're pretty much open to any/all possibilities. What do you think?
Appreciate all of your input!
@Josh Deeden I was going to say Boise and other mountain states towns like Bend, Ketchum, or Bozeman like @Kory McCain but if weather is a concern Asheville gets my vote
It sounds like you're bailing on California for all the right reasons, but why move to Austin or Atlanta or Boise where everyone and their brother from CA is going to? What do you think those places will look like in 10 years? DC?! Are you kidding guys?! You're venturing into the belly of the beast. If you want to fix your personal finances then go someplace with like-minded people who enjoy low-cost of living and self-sufficiency. That's not going to be a trendy "hip" market like Austin.
St. Louis isn't a bad shout actually. There is apparently a thriving tech/entrepreneur scene here as well as several established Fortune 500s. There is ample opportunity for REI in the city, with SFR in the county, and plenty of awesome outdoor activities within an hour. Tons of state parks, float trips, camping, hiking, Johnson Shut Ins, great fishing, hunting, etc. etc. Winters get cold in Jan/Feb, but snow is hit and miss. We just had one of the worst winter storms in my 16 years down here so terrible winters are few and far between.
If you want outdoors with low cost of living, check out New Mexico. It's a really unique state with everything from desert to lakes and boating, skiing, hiking, golf, literally anything you want to do outdoors and they have the climate and topography to do it. Albuquerque or Las Cruces are great jumping off points and relatively large, thriving cities for the region.
Florida would be another good choice, specifically the panhandle, even into Alabama. No state tax, good government, nice weather obviously, and outside of Miami and some of the major cities, cost of living isn't too bad, especially if you go over into Alabama which is still close enough to Atlanta and some other major cities to give you good WFH job prospects.
Charlotte, NC is another great shout. The state has really boomed and there are a ton of smaller cities dotted around that you can still live comfortably for relatively cheap. The blue ridge mountains are amazing and there's a ton to do and you're close enough to the ocean to take weekend trips. Tennessee on the other side of the blue ridge, Knoxville, Nashville, or even Chattanooga would be good to check out and TN has low taxes and smart government. Nashville has blown up, but the rest of the state hasn't come up to that level.
Lastly, maybe buy a travel trailer and explore the country a year until you find your place to call home. You can get a REALLY nice 5th wheel trailer for < $50,000 and a decent truck to pull it for half that. Your payments on the combined rig will be way less I'm sure than your rent in the trendy neighborhood and if your work is 100% remote then why tie yourself down immediately? Something to think about, we love our camper but unfortunately for work we're tied to a location still.
Good luck!
Expatistan is a great site to compare cost of living easily between cities.
Freedom in the 50 States is a great way to compare governments between the states depending on what's important to you.
Josh,
I am also planning my departure from So Cal. Tennessee is great, as well as Kentucky. I have worked all over the country and I my experience has taught me that you truly get out what you put in with people. I believe you will have a positive result if you are positive etc...
Our move is to Montana, but strictly for the outdoors and beauty of the state and the people are some of the kindest people. Texas to me is the same with regards to the people being great. I would start looking for deals now and do not wait. Then once you find one that you can swing consider moving there. You can make a deal on real estate, perhaps find a creative way to finance it. I.E. if it is an owner that wants to relocate and will carry the financing for 2 to 3 years on a multi unit that needs work there could be a great potential upside after you make improvements. I am working on a 3 unit that needs a lot of improvements and have asked that the owner carry interest only for 3 years with 0 down. I am willing to pay a little more for this property because of the unique financing possibilities.
Best of luck to you and your family!
North Idaho is being taken over by Californians. Coeur d'Alene is booming. We moved to Chattanooga as everything is pointing to it being the next Nashville. Inexpensive, growing, lots to do - it's a great place to be!
There are a lot of good options for you to choose from as many have mentioned.
I'd research all of the areas mentioned in the forum as they all have their benefits.
If you do have any questions about the Nashville market please reach out to me. It's a very popular destination for the mass California exodus.
- Luka Milicevic
My biggest take away from what you said is "I want to live in Texas" I think that is your answer. Plotting a massive life move based on what market will allow the highest cash flow is wise. However at the end of the day life is short and it's just money. Financial freedom can likely be found in every market using the right strategy. I think Texas is a landlord friendly state. Also isn't the Texas market always "hot" lol. Just my 2 cents. Good Luck!
@Josh Deeden Finding a market that fits your investment and life style will be 80% of the battle, but there are some great markets for sure. Everyone loves Texas for no income tax but they forget to check the property tax rates and as a REI guy that really cuts into your NOI so might want to look into that.
But when you talk about missing out, a well capitalized and educated bet will always pay off with the right amount of time. And where you are getting out of a sinking ship (CA) the sooner you liquidate and relocate the more your returns will not be effected by the declining markets you are leaving. I would think less of the missed opportunities from the past and look at getting out before you lose more time and buying power.
@Josh Deeden Haha. We relocated to the Myrtle Beach area in South Carolina - wife got a job which was part of the equation but we are stoked with the decision so far. Cultural fit is certainly a thing and I don't blame you for thinking about it, but to be honest there are so many other people moving into here we hardly "feel" it. We do miss the mountains and hills where we were but there are locations nearby and looking forward to getting into beach/ocean activities.
@Josh Deeden
Contended poverty is an honorable estate but if indeed it be contended it's not poverty at all. Its not the man that has too little but the man who craves more that is poor...
With that said I believe people do it to themselves. California has many benefits and higher wages. But unfortunately people get caught up in the hype and want all the lavish things, keeping up with the Joneses type of attitude. Quite frankly you can have a very nice living here. But people have their priorities out of wack. This is the true reality.
The DFW market has exploded over the last 5-7 years. As homeowners and investors, we love it here. The Dallas suburbs have excellent public schools. The population here is diverse and becoming more so every day. It has been a great place to raise children.
We are in the center of the United States making it easy to get anywhere. There are two great airports if travel is important to you. The industry here is extremely diverse. There are always new companies moving into the area. Making for a very strong job market. This is an incredible market for tech jobs.
We are one of the few major metropolitan cities with affordable home prices. There are always opportunities for those who recognize them quickly and have realistic expectations. Your money will go a long way here by comparison to California.
Public transportation is a work in progress. You definitely need a car to live in the Dallas-Fort Worth area.
Originally posted by @Troy Jaster:
@Josh Deeden - Just sent you a DM with some local info about San Antonio. Looking forward to connecting with you!
Sent you a DM. Looking forward to connecting with you.
Originally posted by @Tim S.:
Have you been to San Antonio? It's not for me.
LOL! Specifically to the OP: "Have you been to SA in the middle of August?" SO many folks from Cali I know move to TX and can NOT take the summers here. It is nothing like anything you have ever experienced. Even in the dessert. Be warned.
But we natives (Houstonian here, not from SA but it's only a 2.5 hour drive) have adapted I guess?
@Josh Deeden Texas or Florida. Very hot markets to get into but taxes advantages are awesome.
Originally posted by @Jim D.:
@Josh Deeden -- Have you considered Nevada? We moved from Texas (where we lived for six years and LOVED it) to Nevada, outside Vegas, and we are very pleasantly surprised with how much we also love it here. Austin is one of the coolest cities in the world, but what we didn't like about Texas is that we felt there wasn't a huge diversity of outdoor activities within a 1 to 4 hour drive. Couple examples, just yesterday we drove an hour from Vegas and we were skiing...can't do that in Texas. Likewise, more hiking and mountains here in general. And my wife loves the Pacific Ocean so we're sure to do a few beach trips each year whereas the ocean in Texas simply doesn't compare.
As I said we loved Texas and both Austin and San Antonio are wonderful cities, I thought we'd never leave. But for access to certain outdoor activities, I'll take Southern Nevada. And you still have the no-state-income-tax, low property tax, lower home prices certainly than Austin (not sure where San Antonio is at)...and we invest here too. So long story short, if you want to optimize for low cost of living / financial, enjoy the outdoors, avoid winter, and perhaps still access SoCal and its amenities from time to time...maybe NV could be a consideration for you.
This is VERY interesting to hear! Your choices and motivations sound very similar to ours... what about investment opportunities in the area? I was under the impression RE was a bit pricey in NV outside LV thanks to the recent growth? (Had a friend sell their modest suburban home in LV and buy a McMansion in Houston with cash from the proceeds and have enough leftover to seed their business. So maybe I have the wrong impression?)
@Josh Deeden I have had success setting up a "pod" of rentals in Michigan. The roi is insane and all of my renters continued to pay through the pandemic. If I wanted to continue growing I would probably do Austin next. I used to live in Austin and there's going to be some incredible renovation work there over the next few years. I would probably start buying later this summer when people have hit the pain point and I would bring in my renovation crew from Michigan who are familiar with disaster remediation. I would do the same thing there that I did in Michigan "cash, no negotiations, no inspections, you can have the buyer commission, how about $x?" I got a yes nearly every time. I don't recommend skipping inspections unless you really, really good at it. I always did my due diligence before meeting with the agent. I also brought a contractor with me who did the inspections while I was doing the walk-through with the agent. A head nod from him and I made the offer. Ah, good memories!
These are completely different questions of where to live & where to invest. Investing in markets that have positive cash flow & low taxes are the best places to invest.
Originally posted by @Cortney Arenstein:
As far as investment opportunities, personally I don't think Las Vegas/Henderson is that different from many other places at the moment --- strong appreciation the last few years and good cash flow on a decent place is hard to find. That said, like elsewhere, it may take time and persistence and looking for off-market deals but you can still find what I'd consider to be decent investments. We're about to close on a solid cash-flowing condo...and condos aren't usually my first choice for investments but we found a deal in a community we're familiar with so we went for it.
Are you thinking about a move to or investment in NV? I wouldn't consider the whole Las Vegas Valley "pricey" but that may depend on what you're looking for and a person's frame of reference (certainly not compared to Austin!).
- Rental Property Investor
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@Josh Deeden random thought but it seems like lifestyle wise you might be well served with an airbandb model in one of the areas you find really attractive. Maybe even a compound type place where there is a main house and a rental model if you want to live directly near the lake etc. But you are both remote/flexible, so much can be done virtually, it can be profitable as heck if done well and could set you up in a place you might want to retire to.
@Josh Deeden
Pittsburgh is a fantastic place to house hack.
Plenty of small multifamily and a good number of renters with great price to rent ratios.
Prices have gone up and taxes can be a bit high but the rents typically offset it even in the nicer areas. Especially if house hacking and self managing. You can also find deals in a variety of areas that work for pretty much any kind of real estate investing (though becoming harder to find flips and BRRRR has been tough pretty much all over the nation and pittsburgh is not excluded.)
- Anthony Angotti
- (412) 254-3013
Tennessee stinks, don't want to go there.
@Josh Deeden Many technology companies are moving to Texas, it's a great place to be. I know a few engineers out there in Austin and San Antonio. Being from Tampa, FL the same thing is happening there I had to leave the city, it's way too noisy and crowded.
TL;DR: As an investor so long as the market is in the rebound phase, and jobs are moving in. It's a great market. As an agent, If homes are getting multiple offers it's a great market. As a homeowner, I like to get in while the market is slow, with potential jobs in the IT industry in demand for talent. Depending on what you're looking to do after those 5 years, sounds like you can move anywhere with a great market. Joseph (Joe) Asamoah makes a killing in DC, with Section 8 housing. Listen to BP Podcast 356. He is a great guy to learn from.
Northern Virginia (NoVa) as a W2
Life in NoVa is ideal as an old-soul-jock-techie (me & friends). It is called the Silicon Valley of the East. Jobs, wine vineyards, local beers, diverse foods, sports. There are ample contracting jobs from large contractors HQ here such as Leidos and Lockheed Martin (great work-life balance, even greater job security due to the number of contracts available). Government jobs are available from DC because most agencies HQ there. I recently noticed a major uptick in positions available for Google, Facebook (Reston, VA) not to mention Amazon as they build HQ2, possibly due to the pandemic and their revamped remote policy. If start-ups are your thing, we have a plethora of those too. Housing is still incredibly affordable. However, I can see the price rising as more people move into the area. You can draw a 50-mile radius around Arlington/Alexandria, VA outside of DC and you'll be able to commute within 45 minutes from a six-figure job depending on your expertise as a tech. Fredericksburg, VA is also another one of my farms. For the past three years, the market has been blazing hot, especially near I-95. If you are willing to leave home before 0630 from Fredericksburg, VA, traffic is non-existent or you can take the train and nap. The trains go directly to the heart of DC-Baltimore Metro (The Metro Center). Don't want to do either, carpool is a major thing. There is "slugging". Another secret area, no one knows about. I'm sure they will know now, is Culpepper, VA right outside of Fredericksburg, VA. It is much slower, but it has great vibes. Amazon has a datacenter in Culpeper as well. I believe due to HQ2 being not too far from Culpeper. It will also be seeing major population growth in the next 15 years. Many people choose to live in Woodbridge, Stafford, Manassas, Lorton, Gainesville VA area due to the affordability and closeness to the DC-Baltimore Metropolitan area/work. They afford the tranquility and robustness of suburbia life, without the DC madness. Silver Spring, MD (Montgomery County, MD) is on the border of DC, Downtown Silver Spring is great to live in as well, also recently gentrified. Silver Spring was one of the final cities Amazon was looking at for HQ2, ironically it is not too far from Alexandria. I've lived/traveled for extended amounts of time in all the locations I've listed except West Virginia. I just know many investors who invest there. Not many Multi-family homes available in NoVa, you have to go to Central and Southern Virgnia.
Investor in VA:
As an investor in the area, it is great. You can drive to Maryland (Baltimore Area), West-Virginia, and Pennsylvania (Philidelphia). Those are great states with cities ripe for investing, Central and Southern Virginia have locations such as Petersburg and Richmond, VA which are in the gentrification phases. Ample Opportunity Zones for investors looking for a major tax break. VA beach still has houses that are EXTREMELY affordable in comparison to the Clearwater Florida beach homes I'm used to seeing. If you are up for it, an Air BnB, the beach house is a great vacation in the summer when everyone drives to the beach.
Investor in MD:
Many Multi-Family and SFH, available for BRRRR or Flip.
I wrote a novel! However, It sounds like you and your spouse are planning a major life revamp. I wanted to give you as much information as possible. Let me know if you have questions or need anything else. Good Luck!
If I relent a bit on the no state income tax requirement, that opens up markets in NC and GA, two other places we think we'd be open to living. Perhaps Idaho as well under the right conditions.
Anyway, that's my current thinking. I've come to realize I just need more data and personal experience with these places, so it looks like spring and summer is going to consist of lot of nationwide travel for me. Let's hope this dang pandemic slows its roll in the coming months!
@Antonio Cucciniello. I have been keeping my eyes on San Antonio for sometime your recommendation for a wholesaler would come in handy. Thanks in advance Antonio
@Josh Deeden
Anywhere in Texas. Half of California is moving here and it will be a hot market for years to come with TX being business friendly. I have 9 SFRs in the DFW area and demand is insane.
Originally posted by @John Morgan:
@Josh Deeden
Anywhere in Texas. Half of California is moving here and it will be a hot market for years to come with TX being business friendly. I have 9 SFRs in the DFW area and demand is insane.
That's encouraging. Curious to know, what are your rents and have you been able to raise them with any regularity?