Finding a great location

[Chase Caudill]

Hello everyone!

    Im very excited to be starting my real estate journey and I will be buying my first property in the near future. Ive been doing a lot of research through reading books, podcasts, blogs etc. I feel pretty comfortable with a lot aspects of a good deal and cash on cash returns, appreciation, rent rates, good neighborhoods. Basically any aspects that invovles math or numbers I can break down pretty well. The thing that I feel I'm lacking in is buying in a good city/area or finding out if rental demand is needed in that area. I'm trying to buy in Ohio because I grew up there and are somewhat familiar with a lot of the cities and towns. The places that I have narrowed down my searches to all typically have small populations of around 8,000-12,000 people. They have great schools, low crime rates, good employment, lower costs of living etc. Everything on paper seems great, I'm just hesitant on these lower population areas because I don't know if my property will stay interested. If anyone could give me any type of advice on areas like these I would greatly appreciate it. Any advice on location would helpful!

Thanks everyone,

Chase 

[Rj Lindemann]

Hi Chase! I too live in a more rural area. The town I live in is the county seat, with a whopping 2,700 people. We have the largest county in Illinois to be covered by only one school district. Therefore, I understand the concern with small populations.

That being said, I'm 19 and over the past year I was able to purchase 3 rentals due to their cheap purchase prices, all of which are occupied by great tenants. The thing about these smaller communities often times is that while houses for sale might sit on the market for 6 months to a year before they are sold, rental vacancies will be filled within a month, with several applications and inquiries every day. Larger apartment complexes and multifamily buildings aren't as common, and demand for rentals is usually pretty strong.

The major issue you may run into in the future is if you get a larger portfolio, it will likely be a long and painful process to liquidate should you ever decide to do so, since putting ten or twenty houses up on the market all at once in these communities would probably add 30 - 100% to the available inventory, greatly reducing their potential sale price. Meaning you would likely need to liquidate one or two at a time.

As to the getting a feel for the need for rentals in the area, go online and try to find a rental in that area. In these smaller communities you may only see one to five, none of which have been up for more than a month or two. That is a good indication that rentals are a need, so don't be afraid to buy!

From one rural investor to another, good luck, and let me know if you have any questions!