What states/areas to invest in now?

[Allison R.]

Hi everyone! My husband and I would like to buy our first investment property (buy and hold) this year but would like to know about other markets than the one we are currently in! We live in Los Angeles, and prices are high right now. We would like to invest out of state, but I don't know much about other markets. We have thought about Phoenix area, TX, St. Louis or Lincoln/Omaha, NE - only because we have friends/family in these areas, visit the areas often, and are familiar with them. But again, I'm not sure how those markets are! I know now here in LA, it's more of a sellers market, and honestly, I'm not sure we have the funds for an investment in LA. I'm open to investing in CA outside of LA too if we find the right thing. What are the great cities to buy in this year? Anyone familiar with the markets in the cities I listed above? Thanks in advance for any advise! MODERATOR: DO NOT USE THIS THREAD TO ADVERTISE. ADS WILL BE REMOVED WITHOUT NOTICE. THAT INCLUDES "CONTACT ME IF YOU WANT MORE INFO."

[Mike McKinzie]

With the exception of @Ali Boone , everyone is touting their HOME market.  I wonder how many posters on here, other than Ali Boone and Jay Heinrichs actually own property in another area?  I live in Orange County, California, I was born here.  And I own a total of one rental in Orange County.  But I have rentals in the Fresno, CA area, AZ, OK, CO, TX and TN.  The highest return on my investment is TN but I bought there in 2012.  Hedge Funds and other institutional investors have been buying heaving in Memphis, just like they did in Phoenix.  So good deals are hard to find there.  The next best return I have is in Oklahoma.  I do not expect appreciation, I buy newer homes, less than 10 years old, and get 1% plus in rent.  Texas has been good as far as being steady, but no appreciation and high property tax bite into your return.  I don't know much about other markets as I DO NOT OWN THERE.  So for all the posters on here touting your own market, how much do you know about other markets?  We enjoy reading about the returns in YOUR market, but to be fair, you need to know how they compare to other markets.  It can be great to buy a house for $40,000 and get $800 rent, but if the house needs $25,000 in refurbishing and is in a war zone, you might be better off paying $100,000 for a newer house that rents for $1,100 a month and is in a middle class neighborhood and a great school zone.

The best advice I can give is to read, read, and read some more.  Read Business Magazines, read Business Newspapers, follow trends of where businesses are moving, population growth, demographics in general are you FRIEND.

This question is asked about three times a day on BP, it seems.  And most of the same answers follow, posters marketing their home territories.  Do your own research.  Visit areas that appear to have potential.  Have a solid set of guidelines for what you want in the way of return, potential appreciation, price range, rent range, pride of ownership, and much more.

Remember, the lower you go in price and rent, the closer you come to crossing that 50% guideline threshold.  My average rent is $1,000.00 a unit and I average 40-45% expense ratio, 43% in 2014.  A water heater cost the same, whether the unit rents for $750 or $1,500.  But the percentages change a LOT!

Best of luck to you, and everyone, in 2015!