Where should I buy?

[Peter Nierman]

Hi all, 

I am an entry level investor (own my house with a mother-in-law) and am looking to buy my first true rental property.  Since I live in Seattle, where prices are crazy, I am looking out of state.  

Currently, I have about $50k for a down payment and have been looking in Atlanta, Indianapolis and Philadelphia.  It seems all the good deals in Philly are in bad areas, Atlanta is not as good as it was a year ago, but Indy looks pretty good. 

Would appreciate any input from others who are investing out of state or who have an idea as to what markets are safe but will still cash flow.  This is a pretty big step for me, but I am ready to take the plunge.  Also interested if people have input on how to manage out of state property - figure I need property management/yard maintenance. Thanks!

Peter

[Mike Girard]

Welcome Peter.

A caveat: I'm new to this myself having just bought my first property in Philadelphia. I'm a New Yorker and moved here a month ago, but I feel I got to know some areas pretty well through my house search. I was also considering just being a passive out of state investor. 

As to the question of where to buy, I second the endorsement for South Philly close to Broad. The deals are better on the west side but the neighborhoods are more of a mixed bag. Very much a block by block situation as described above. I'm bullish on this area mostly because I think it's such a great neighborhood myself, and just expect people to realize that as prices push them farther south. That said, I'm a little daunted by the successive, seemingly eternal 'For rent' signs on some of my neighbors  houses.  

I think Port Richmond is another good spot for buy and hold investing. The property value won't appreciate as fast as some other areas, but the buy in prices are reasonable and it's a pretty safe, stable area.  It's less block by block than South Philly. The area from Aramingo to the river is safe. I haven't made an exhaustive study, but I think you could get solid returns there and its adjacent to Fishtown, where people are getting priced out. 

For speculative buying, Brewerytown seems like a good bet especially if you find a deal along Girard Ave. 

As to investing remotely, all the cities you mentioned have plentiful offerings through turnkey companies. The site Hipster Investments aggregates deals from different companies. They like Chicago a lot, but feature several offerings in Philly and Indianapolis. The prices seem competitive and you don't have to worry as much about the quality of the neighborhood because when you buy from a turnkey company you also buy a management company. 

To get a feel for an area without visiting it, I find the maps on Trulia really useful regarding crime, commuting times and area businesses. 

I'm probably way to new to this to be offering this much advice and welcome corrections from more seasoned investors.