In search of a market that can pass the 1% test, it seems to be Minneapolis might be close as they have houses in the 150K-200K range that can rent for 1300-1700. They have super low inventory for rentals, which would help in any vacancy. They also have a hot housing market with limited inventory, so there seems to be more play for appreciation. On the flip side, the houses in that price range is 100 years old. Most of them are in bad areas, so the potential of having repairs will be high. Also with their crappy weather, maintenance could also be bad. What is everyone's thoughts on it? Is there any old neighborhood that is getting gentrify?
Oh yeah they also have high taxes, so you are basically adding $20K to the cost of the house.
Not sure if that answered my question, but don’t mean to offend regarding the weather. I am simply stating the snow rain and cold will lead to more wear and tear
Not sure if that answered my question, but don’t mean to offend regarding the weather. I am simply stating the snow rain and cold will lead to more wear and tear
Snow and Rain don't lead to more wear and tear. Tenants do. Just budget extra $100/mo for snow removal per season.
Saint Paul, MN · Member since 2018 · 189 posts · 107 votes
7y
@Tom Makinen- You have a lot of great points. As long as you're planning for those things you'll be okay. I moved out here from Salt Lake City so some of the items you mention totally make sense to me, however these can all totally be mitigated.
Where are you now and would you be investing long distance? What are your end goals? Cash flow it sounds like, but it's not clear. Do you plan on holding these properties for a LONG time or a few years? In the end you'll need to budget CAPEX if you're holding longer term, that's in any market. It sounds like you've done some research so you know rent to price it pretty good in the cities, which should justify your concerns to a point.
I really care more about appreciation, but I don’t want cash flow to be negative or high vacancy period. I also don’t want a huge initial investment as I can park my money elsewhere. Mini seems to be a city that is worth putting a search for.