Small Town Investing

[Matt Brust]

I live in a smaller town roughly 11,500 people and about 30 minutes from Columbia, MO. Does anyone have experience investing in smaller towns, Pros and cons to it? The area I’m in is C-B with a few A neighborhood sprinkled in with no rhyme or reason to their location, demand for rental properties is high but the landlords here already close niche and older. There are plenty of good well paying jobs around, mostly factory but the work is here and close by although I’m new to the area (5 months) I’ve noticed some hot spots for crime, drugs mostly, but what confuses me is one block is decent, yards maintained, clean looking, nice curb appeal, but then you go a block down and it looks like a war zone. If any one has some do’s or dont’s or has some experience with investing in similar areas I would love to hear your feedback and pick your brain! Thanks in advance, Matt.

[Nathan Roberts]

@Matt Brust

I was born in raised in Columbia, MO plus I have family that reside in Mexico, MO. Personally, I am not an investor, but I represent investors as a real estate consultant with Exp Realty. It is common for any city/town to have nice properties on one block and distressed properties a block away. Prime example of this in Kansas City is what is known as the "Troost Divide". East of Troost it is common to see blighted neighborhoods with distressed properties, and little community resources/assets. On the west side of Troost, you will see properties worth $150k+, less crime (crimereports.com), more community assets, etc. The best thing to do is learn as much as you can about the area. Knowing you are only 30 minutes from Columbia, I would recommend you start investing there due to the housing demand brought on by Mizzou students. It's also a lot easier to assess which neighborhoods are worthy of investing in. You can make money by investing in any part of town (distressed neighborhoods have renters too) but you need to know how to thoroughly screen tenants. A property management company should do this for you but most will not manage below C class properties. If a property manager won't take on a property due to the area, that is a great indication to invest elsewhere. DM if you have any questions, I hope that this helps.