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Updated over 4 years ago on . Most recent reply

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Robert Swiss
  • New to Real Estate
  • NY Metro
3
Votes |
2
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Choosing a Market to Invest in: Aim for Equity or Cashflow?

Robert Swiss
  • New to Real Estate
  • NY Metro
Posted

Hi Everyone,

I'm about to graduate college and looking to jump-start my professional career with a well-placed real estate investment, most likely a house-hack. The idea is to live in an up-and-coming market for a few years while I work (energy engineering/flight instructor) and use my investment to supplement my entry-level income and accelerate my financial goals. 

I've mainly been looking at the markets of Austin, Seattle, and Anchorage as they are all good professional fits for me, and I've compiled what seems to be the general consensus on bigger pockets below:

Seattle: Equity Play, Very Hard to Cashflow, Very Uncertain Appreciation

Austin: Equity/Appreciation Play, Hard to Cashflow, Some Appreciation likely but Huge Growth Unlikely

Anchorage: Equity/Cashflow Play, Regular Cashflow, Uncertain future with Slight Depreciation Possible

There are many who say that it is critical to gain equity in highly desirable areas early in your career, and that cashflow will always follow net worth.

Then there are those that say that Cashflow is all that matters, especially early in your career when your income may be <50k. 

My question is, as a young person with relatively low income who is using real estate to establish financial security, would you consider markets with no cashflow just to establish equity, or would regular cashflow be the best way to multiply my real estate portfolio?

Best, Rob

Most Popular Reply

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64
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33
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Kevin Hoodwin
  • Dallas Fort-Worth
33
Votes |
64
Posts
Kevin Hoodwin
  • Dallas Fort-Worth
Replied

Just remember cash flow is more reliable than appreciation.  You can either hope for appreciation tomorrow or accept better cash flow today.  It's all about your risk tolerance at that point.

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