Any areas out there for single families close to 1 percent rule?

[Benjamin Kanevsky]

Looking to find an area to purchase some single family rentals. Not looking in areas with declining population, high property taxes or schools rated below 5. Is it still possible in 2020? I’ve literally been looking nationwide without a market in site.

[Justin Tahilramani]

1% rule with good schools? I'm not knocking the importance of school ratings, but that is not something that I place a high value on when evaluating a cash flow deal. There is a shortage of affordable housing in America. Unfortunately, most affordable housing is not located in average or better school districts.

[Stefanie Jensen]

@Justin Tahilramani

Justin, I totally agree. I’m sad to say it, but schools with lower income populations are generally ranked pretty low. There are so many factors contributing to it, but those scores are generally just reflecting how privileged the students are. Schools with tons of stay at home moms who volunteer constantly and get their kids outside of school tutoring are going to be ranked higher. You are not going to find a 1% rental in one of those neighborhoods. My kids attend a school that has a very diverse population of children, I’m taking the richest to the poorest, it gets a terrible ranking, but my kids are getting a decent education. Those rankings are based on test scores. If there are some kids that aren’t testing high because they are immigrants who don’t speak English as first language, it shouldn’t make much difference, especially for a rental property. Renters would probably have no problem with title one schools, they serve breakfast and lunch for free. They get a bad rap, and it really annoys me.

[James Hamling]

@Benjamin Kanevsky 1% rule is a rather easy mark for me to achieve for my buying clients, in solid markets not some lame-duck fail of a rental. 

Now are they class-A, absolutely not, although it's not terrible either, solid C too B class areas. 

High or low tax's.... honestly that's getting to a point of just searching for reasons NOT to act because it all goes back into the numbers of profitability score, so personally I don't care if tax's are high or low as long as the deal works, that's what matters.

Fact is there is no shortage of good deals and markets out there, for those who know how to find them. It's ok to not know how to find them, it's a specialized skillset, if it's a weakness, well, "hire your weakness". 

[Tyler Jahnke]

Keep looking! The Midwest is scattered with towns that can achieve the 1% rule. Remember, just because the listing price doesn't meet the 1% rule, doesn't mean you can't negotiate it down to hit your criteria. That's what investing is all about!

Best of luck!

-Tyler

[Chris Purcell]

@Benjamin Kanevsky Philly gets over 1%

[Susan Maneck]

It occurred to me that there is one town in Mississippi that my meet your criteria even as far as the schools are concerned. It is a growing bedroom community known as Byram just south of Jackson. The homes are much newer than the ones in Jackson by home prices are still quite reasonable and there are some very nice gated communities. I only have one property in that town but it brings in well over 2%. 

[Stone Jin]

@Benjamin Kanevsky

We buy in the suburbs of Toledo Ohio. Current house I have under contract is 210k pp. no rehab and will list for 2200-2400.

Declining population in the city doesn’t mean declining in the suburbs.

[Danielle Mulvena]

@Chris Purcell

Really? I’ve just begun my journey into real estate investing and I’ve only seen two properties that met the 1% rule, both of which were sold within two days of listing. My realtor, who is also an investor, said the 1% rule doesn’t really apply to Philly. I’ve found it a bit discouraging so far. I’d love to connect with you and talk more if you’re up for it.

[Benjamin Kanevsky]

Originally posted by @Chris Purcell:

@Benjamin Kanevsky Philly gets over 1%

 What are some good zip codes in Philly to look at?

[Michael K Gallagher]

@Benjamin Kanevsky I'll be an Ohio guy on here and echo what @Remington Lyman said, Columbus is a great place to invest, but in my opinion you will need to alter your search strategy to get a good deal here.  Obviously I am not sure where your criteria came from, but, Central OH is basically built inside or outside the 270 loop.  So if you are outside the loop, or in the burbs that are just inside, where the good schools are, you are competing with people trying to find their primary residence, and the market for good school districts is crazy hot here, so SF houses are going for huge premiums and the top rents in the area just don't support that premium of a price.  

So, the good deals in the area, at least I think, are in small multifamily.  The rents support it better, and they are still very affordable and a large portion of the surrounding downtown area comes with 10-15 year 100% tax abatements.

Now if you go as far out as like Zanesville, or Delaware, or Marysville, honestly I don't know enough about those areas to comment, but you might find better deals in those areas that more closely fit your criteria for a SFR.

If you have questions about a specific area let us know, us "Ohio Guys" are always happy to chat.

Or you know...like @Michael P. said, "stay out, no good deals here"!  
  

Cheers, 

Michael

[Reece Iovine]

columbus almost anywhere except A neighborhoods if you're working with a good agent who gets good deals!