To invest in Investor heavy markets or Owner occupied markets

[Kiran R.]

Hi

I have been researching on which markets I should go after for my Buy and Hold Investments. Some of my criteria have been Jobs/Economy/Diverse industries, population growth.

As I narrow down to few cities/markets, I am learning that in some markets/neighborhoods the rentals to owner occupied is more than 50%, which is a strong indicator that its a good market for investors. Memphis, Atlanta, Dallas, Indianapolis, Las Vegas, Cleveland are few examples, where I think there is a large investor activity.

I have a couple of concerns buying in a neighborhood which has more investors than owners.

1. Since there are many rentals available, there will be pressure to lower rents to attract tenants, to keep the low vacancy rates.
2. My second bigger concern is, home prices heavily dependent on when investors(hedge funds/mid sized investment firms) decide to sell of their portfolio in the neoighborhoods, increasing the inventory, and having a downward pressure on the prices

I feel #1 is more likely to occur, and I am sure some of the BP members may have experienced or know some places where that has happened.

But for #2, I am curious to know if its just a stretch of imagination, or is just as likely as #1, and any markets/neighborhoods you have seen in the past

Looking forward to your opinions, thoughts and experiences !!