What do you look for in a city?

[Zach Davis]

I think most of us know the rules of thumb for running the numbers on the individual properties we're considering buying, but I'd like to know what everyone looks for in a potential investment city. I think we've all come across that "phenomenal deal" in a town with a declining population of 300. Is that a deal you would move on and if not what kind of city/county/zip stats do you want to see before buying? What kind of population do you look for? Do you look at population trends, unemployment rates, median income, or percentage of renters in that market? If you do look into those types of things what sites or services do you use to find that info? I'd love to see what everyone looks for and how it differs across the country.

[Kim Handelman]

Hi Zach,

I was in your boat a few months back and wrote a post. Joe Fairless gave me the following 10 things to look for in a market (Thanks Joe). It was great advice. I now have my market and am moving forward. 

1. Unemployment rate less than national average (search "city name" + "unemployment rate" in Google)

2. Population more than 250k or more in MSA (metropolitan statistical area_ - go to census.gov for a list of MSAs

3. Diverse job industry - go to Wikipedia page for city, chamber of commerce

4. Recreational activities for families (ex. Six Flags)

5. Affordable cost of living - bestplaces.net is a good resource for this

6. Landlord friendly laws - ask a property mgmt company how long does it take to kick a resident out if they don't pay

7. Natural resources close by that generate income for market - Google search, local newspapers, Wikipedia page

8. Thriving or emerging downtown - Google search

9. Trusted and experienced team members - this is muy importante

10. Favorable absorption and rent trends - Google search, broker conversations, property mgmt

Most important thing is job growth and projections. People need a job to pay rent.

GOOD LUCK!