"2% rule" cities? Or should they be called, "Cities that Americans are Ditching?"

[Scott Trench]

Came across this article today and thought it might make for a good discussion:

These are the Top 20 Cities Americans are Ditching

I think it’s funny that some of the cities that many investors suggest as good places to look for 2% rule properties (like Milwaukee, WI and Memphis, TN) are ranked on this list - this data certainly doesn't bode well for long-term rent growth or appreciation prospects on cash-flow properties! I think that this gives me pause give pause as I was previously looking to invest out of state in the larger cities that merely had the best price to rent ratios.

That said - the article does point out that some of these cities ARE gaining in population, due to things like immigration. But even with that caveat, I look at this and I see that Americans just don't want to live in certain places and are moving out in pretty large numbers. I wouldn't want to put my own money in a place that ranks highly for that metric, unless someone could convince me that some plan is place to change that.

Economic growth and the long-term prospects of my target market are definitely a huge part of my decision making process as I’m looking to pick a market for my first out-of-area real estate investment.

Anybody have any thoughts on how to choose a great market to invest in? 

[Matt R.]

@Scott Trench Understood. The most experienced investors would say don't even think about it. Sure if you are local to that market then you could navigate it or partner up like Mehran K. does. Otherwise you are falling for the newbie cash flow trap. There is a reason many of those areas have vacant lots and boarded up homes. If locals could not make it work I doubt anyone from 1000 miles away will either. I understand you are looking for something in between. I am afraid you will end up with something less.  At your young investment age that makes little investment sense. If you need cash flow get a job or buy/start a business. If you want a real estate investment buy on long term fundamentals. That will win out 9 times out of 10 in the long run.