Seasoned Investors Advice needed - Rental Rankings by City?

Question

Any seasoned real estate investors willing to check out this website and tell me if you think this ranking is pretty accurate or not?? Is it a trustworthy source?

I've been putting together this spreadsheet as I'm analyzing rental markets across the country, and seeing how my local market compares.... I've been picking through endless websites, trying to find up-to-date and accurate information regarding all sorts of categories that might affect a rental market.

I stumbled across this website, and it had a LOT of the information I was trying to find, all in one place. If you read  this page you can see the criteria for how they are coming up with these rankings for each city. Then towards the top is the last report they released which was in Q2 2015  (It doesn't take long to review it.)

http://www.allpropertymanagement.com/rental-rankin...

What do you think??

Mike Makkar · Answer

@Cailyn Aune, I didn't, by any means try to discourage you from using data. In fact, using data puts you into a better advantage than the person who doesn't use it and buys it on a whim. Just make sure not to get into analysis paralysis.

Personally, I wouldn't use PM as the basis to identify the market. Use some of the 1% to 2% rental return fundamental to identify the market. Then figure out the PM pieces. You'd be surprised, you may not even need a PM in a good market, which was your point, right? There was another thread on profitable rental markets, where I answered on identifying good rental regions

https://www.biggerpockets.com/forums/311/topics/27...

But being in Washington, have you exhausted your own townships? I hear you can still find good deals in areas like Olympia and surroundings, i.e. sub-100k properties renting for 1250+ per month. I'm sure you or I personally wouldn't want to live there, but somebody who can't find a place would be happy to rent it for 1250 a month.

btw, all of my properties are under 125k. My wife hates 'em! But she doesn't complain about the 12 to 15% return, :)

Mike Makkar · Answer

@Cailyn AuneI've seen reports like these but these are almost non-actionable. Most people know that Dallas and Austin are good markets. But the trick is in the details. Within Austin and Dallas, there are good markets and bad markets; by zip codes, by neighborhoods etc.

But it definitely gives you a starting point and look at possible areas to look at. From my experience, a good rental market neighborhood exists for 3-4 months. After that, every investor is on it and it gets saturated. The, pitfalls of internet based information exchange, high liquid MLS systems and everybody's mother-in-law acting as the local wholesaler! As markets becomes efficient, the easy buck becomes a tad less easier.

Cailyn Aune · Answer

@David Thompson- Thanks Dave! I agree.... might as well start with the better information, right? :)

@Mike Makkar- That is part of what I'm trying to evaluate. I do want to see how my own "backyard" compares to the rest of the country. I am definitely new to all of this, so I'm not certain I couldn't find great deals close to home. In some respects, I know just as much about Olympia, as I do Cleveland. :o) So unless it is literally, Tacoma.... it all feels very unknown. But I do know that if I do choose to go out of state, I better known darn well why I'm not investing in Tacoma.Another piece of this... is that all the homes I"m finding locally that fit the numbers to produce cashflow (and there aren't many really, inventory is somewhat low), all need some work, or some substantial work. My husband and I have no experience with this- with already running our own business, would it make more sense to go turnkey and save the TIME of managing contractors and fixing homes that you know nothing about??? Maybe I am just still not sure how to go about this. :o) THAT is very possible, and I'm not afraid to say it out loud. :o)Thanks for the link to that thread - I'm going to check it out.

David Thompson · Answer

I flagged it for future reference and appreciate you sharing.   It's helpful for someone looking nationwide like yourself and wanting some high level info to get started with.

Cailyn Aune · Answer

@Mike Makkar- That totally makes sense- and I appreciate your perspective!  Obviously, this is a lot of general information for sure... even I knew Dallas and Austin were good markets... ha ha. :o) I'm just trying to sort through some big picture pieces... before selecting a few general markets to get specific on. I agree... I know exactly what streets I would and wouldn't buy on in my city, almost completely... so yes- I know what you mean... getting down to the zip codes is a game changer. However, if I was to buy out of state... would it make more sense to at least be able to weed out a few markets and go to markets that have in general, better vacancy rates, more demand, appear to have stronger job growth, and potentially more favorable taxes, or even states that are more favorable to landlords....?? Does that make sense? I know a lot of people say that a good PM in a ok market is a lot better than a poor PM in a good market.... Well, what if you could have both?? I guess that's what I'm trying to figure out.Is this a helpful tool to at least try to avoid the lesser markets....?Okay... I would love any and all thoughts! Thanks!

Seasoned Investors Advice needed - Rental Rankings by City?

Most Popular Reply