Evaluating Neighborhoods and Markets for Rental Property

[Beth Haselhorst]

Hi. I am a new investor and I'm trying to develop a checklist for evaluating neighborhoods in the St. Louis market for rental property. I’m looking for something that will focus my efforts so I don’t get bogged down by ALL the properties and ALL the possible measures.

I’m talking to people too, but when sitting at my computer and a property comes up, or my realtor sends me properties, I’d like a quick way to determine if it’s a good market.

Based on a BiggerPockets podcast where the guest gave great tangible suggestions on where he goes to evaluate the market, I’ve found www.bestplaces.net:

On that site, I type in the zip code, and look for these four things:

1. Population is increasing
2. Median home price is over $100,000 (so it makes sense to rent vs. buy)
3. Positive Job Growth
4. Home appreciation is going up. (sometimes I forego this one because MOST areas seem to show a decrease, which I found surprising, but I KNOW there are good areas here).

But I have realtors suggesting areas for good rental property cash flow that don’t meet ANY of those requirements.

My financial goals with rental property is long-term and would like to implement the BRRRR strategy.

Any suggestions on what to look for? Otherwise, I find myself looking at EVERY area and putting numbers for EVERY property into the BiggerPockets calculator and probably wasting a LOT of time.

Thanks for any help!