Finding markets for rentals

[Patryk Prokopiuk]

My local market is extremely volatile right now. Almost everyone here is an investor. Additionally it’s the most expensive county on the east coast.

I am a first time home buyer who wants to invest in a home to rent but I am unsure how to locate markets outside my local one that would yield the best returns. Is there a website or strategy to find such markets?

[Michael Trimble]

Hi Patryk, I will explain they way I am looking at locations right now, but full disclosure, I am similar to you in that I have not purchased a rental yet.

As far as locating a market to invest, i feel that google is a powerful tool to start with. There are plenty of lists that boast “the top 10 cities for rental real estate” or something of that nature. A few I’ve seen in recent years are Austin TX, Colorado Springs CO, Indianapolis IN just to name a few. If you just pick one or two that you think might be a fit (not real science behind it there just trusting what you find) get to know the city a little. Call several local real estate agents or lenders, read articles from local news outlets on where and why the city is growing or how it is developing, find out if any large company is moving HQ  or building a large factory in the area, etc... Any one piece of information may not tell all, but understanding the aggregate trends can help you find areas that show promise.If you don’t like what you see or what you are told, pick a different city, rinse and repeat. 

If you or anyone else have different opinions on this or criticisms on this, I welcome the feedback.