Investor · Tampa, FL · Member since 2017 · 123 posts · 109 votes
Speaking with my neighbor last night, he shared he and his wife are looking to start investing in single family rentals with roughly $300K in capital saved, and they are split on regions to invest. In this scenario, they would be out of long distance landlords, and only one has had prior real estate investing experience in the past (his wife owned a multifamily college rental in MD with her ex hubby).
The 2 markets she is targeting are Atlanta, GA and Birmingham, AL. He prefers the midwest, targeting Chicago, IL and Indianapolis, IN.
Reasons: She went to college in Atlanta and has friends in Birmingham. He grew up in the suburbs of Chicago and his employer has a presence near Indy.
All things considered, of the four markets being considered for buy and hold single family rentals, which markets would you suggest?
Of the two sets of choices, I think Atlanta and Birmingham are better. Indy is probably fine. I would pass on Chicago - the laws are just too unfriendly.
Of the remaining 3, it comes down to facts, figures, and numbers. Which is best, between Atlanta, Birmingham, and Indy? Which market is weathering Covid well? Which one can they get to fairly easily for due diligence trips?
Considering they're your neighbor in Tampa, Atlanta and Birmingham are going to be much closer to them than Indy, making Indy just slightly less compelling. They're investing from a distance, which is fine, but going there and getting boots on the ground from time to time is still very helpful. Birmingham and Atlanta are a long drive or a very short flight.
I'm with the wife on this one! It would be between Birmingham and Atlanta if I were in their shoes. In deciding between the two I would look toward the numbers. Employment figures, rents over time, occupancy, etc.
Of the two sets of choices, I think Atlanta and Birmingham are better. Indy is probably fine. I would pass on Chicago - the laws are just too unfriendly.
Of the remaining 3, it comes down to facts, figures, and numbers. Which is best, between Atlanta, Birmingham, and Indy? Which market is weathering Covid well? Which one can they get to fairly easily for due diligence trips?
Considering they're your neighbor in Tampa, Atlanta and Birmingham are going to be much closer to them than Indy, making Indy just slightly less compelling. They're investing from a distance, which is fine, but going there and getting boots on the ground from time to time is still very helpful. Birmingham and Atlanta are a long drive or a very short flight.
I'm with the wife on this one! It would be between Birmingham and Atlanta if I were in their shoes. In deciding between the two I would look toward the numbers. Employment figures, rents over time, occupancy, etc.
Of the two sets of choices, I think Atlanta and Birmingham are better. Indy is probably fine. I would pass on Chicago - the laws are just too unfriendly.
Of the remaining 3, it comes down to facts, figures, and numbers. Which is best, between Atlanta, Birmingham, and Indy? Which market is weathering Covid well? Which one can they get to fairly easily for due diligence trips?
Considering they're your neighbor in Tampa, Atlanta and Birmingham are going to be much closer to them than Indy, making Indy just slightly less compelling. They're investing from a distance, which is fine, but going there and getting boots on the ground from time to time is still very helpful. Birmingham and Atlanta are a long drive or a very short flight.
I'm with the wife on this one! It would be between Birmingham and Atlanta if I were in their shoes. In deciding between the two I would look toward the numbers. Employment figures, rents over time, occupancy, etc.
I asked about how many trips could he ideally commit to any market in the first two years of investing, and he believes all of those cities he could fly direct for cheap and be on the ground one weekend a month. He (the hubby) wasn't scared about being far away (Chicago/Indy) as he trusts his family and friend network on the ground more than his wife's idea.
At that price point, Chicago-area real estate would require a lot of day-to-day management. Plus property taxes are huge here. If you're not already here, it doesn't make sense to invest here, honestly.
I would strongly suggest Atlanta or Birmingham or Hunstville. Stay away from the bad areas by following the schools. Good tenants and appreciation follow the decent & good schools. Good luck.
Speaking with my neighbor last night, he shared he and his wife are looking to start investing in single family rentals with roughly $300K in capital saved, and they are split on regions to invest. In this scenario, they would be out of long distance landlords, and only one has had prior real estate investing experience in the past (his wife owned a multifamily college rental in MD with her ex hubby).
The 2 markets she is targeting are Atlanta, GA and Birmingham, AL. He prefers the midwest, targeting Chicago, IL and Indianapolis, IN.
Reasons: She went to college in Atlanta and has friends in Birmingham. He grew up in the suburbs of Chicago and his employer has a presence near Indy.
All things considered, of the four markets being considered for buy and hold single family rentals, which markets would you suggest?
My opinion is based on the size of the markets & submarkets
1. Chicago- 3rd largest MSA; over 100+ submarkets (very diverse)
2. Atlanta- 9th largest MSA; Atlanta proper still growing at a good pace
3. Indianapolis- 34th largest MSA; (We looked at this market for investment but found the rents too low even though the property values were lower)
4. Birmingham- 49th largest MSA (Just not enough diversity for us)
I don't think you can go wrong in any of the markets you've identified. A 3rd party source you could use for your assessment is Roofstock, one of the largest purchasers of single family homes for rental in the country. In their latest top 20 state reports they had Albama #1; which included Birmingham; Georgia 4; which includes Atlanta; Illinois 6; which included Chicago & Indiana 5; which includes Indy.
@Mike Lee without a doubt I would recommend Indianapolis. Atlanta has a strong economy and good population growth but has gotten pricey and doesn't cash flow as well as other markets. Birmingham cash flows well but has a stagnant population. Chicago has high property taxes and is not landlord friendly. Indy on the other hand has a growing population, job growth (pre Covid) a modern/diverse economy and is very affordable. We've been active there for about 10 years and know the market well. Feel free to reach out if you'd like some insight.
@Mike Lee if your neighbor is leaning towards ATL I'll be glad to assist. I am a investor agent that assist with many investors inside state and outside. I have plenty market expertise, reputable, and credible vendors as well as resources as well, Let's Connect!
I live in Indianapolis and would be glad to give you more resources to study this area further. I used to live in Illinois and personally would not invest there because of high property taxes and policies. (Indiana caps property tax at 2% for investors). I do have a personal friend that is doing a booming business in Birmingham, and every time I go to the Atlanta area to visit family, I am amazed at the development.
Basically they have to figure out what works for the numbers and if they want to be close to monitor it personally.
Have them look at the economic development in each area as well for future growth. If his business is in Indy, he should know how diversified and strong the economy is here.
Atlanta still have so much room to grow and the economy is booming, also the Mayor is discussing to pass laws to allow more density in the city plus affordable housing. I am a Realtor and Investor in Atlanta. Feel free to connect me with your neighbors to discuss their goals.
“Atlanta Mayor Keisha Lance Bottoms is promoting an affordable housing plan that would rezone many of the city’s single-family housing neighborhoods to allow for greater density, according to an announcement on Thursday.”