Buying rental property in SMALL TOWNS?

[Tricia Haggard]

Do any investors/landlords buy properties that aren't in high population areas? For example, I recently bought an investment property in a prime area,monthly profit $350.

The benefits of that particular rental are: low vacancy rates and quality tenants.
The drawbacks are: higher priced notes and a lot of competition when buying.

There are many nearby cities that have lower priced homes, and less competition. The cities I am referring to are in safe areas and good school districts, just not as populated.

I would prefer to buy in these areas because I have far less competition and the note I'd carry is much smaller.

I realize the vacancy rate will be higher, but by how much? I would assume you can get just as good of tenants, but I'm not positive about that either.

What's your opinion? Any investors buy in both high and low population areas? What's your experience?

[Ryan B.]

I live in a small town of 2500 people about 30 miles from a larger city of 110,000. I have houses in the larger city all the way down to a house in a town of 200 surrounded by cornfields.

Anytime the house goes for rent in the town of 200 my phone won't stop ringing. Only difference is the rent is not quite as high as in the larger city.

I also have a house in very desirable suburban town of about 15,000 that boarders the larger city. I am able to charge a premium for this house since everyone wants their kids in this school district.

I actually prefer the small towns over larger cities. I can have a handyman put a new roof on for me, permits are a thing that is only required in the city, and background checks are easy (walk down the street and talk to the sheriff). Plus if someone skips out on you, go knock on their momma's door and she will find them right quick.