Investing in SW Michigan vs NW Indiana

[Scott Williams]

Good morning all! Looking for thoughts on holding SFH rentals in SW MI vs NW IN. MI seems to have higher property tax and less landlord friendly laws, is property insurance higher as well? Are there other factors that even out the markets? Have been looking at MLS in several markets trying to figure out where cashflow is better in general; living in SW MI but can look at properties within 3-4 hours pretty easily, and will not be self managing so properties within easy driving distance are all good.

Thanks!

[Greg Scott]

Scott:

I have property in both states and, honestly, the differences between them are not enough to make me say I have to be in one state vs the other.  

I would say it is far more important to understand the metrics of the submarket.  Is the city growing or shrinking?  Does the metro have diverse employment or does it largely rely on one industry?    Those factors will influence your success more than the larger state level.  Based on the city metrics, I would choose Grand Rapids over Kokomo, but I'd also choose Indianapolis over Kalamazoo.

Next, you have to look at the specifics of the deal itself.  Are you able to buy well under market?   Are you in a war zone or a nice working-class neighborhood?  If you can find a smoking hot deal, it will overcome many of the external factors, particularly if your holding window is relatively short.

A final thought -- if you are going to hire a propety manager, why constrain yourself to a 3-4 hour drive?