Demographic information for out of town buy and hold?

[Chris D.]

Hi All:

I am interested in buy and hold but live in an expensive area (Washington, DC metro). I will start with SFR and (hopefully) with the excellent educational resources offered by BP…move on to small multi family properties. The one percent rule cannot be found in my local area! We tend to have reliable appreciation here in DC but our current prices are approaching the pre 2008 bubble range. Purchasing in my local market concerns me as we keep hearing interest rates will tick up soon. The rental ratio relative to sales price is often less than .50% here (i.e. 500K sales price…$2,500 monthly rental price) . According to local MLS, our vacancy rates have risen slightly in the past year. Local realtors keep touting our historic appreciation but I am not convinced!

I have been investigating buying out of town. What demographic information and what sources for demographic info. should out of town investors use when considering what areas you would like to invest in? Also, what criteria do you use?

I had been considering investing in Richmond, VA. I recently read an article where 43% of purchasers in 2013 were absentee owners and almost 50% where cash buyers. A follow up indicates that Richmond vacancy rates are higher than my market here. I am wondering what is happening to vacancy rates in cities like Las Vegas where the hedge funds crushed it with property purchases?

Should I be considering percentage of absentee owners, days on market, vacancy rates, employment information, age demographics etc? What sources are out there to find this information? I do have a real estate license and can log into Realtors Property Resource. They have a commercial site but I haven't investigated the demographic info. How does one go about figuring out which areas/neighborhoods are the up and coming "in transition" Has anyone used the CCIM info. to look at commercial/employment demographic trends in neighborhoods and am I completely overthinking this?  I'd like to strike a good balance between cash flow and potential appreciation. 

Last thought…listen to the BP podcasts…they are full of useful info! Thanks Bigger Pockets! I love you!

Thanks in advance for any help/feedback! I have been sitting on the fence for far too long!