Rural Real Estate Investing (Iowa)

[Kyle Schwery]

Hello. I am a current resident in a small town in Iowa and I am on the fence about buying a house. My area is an area with a low population and a flat to slightly downward population growth trend over the last 10 years. I am looking for a house to buy under market value, move in to for a year or so, fix up, rent, and refinance. I am curious if anyone has experience in smaller towns or situations like mine. I have a family and a business in so it would be hard for me to move and I know the area because I have lived here for 20 years and I grew up here. I always see people say that population growth is a key factor when deciding to invest in a property, but that is something I don't have the privilege of. 

Here is a snapshot of some statistics for my area form datausa.io. 

What is some advice you would share for someone like me? Thanks.

[Matt Hein]

Your strategy has equity and cashflow benefits. You could validate the equity benefit by looking at what people are buying now -- people are voting with (a lot of) dollars on the type of home they want. You can then find a good-bones home to fix-up and build equity. The next layer would be cashflow in the future. Again, what are people renting now? Assume they're likely going to look for something similar in the future. That gives you the future metrics to build towards. Go ahead and play out a worst-case scenario and see if you break even after 5-years.

The life experience gained from this would be worth ~$10,000 in my estimation. (Just compare it to a year of college) So I'd think anything above a negative $10k return is 'profit'!

Godspeed!