How to pick a market for our first rental property?

[Shruti Jain]

We're looking to diversify and start investing in rental properties. So far, I've shortlisted these markets but not sure how to pick one from the below selection:

1. Atlanta 

2. Austin

3. Charlotte

4. Reno/sparks

5. Dallas

Are there any other I should be considering? What are the factors I should keep in mind to make the selection? And, finally Once I identify a market, what should be my approach? Should I look for agents, property investment firms etc.?

Any advice would be greatly appreciated. Thanks! 

[Ali Boone]

I'll try to hit everything specifically and hopefully that helps!

1. Atlanta

I'm from Atlanta and all my investment properties are there...however, I don't currently recommend it as somewhere to buy now. The boom already happened, prices are high, returns are much lower, the market got pretty saturated, and there's just higher returns elsewhere.

2. Austin

No cash flow.

3. Charlotte

Was a good market a few years ago but inventory got skimpy and prices drove up pretty high. Higher cash flow elsewhere for the most part, although you could still find some there.

4. Reno/sparks

No experience there.

5. Dallas

Nearly the same story as Atlanta. Prices there now are higher than they were before the crash. Returns are extremely squeezed and much higher cash flow elsewhere.

Are there any other I should be considering? What are the factors I should keep in mind to make the selection? And, finally Once I identify a market, what should be my approach? Should I look for agents, property investment firms etc.?

Baltimore has the highest cash flow I know of right now, Philly has been big, Indianapolis and Kansas City and Chicago are all still going strong. As far as what to look for in a market, here are some things to consider-

https://www.biggerpockets.com/renewsblog/2014/02/2...

As for your approach, it completely depends on how much effort you want to put in (if any), what your goals are and what your skills are. You can do it in various ways ranging from mostly hands-off to fully-hands on and busy. 

Happy to chat anytime if you want to message!