Hi Friends - @Muhammad Rehan and @Charles Manabat@Charles Manabat@Charles Manabat@Charles Manabat
I'm not a seasoned investor. I'm scouting my first rental property, but in similar shoes as yours in terms of looking outside of my market. For context, I'm based in Atlanta. It's not the most expensive market, but it's also not the one that makes the most sense for my goals and desired investment. One of my goals is cash flow. The framework I defined for myself may not be helpful for you, but I thought I'd share it anyway.
Outside of the kry metrics one needs to evaluate when investigating any market, I also created a list of priorities and nice-to-haves. For example:
1. If I'm investing out of market, I want to be sure the location isn't a pain to get to. I still want to be able to see the property in person before I commit to it. For myself, I decided to look at markets within a 4-hour drive from Atlanta. Again, this will be my first investment, so I want to consider the things that would make me feel more confident.
2. I know a declining population isn't ALWAYS a reason to stray away from a market, but for myself, I decided I didn't want to invest in a market that had population growth lower than 0.
3. Crime was also something I looked at. When looking at violent and property crime rates, I cut out some markets because I felt their crime rates were higher than I was comfortable with. Even if those markets were within my price point and had increasing population growth, they still didn't make the cut if the crime was too high.
4. The regulatory environment is also a key factor for me as a first-time investor.
These guardrails have been helpful so far in my research. I can see these criteria shifting significantly as I become a more seasoned investor, but for now, they're helping me feel less overwhelmed about my decision-making. There may be some criteria that apply to your situation as well. For example - where might you already have an established network? Having the standard analysis is excellent, but having additional criteria that are more personal might also become helpful during this process.