Quote from @Christina Greaves:
Thank you both!
Im already house hacking :) and me and my partner already own 2 investment properties, both SFH with long term renters. But these were not necessarily "intentional" purchases for RE investing, we just each owned a home before we met and decided to move in together buying a separate house in a new town where we moved due to proximity to my partner's work location.
So now for the first time I'm looking to make an intentional decision on which neighbors/strategy to hone in on. I just know that to start I'd rather stay local, but I'm still defining whether to stick to LTR versus venturing on STR for example. Hence my questions.
I’m really looking for more detailed beta from other investors that know the area well and differences between how investors think about neighborhoods depending on their investing strategy..
It's great to hear that you're already making strides in your real estate journey with house hacking and two investment properties, even if they weren't initially planned as such. Transitioning from accidental to intentional investing is a significant step, and it sounds like you're eager to make informed decisions. Here are some considerations and insights that might help you refine your strategy:
Understanding Local Dynamics:
Since you prefer to start by staying local, it's an excellent idea to leverage your existing knowledge of the area. Consider factors like job growth, schools, amenities, and neighborhood trends to identify areas with strong investment potential.
Long-Term vs. Short-Term Rentals:
The choice between long-term rentals (LTR) and short-term rentals (STR) depends on your goals and the local market. LTR typically offer stability and steady income, while STR can yield higher returns but may require more active management. Assess your tolerance for hands-on involvement and your financial objectives.
Market Research and Analysis:
Dive deep into market research for your local area. Explore rent-to-price ratios, vacancy rates, and historical appreciation. These metrics can guide your decision on which neighborhoods align best with your chosen strategy.
Property Type:
Consider the type of properties that dominate your local market. Are single-family homes (SFH) more prevalent, or is there a demand for multi-family units or other property types? This can impact your investment choices.
Neighborhood Demographics:
Pay attention to the demographics of potential tenants or guests. Are there specific demographic groups that are more likely to rent in your area? Understanding your target market can inform your property selection.
Risk Assessment:
Evaluate the risks associated with your chosen strategy. LTR and STR have different risk profiles. For instance, STR can be more susceptible to seasonality and regulatory changes, while LTR offers more stability but might have longer-term tenant commitments.
Networking and Learning:
Connect with local investors who have experience in both LTR and STR. Their insights can provide valuable "beta" on the nuances of your specific market and how different strategies play out in the area.
Exit Strategy:
Consider your long-term goals. How do your investment choices align with your exit strategy? Whether you plan to hold properties indefinitely or sell them down the line, your strategy should support your ultimate objectives.
Remember, there's no one-size-fits-all approach in real estate investing. Your strategy should reflect your personal goals, risk tolerance, and local market conditions. Continuously educate yourself, network with local investors, and gather data to make well-informed decisions. With the right approach and a strong foundation, you're on your way to successful intentional real estate investing. Feel free to share more details about your local market, and we can discuss specific neighborhoods and strategies further!
