Areas to aquire a rental properties

[brdsl]

What do you look for in an area, when buying rental properties?

Do you look at good schools? Codes? Just cheap houses? Do you look at the other landlords in the area, and see if the area is saturated with them? If so, does it stop you from investing?

[AgeOfEnlightenmentSCP]

I look for a lot of other landlords. Indicates the presence of prospective tenants.

I then start digging into the economics of the area. I am looking for an "economic anchor tenant" that is stable.

In South Bend, IN, where I own property nearly 70% of the residents rent their dwelling.

The economic anchor is Notre Dame. And it's not just students and faculty- in fact, I have neither as tenants. It's all the ancillary products and services that need to be provided directly or indirectly as a result of Notre Dame. If there's college kids, there's a bar. If there's a bar, there's booze. If there's booze, there's a liquor distributor, and if there's a liquor distributor- there's a guy who drives the delivery truck. If there are faculty there, they drive luxury import automobiles that have to be serviced somewhere. There have to be fine dining establishments, hotels, meeting spaces, and other event facilities for football and basketball games (not the on-campus facilities, but the provisions for all those fans and alumn).

You get the idea. There has to be a reason for the market to exist. In Orlando, it's Walt Disney World, Universal Studios, Sea World, Legoland (coming soon), and other attractions.

The market fundamentals have to be there. An example of what I'm NOT talking about is Detroit, Flint, Gary, and markets like that. I'll take low income, but not NO income.

My company has actually developed a long, thorough, but not that complicated proprietary product you can think of as a prospectus for property. I'm not going to name it, because I'm not about the SPAM. I'm just letting you know this because I sell consulting services to investors which includes fundamental market analysis, and property prospectus (would have just called it that, but someone else owns that domain) for between $3,000 and $5,000 (got $15,000 on a commercial deal last year). It's very comprehensive. It helps sellers sell, and helps buyers buy right.

I only say post all that to let you know I have some credibility in what I'm saying.

[Tiny]

Yeah, you want to look at the economics of an area. That helps you determine how much you can expect to get in rent AND weather or not the property will work for you as a rental.
Other stuff like location, schools, amenities depend on who your target renter is or will be. In my area renters are somewhat transient - I doubt they think about (much less care or worry about) the quality of the schools.

[brdsl]

Paul,

I have been on here a while, I am from the best portion of the state (south) you left for sunny Florida. HA HA.

I know you know what you are talking about.


ATSiaRU,

My area, is rural, with little industry....but for some reason, a couple towns are filled with landlords.

Just wondering if they see something I do not.