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Hey guys, this is my first post here; thank you to anyone willing to share their input with a newbie investor.
I am a Canadian looking to move to the US for work and start investing in rental properties. My goal is to buy properties that appreciate well and cash flow at least $100/door on year 1.
I can live anywhere as I work remotely but I am getting a bit overwhelmed with all the data (can be found below) I need to consider in picking a location.
Assuming you are in my shoes and have $20k USD to invest (i.e. 5% down as I will be house hacking my first few properties), where would you move to?
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((OPTIONAL READ)) ADDITIONAL INFO
So far in my analysis, I am collecting the following data:
- Net migration (at the state level) over the past 10 years & 1 year
- Median sale price (redfin)
- Value appreciation over the past 5 years and 1 year (redfin)
- Average rent (rentcafe)
- Rent to price ratio
- Income tax
- Job growth and industry trends (haven't found a good source to gather data yet - just reading high-level articles for now)
- Average rent growth (if someone has a good source for this please share as I haven't found one yet)
- Cost of living index (numbeo)
- Quality of life index (though investing is my main priority now, I am still looking at quality of life a bit)
So I recently went through this exercise. I used www.city-data.com to compare median home cost vs median rental amount to find a ratio.
I have had tremendous success with a ratio of 0.614 in a state with LOW property tax. Some cities off the top that were better than that ratio are:
Huntsville, AL Daton, OH Cleveland, OH Lawton, OK (I'll add a few more when I get home and can look at my spreadsheet)
Also, FWIW college towns mean renting to college students. Your chance of having trashed rentals is higher.
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The city/town I currently invest in holds that 0.614 ratio. I feel I have built a good team there and am seeing success. So, hypothetically, a better ratio = better returns for the same investment.
Some more towns:
Clarksville, TN - 0.638
Jackson, TN - 0.621
Bartlett, TN - 0.709
Montgomery, AL - 0.692
Gadsden, AL - 0.769
Bessemer, AL - 0.848
Moore, OK - 0.753
Again, reason I choice these states is low property tax. I have more data on my spreadsheet to compare but the ratios are a quick and easy way to compare.