Buying Rental Property In Smaller Towns

Comments(8)

• 
  davmille25th February, 2004

  I don't know of any problems. It's just a little different. You obviously will have fewer choices of PMs and real estate agents. I only invest in small to medium sized cities so I don't know how it compares to NY.

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  ronjung25th February, 2004

  The tenants tend to stay longer. The rents seem to cover costs easier. Depending on the size of the town, it may be harder to find a renter or buyer and it might not appreciate as well as city/suburban property.
  
  Ron

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  tytitan1st March, 2004

  I plan to invest in small towns...my hometown is just that. If you can develop a good rep. with the people word of mouth is a good thing...plus it helps when you've lived there pretty much all your life (minus the college years)...they trust the family name if it's in goodstanding with the community.
  
  Best wishes mate.
  [addsig]

• 
  active_re_investor1st March, 2004

  Quote:
  On 2004-02-25 18:33, stapler wrote:
  Is it a mistake to buy rental property in smaller towns (i.e. towns with less than 50K people)? What size town would you recommend? Are there a minimum number of people a town has to have in order for you to invest in it?
  
  
  Small towns are not an issue. The most expensive community in Oregon (based on average sale price) is a community of less than 40K people. It happens to be next to the largest city in the state.
  
  I think you need to consider the numbers and the demographics. Average income, employment situation, commute options to other locations where people can find work (roads, possible mass transit)
  
  It really will come down to the deal. If you make a good purchase you can always decide later if it is a long-term hold or something you will sell sooner.
  
  If you get good coverage (incomes vs all expenses) then it matters less. If you get appreciation and largely pull out the initial equity (down payment) while still getting good coverage, you really should not care.
  
  One other way to test the market is to speak with the property managers that work in the area. Do you invest there? What can they tell you about their clients, the bet type of units to buy, the likely tenants based on location.
  
  Small is not really a factor.
  
  John

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  sKauGhTiEe1st March, 2004

  Small should never be a factor. I think a big one is lookin at the employment Industry, and get a good feel for it. Also, is there any type of community college? But I think the guys summed it all up for ya. Take over the rental market there. Control the rent... That would be much easier in a smaller town. Pretty Fun as Well.

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  maw1st March, 2004

  As with cities small towns need rental properties as well. There are many people who prefer to live in towns vs cities and cannot buy a house.

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  InActive_Account6th March, 2004

  I own rentals in a town of 3500. Not an issue

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  HouseHuntersUSA6th March, 2004

  As long as there is a housing demand I wouldn't worry about it. I'd be hesitant to invest in a town where there is one main employer or industy. The employer might be there today, but who knows what the future holds. I've seen too many small towns practically disappear after a factory closes down.
  
  Best of luck with your real estate investing.