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Old 04-27-2013, 05:28 PM
 
Location: Pure Michigan!
4,348 posts, read 7,427,733 times
Reputation: 6785

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We are currently in the process of liquidating our rental property assets in a mid-sized city that has been hit extremely hard by the recession and bleeding of manufacturing jobs overseas. The result for us is ever increasing expenses, decreasing property value, and scarcity of good tenants with decent jobs who can pay a fair market rent. NOT worth it anymore!

OTOH, this is the only business outside of our regular jobs that we have ever known, so we are now considering our options and thinking about reinvesting our money in rental properties somewhere that:

1.) Still has decent paying jobs, not necessarily in abundance but enough that everyone is not on unemployment, welfare, or SSI.

2.) People really want to be, therefore providing a large pool of potential tenants to choose from.

3.) Property values are not still free falling. I realize that there is probably not a city in America that was not negatively affected by the recession and housing crash, but in this area, values are still falling. Is there anywhere that they are starting to rebound?

We are open to just about anywhere east of the Mississippi or possibly Texas. And please, NO PMs from people wanting to sell their property, realtors, etc., etc. We just want ideas of places where the rental business would be worth it again. We are not slumlords and take great care to maintain our property, so we are not interested in ghetto type property where you can pick up a house for $8,000, even if the profit margin would be great. We just want to provide good, fair priced housing to GOOD people who can afford to pay the rent.

Thanks!
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Old 04-27-2013, 05:33 PM
 
Location: City of Angels
2,935 posts, read 4,768,423 times
Reputation: 2236
*shrug* i was going to suggest being a slumlord since the profit margin is so high, but since you don't want that, i'd just look at boring places in middle america with low median home values. they usually have the best roi
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Old 04-28-2013, 03:29 AM
 
56,655 posts, read 80,952,685 times
Reputation: 12521
Perhaps college towns or places with a major college area where you have a consistent demand for rentals.
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Old 04-28-2013, 06:19 AM
 
21,197 posts, read 30,388,339 times
Reputation: 19627
I would look to emerging neighborhoods where young professionals/creative types want to live and where investment in improvements is well underway. Off the top of my head I would recommend Atlanta (East Atlanta), Nashville (East Nashville), Durham (Northgate Park or Colonial Village) or Columbia SC (Cottontown, Earlewood, Melrose Heights)
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Old 04-28-2013, 09:45 AM
 
Location: Southwest Nebraska
1,297 posts, read 4,144,820 times
Reputation: 896
Nebraska has low unemployment and a shortage of rentals. So does south and north Dakota because of oil boom. We, wife and I, have a couple rentals that we spent more money than needed and rent out to people that need a decent place to stay without paying thru the nose. You can get inexpensive houses in NE and with a little fix up make a decent return but also provide a decent place to live.

We rented to HUD for a while cause people were sleeping in cars due to lack of low income housing. But!!!! The low income renters abused there rules and moved in extra room mates and did drugs, so we don't rent to Hud anymore but make it as easy as possible for anyone struggling. I have been there and know what it is like. Our house was sold to us in upper 30's and trailer with land was less than 10,000.00 but we put another 15,000 into it to make it nice.
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Old 04-28-2013, 12:53 PM
 
Location: North Idaho
22,706 posts, read 28,744,369 times
Reputation: 43792
You missed the Dakotas, but probably any place with newly discovered oil or gas fields.

Internet buddies in Texas seem to get good rents in proportion to the original purchase price. But property taxes are really high.

Other than that, slumlording and Section 8 are the best way to get a high return.

In my area, rent pays expenses and profit only comes when selling. Prices are going back up and supply is limited (both houses for sale and houses for rent), so it is probably a good area to buy right now and hope to ride the prices back up. Price drop here was heart stopping, so there are some really good bargains that are being snapped up by investors before prices reach a more natural level.
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Old 04-28-2013, 02:54 PM
 
Location: Pure Michigan!
4,348 posts, read 7,427,733 times
Reputation: 6785
Thanks so much for the helpful replies.

I have heard that the Dakotas are booming right now, and I had never thought about Nebraska, but honestly, I think that those areas are a bit too far west for us, although I appreciate the ideas.

We currently live 25 minutes from a very vibrant, popular, college town that is home to one of the "public Ivy League" schools and draws people from all over the world. The problem with this area is that prices just seem way too high for the quality and condition of the properties, property taxes are exorbitant there, and college kids are notorious for tearing up rental property. Also, it would be somewhat seasonal. Rents are high, but I'm not sure if we want to deal with all of the hassles of renting to college kids after being in this business for over 25 years now.

Thanks again for the ideas, and please feel free to keep them coming!
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Old 04-30-2013, 09:47 AM
 
Location: Philadelphia, PA
176 posts, read 298,541 times
Reputation: 64
Seattle! The real estate market looks like it can only grow from where it's at now.
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Old 04-30-2013, 10:03 AM
 
Location: Denver
14,151 posts, read 19,771,019 times
Reputation: 8804
Anywhere in the French Quarter, Marigny, Bywater, Warehouse District, or Uptown near Tulane and Loyola Universities neighborhoods of New Orleans. All of these areas are a sure bet.
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Old 04-30-2013, 02:11 PM
 
Location: Philadelphia, PA
8,702 posts, read 11,936,340 times
Reputation: 3574
Center City Philadelphia and the surrounding area is on fire right now.

Rents are rising. Vacancy is below 2%. Bidding wars. There is a lot of desire to get into the Center City market right now.
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