Summary: In this article you will learn about three RealWealth Markets that are not only attracting big companies, but posed to experience an expansion within the rental market. Read on to discover why you should pay attention to these three markets, and how they could impact your real estate investment strategy.
Did you know that the best places to buy high cash flow rental properties often coincide with three key factors? These factors are affordability, population growth, and job growth. When and if you can find a market with the latter three factors, then the chances are incredibly high that you will find a great residential investment opportunity. The good news is that these three factors, can be found in three locations throughout the United States: Huntsville, Detroit, and Atlanta. Capitalizing on these markets will require you to complete a bit of due diligence, so that you can determine which of the three (or perhaps all three) of the markets is right for your financial needs and goals.
Understanding The Huntsville Real Estate Market
Huntsville, Alabama might not be the first city that comes to mind as a strong real estate investment opportunity; however, all of that is about to change. The reason is simple: Huntsville has recently gained popularity with both businesses and government agencies. In fact, the FBI is constructing a 200 acre campus that will bring an anticipated 5,000 private sector and federal jobs to Huntsville. In addition to the new FBI campus, both Mazda and Toyota recently announced that they will be breaking ground in 2091 on a $1.6 billion plant. This plant will take approximately two years to build, will bring in thousands of jobs during its construction, and will employ 4,000 workers upon opening.
The increase in businesses and government agencies, has created a strong local economy in Huntsville and increased the local population. The good news is that 38 percent of the growing population identify as renters. For the savvy real estate investor, this means that purchasing turnkey properties with a buy and hold strategy can be quite lucrative. Currently these types of properties can be purchased for less than $100,000 and rented out for approximately one percent of the purchase price month over month. The moral of the story for this area is simple, as the population continues to increase, as more businesses arrive, and as the local economy continues to flourish, the rental real estate market will continue to grow, making it the ideal choice for many real estate investors.
Understanding The Detroit Real Estate Investment Market
When people think of Detroit, they don’t always think of a strong real estate or economic market; however, the horizon is bright for this growing city. In fact, while national economy has improved in the last few years, Detroit’s local economy has flourished. Over the past five years, the unemployment rate for the city (and its surrounding suburbs), has been cut in half from 18 percent to an impressive 9 percent. While this percentage is still higher than the national average, the city shows no signs of stopping when it comes to its growing economy.
For further proof that the Detroit job market is improving, just take a look at the number of large, private and publicly traded, companies that are creating offices and expanding into the industrial space near the Detroit airport. These companies include: Penske Logistics, Amazon, and LinkedIn. In addition to the newcomers, Ford (a long time commercial presence in Detroit) recently announced that it will be creating a new campus for up to 2,500 employees, as well as room for an additional 2,500 employees from its partner companies, subsidiaries, and other businesses. The highly anticipated airfield projected is set to create an additional 2,300 jobs, while simultaneously offering the opportunity for additional jobs after its construction is complete.
In addition to these companies joining the Detroit economic market, the city has placed an emphasis on the entrepreneurial spirit. In a society that prizes its entrepreneurs, many millennials are moving to Detroit in an effort to follow their dreams. Additionally, groups like Built in Detroit are helping small businesses expand into international markets. The latter win-win scenario has created an increase in the local real estate market.
Currently there are numerous income properties that have all of the makings for great buy and hold investment opportunities. Typically, these properties can be found for less than $100,000 (although they do require a bit of work to make them ready for higher paying tenants). The good news is that savvy real estate investors are able to purchase REAL Income Properties™ in Detroit, complete with interior and exterior upgrades, and rent them out for an estimated median of 1.29 percent of the purchase price month over month. The moral of the story for Detroit is simple, as more companies flock to the city, as jobs increase, and as the population grows, the real estate market will continue to improve, while simultaneously offering the basis needed for investors to capitalize on buy and hold strategies for residential properties throughout the local area.
Understanding The Atlanta Real Estate Investment Market
Atlanta has always been a thriving city. However, after the recession of 2008, the city has now seen an even larger push within its population, economy, and real estate market. In fact, a recent Forbes study found that the city is anticipating growing by 4.9 percent over the next three years. In addition, the job market is anticipating a 5.1 percent growth, while homes are anticipated to increase in value by 8 percent after the first year and by 24 percent within three years of purchase. In short, all signs point to a real estate investor’s dream.
In addition to a thriving job market and an increase in population, the local Atlanta area is continuing to attract Fortune 1000 companies. In fact, Delta Air Lines, Coca-Cola, UPS, Pandora, Instacart, and CallRail are already calling the city home. The latter technology companies are anticipating creating more than 1,000 jobs over in the near future. Additionally, Delta Dental and Anthem are planning on adding more than 2,500 jobs. The increase in jobs aligns with an increase in people moving from out of state, which subsequently aligns with the renter demographic.
As more renters flock to Atlanta, real estate investors should look towards investing in properties with a buy and hold investment strategy. These properties can typically be purchased for around $127,000 (depending on their location and state), and usually be rented for approximately one percent of the purchase price month over month. The anticipated cash flow from these properties, coupled with the predicted appreciation levels, makes Atlanta a strong market for residential real estate investments.
In conclusion, Detroit, Atlanta, and Huntsville are three cities that are not only attracting big companies, but are also experiencing strong local economies and accelerated job markets. These three factors, coupled with good (i.e. affordable) real estate markets, have created the perfect environment for investors to buy turnkey properties using a buy and hold strategy. Through this strategy, real estate investors can purchase properties with good cash flow values, while simultaneously expanding, diversifying, and reducing risk within their investment portfolio. Schedule a Strategy Session to learn more about purchasing investment property in these markets.