CNN article on 10 best cities to buy a rental property.

jane,

depending on where you are in Texas the property tax’s can be much higher than almost anywhere else in the country and by much higher I mean 2 to 3 times other areas with same purchase prices and rents. .

Like any of the investments you will have proponants of one area and others who like something else for other reasons.

The discussion we ( US based investors) have been having about a market like Texas as compared to others is this.

Texas properties as a whole did not crash like most of the other hot beds of investing today say like Atlanta. However depening on the value of what you buy you will always have the builders there that can and do build new product in the low 100’s that will compete with standing inventory. And especially a home that has been a rental for any number of years.

So with average prices much higher in Texas and rents pretty much uniform accross the country is it better to invest in a market that has properties that were selling 05 for 175k that can be bought for 75k with the hopes a small move to 100 to 110k will give you a nice equity return.

Or is it better to go to Texas where the market has not moved per se’ and the only hope of equity gain is to make new Highs in the value of the real estate as oppossed to other areas where profits will come with just a bounce back to a % of the highs.

I have one client who invested with us that had 30 houses in Texas and sold them all his comment was the vacancies and tax’s just ate him up.

I will be in Dallas tomorrow,,,,,

JLH

Alex what is a Turkey house?? ))) just could not resist.

answer to your question though

this is my 3rd recession depression that I have been fully involved in the real estate industry, and each had their own issues,

back in the early 80’s it was sky high interest rates.

89 to 95 was the first gulf war and for us Bay Area folks it was the Loma Preita earth Quake, The chinese investors went totally off the feed.

911 was a little 10 month blip I actually made some killer deals in that little down turn,

This 08 is by far the worse and of course its world wide. The amount of bogus financing products that allowed the entire nation to run up values was just not sustainable. Now you have over correction in a lot of markets.

Market recoveries are going to be regional in my mind and of course there are markets that did not crash, like the SF Pennisula where average prices are still 1 mil or so. And parts of Texas as we talked about and other various markets.

Then you have the upper rust belt cities like Detroit will it ever come back, its doubtful There is just a terminal over supply of inventory.

Employment is a key factor of course along with over supply issues. I see atlanta as an over supply as well as florida AZ NV central valley of CA. I really do not know anything about N or S. Carolina other than the few loans we did for you guys..

I personally think our US markets at least on the west coast and in the sustainable markets run in 10 year cycles and we are about 5 years through it. However with what has happened in the financial markets have set us back 20 or 30 years. Its any ones guess if the Mortgage products that allow far greater % of home ownership than today will ever come back, and if they don’t we will change our demographics to far more of a renter society especially in the minority markets where credit is a far bigger issue….

This is why my thoughts are more keen on markets that crashed and just a little bounce back creates some equity growth and not counting on straight appreciation to create the profits like a Texas market or for that matter were I live in Oregon and Certainly the high priced areas of CA>

those are my thoughts.

Jayhinrichs, this is interesting to know. The reason why I like Texas is due to my father's US office been there and free accom and access to his company accountants and his legal team. However at the end of the day we want a good return and if that means we have to have a larger outlay for better long term returns maybe we need to consider buying else where. Atlanta was definetly high on the list. Would you say rental demand is high in Atlanta? Also if you have properties there, can you recommend any areas worth looking into?

JLH, thanks for your info. I was wanting to buy in Texas due to my father's US office being situated in Fort Worth. We would have access to his legal and accounting team and also free accom whilst we are there which would be good. However after reading these comments and a few more websites I do believe the Texas-market is flat and there is no hope for Capital Gains. Atlanta has been in the back of our minds for a while and we see it as a good investment opportunity. Do you have houses in Atlanta? If so can you recommend any good school areas and safe areas for family's?

Alex I have looked at florida with interest, from Ft Meyers and the literally 1 million lots of record there, ( do not get me started on the history of this area its already well documented here suffice it to say I was on a state of CA Steering committee in 1984 and the poster child for rampant lot development with in adequate infrastructure was Lehigh Acres and Coral gables I spent a week their with the local planning directors CA. has millions of these types of lots as well the guy posting the land Site Stu thats what he does buys these vacant lots at tax sales for next to nothing then sells them on contract its what I was raised in my dad did this for 25 years from 1960 to 1985 I digress) to Orlando and lastly Miami Dade,

Insurance is an issue, however I really at this time do not have a good enough handle on rental absorption to comment. I know Jay McBee of course I did a bunch of loans to their clients maybe even a few of yours. They have a radio show in San Diego and are Remax agents. Can’t remember his partners name however I know they work as a team selling turn key properties to SoCal investors.