The fundamental question to ask when inquiring about investment residential real estate in order to start off on the right foot is:”Where are the Hottest Real Estate Markets?”

This is a simple case of economics 101. Let’s take Detroit, MI for an example.

The local economy has been devastated, the unemployment rate is nearly 18%, and the city is in bankruptcy.

But what about the thousands of homes that are vacant just waiting for somebody, anybody, to buy them for pennies on the dollar from the banks who need to offload this huge drag from their balance sheets? If I can get them for so little isn’t that a good investment?

I mean I could actually buy a single family home for a 1$ per square foot!! That is a crazy good deal right? Wrong.

Let’s walk through this step by step but do it quickly so we can get to the hottest real estate markets in the good O’l USA!

Back to econ 101:

1. The city is in bankruptcy. Have you ever heard of someone looking for a good paying job or career at a bankrupt corporation? Me neither and this is the case in Detroit as well. Whole neighborhoods have picked up and abandoned their homes in search of greener pastures. In this instance the cliche “the grass is greener on the other side” is true.
2. If people cannot find good jobs in this area, are your potential tenants going to be able to pay you rent? Not a chance.
3. If you could buy an island that was completely inaccessible, dangerous, and uninhabitable for a couple thousand bucks; would that make a good financial sense? If you wanted to brag to people you owned an island then maybe that would be worth it to you, but it doesn’t help your bottom line now does it.

Hopefully you get the picture that just because property is cheap does not always mean it’s a good investment.

Remember the mantra you always hear from real estate agents? “Location, location, location!!!”

Don’t get me wrong there are places within the Detroit area that make for a good investment similarly there are places within great markets that are not so good either; I just wanted to draw a contrast.

Now this little bit of wisdom applies to a location within a neighborhood, city suburb, region, state, country, and ultimately the globe upon which we live.

Luckily for you and I, real estate markets are as ubiquitous as people and just as unique.

This means that we can assess ANY market ANYWHERE to see if it would support our investment goals.

So what are we looking for when assessing a real estate market?

To start this off simply, let’s find the opposite of Detroit!

With that said we need a city with a thriving job market, current and projected population and economic growth, businesses moving in, good school systems, low crime rates etc….

Last, but not least, we want to keep our eye on the residential real estate market.

What are the homes selling for? What is the average rent for the type of home you are interested in? What are the prices of these homes? How many are available and who is selling them?

What is the rental market like? Are tenants long-term or short-term? What about property management companies?

Do they have a good reputation if you plan on buying outside of your area? Blah blah blah blah…… I could go on and on!

Below are some great markets to invest in.

These are not in any particular order but the inventory in the first two are dwindling.

1. Phoenix, Arizona – Equity Growth market
2. Atlanta, Georgia – Cash Flow & Equity Growth market
3. Memphis, Tennessee – Cash Flow market
4. Orlando, Florida – some Cash Flow but mainly Equity market
5. Indianapolis, Indiana – Cash Flow market
6. Your Own Backyard! – It depends, could be both!

Maybe you are fairly new to single family or residential real estate investing and are not sure what exactly the difference is between a Cash Flow market and an Equity Growth market. No worries, you can learn more about it here.

There you have it folks!  Currently, these areas, and oftentimes their surrounding suburbs, are excellent places to put your hard earned cash to capitalize on.

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Hottest Real Estate Markets – Are All Around You By Joe Nielsen