Are the “Best Places to Live” in the US Worth Investing In?

Kathy:Hiya and welcome to the On the Market Podcast. I’m certainly one of your hosts, Kathy Fettke, and I’m joined at present by Henry Washington and James Dainard.

James:I’m excited for this episode to be popping out on Christmas as a result of who doesn’t love the vacations? At Heaton Dainard Actual Property, we’re throwing a raging vacation social gathering in 10 days. So I hope everybody can also be doing the identical, get on the market, get pleasure from your individuals. Additionally, we need to want a cheerful holidays to all of our listeners. We actually thanks guys for tuning in and supporting the On the Market Podcast, and we promise to make 2024 even higher.

Henry:Man, I might need to be a celebration crasher. For analysis functions solely as a result of I’m additionally attempting to plan a vacation social gathering, and who else higher to be taught from about throwing a raging social gathering than James Dainard? So should you see me hanging out within the again by the punch bowl attempting to look incognito, don’t name me out, James.

James:What you need to do is get your title on high salesperson as a result of they win a Rolex at our firm yearly.

Kathy:After all, they do.

Henry:Effectively, at present we now have a really particular present. Now we have an article from US Information & World Report. Now they launched a report concerning the 150 finest locations to reside in the US for 2023 and 2024. So we thought we might check out the highest 4 and decide if we predict these are good markets to really spend money on.Earlier than we get into all that, I did need to take a second and simply be a bit sentimental right here. I simply need to say thanks to our viewers. On the Market has simply developed this actually nice viewers of individuals and buyers. The help that we get after I’m out and about, and I see individuals about this present is tremendous nice. We wouldn’t have such an incredible present if it wasn’t for you guys.So thanks a lot to our listeners for persevering with to help us, persevering with to hearken to this present. We couldn’t do that present with out you, and also you’re the explanation why we do that podcast twice per week.

Kathy:Oh my gosh, I agree a lot. In every single place I’m going, I get stopped with individuals saying … Not all over the place I’m going, however when it’s an actual property occasion like I simply went to yesterday in Scottsdale. Folks come up and say how a lot they love the present, and we simply actually recognize that. I need to take a second earlier than we begin to learn a overview that I assumed was actually enjoyable.This one is known as Not Boring. It’s a five-star overview, so thanks a lot. It says, “The one,” it does say. “The one enjoyable, not boring, participating actual property podcast. These guys,” it ought to say additionally gals, “will not be squares.” So, good to know. “It’s truly entertaining and so academic.”

Henry:They’re right. I’m not a sq., I’m extra spherical. I’m extra like an oval, I’d say, is a greater time period to explain me. No, that’s a brilliant cool overview. I’d additionally prefer to share one. So this overview is known as On the Market is The place It’s At. One other five-star overview, it says, “I like the mixture of actual property and financial information along with the concentrate on completely different geographical areas of the nation. Intelligent title for the podcast as nicely.” So, I’m certain Dave would recognize that as a result of it has to do with information and that man is the info deli. Good.

James:We don’t make information boring, which is a expertise in itself.

Henry:That could be a problem.

James:It will possibly’t be except you’re an actual property nerd like me, and then you definately simply love the info. Thanks guys a lot for these critiques. They’re nice. They really simply made my complete day. I’m going to simply go on and browse our critiques each morning now to get me happening the day.So up subsequent, we’re going to overview the very best locations to reside and whether or not we predict they’re truly investible or are they only a actually good place to reside, form of like what individuals inform me on a regular basis in SoCal. Earlier than that, we’re going to take a fast break.

Kathy:Welcome again. As we stated, we’re going to be reviewing the very best locations to reside based on the US Information & World Report, and discussing if we imagine that it’s an excellent market to spend money on as a result of an incredible place to reside might not essentially be the very best place to take a position. So coming in at quantity 4, we now have Boulder, Colorado. James, are you able to inform us a bit bit about this market?

James:Effectively, in the beginning, I may reside in Boulder, Colorado as a result of it will get 300 days of sunshine a yr and I’m a sun-

Kathy:It does?

James:Yeah, Kathy. So it will get the sunshine that we get in SoCal, and we may very well be paying manner much less taxes and have a bit bit extra inexpensive place to reside. So, Boulder throughout is simply ranked everywhere in the board as one of many high metro locations to reside. You get sunshine. You get high quality of life. You get out of doors areas. You get recent air. Total, individuals simply actually, actually need to reside there.For me, it’s nonetheless a really costly market. High quality of residing versus whether or not I’m going to take a position there may be going to be … So I’m all the time going to choose the market that may make the very best return. Generally choosing the place you could reside in doesn’t imply that that’s the place it is best to make investments.I truly personally cut up my time in SoCal and don’t actually make investments a lot there as a result of it’s costly, and I make investments all in Seattle. I moved out of there for a cause. They don’t generally go hand in hand, however the important thing metrics at Boulder, it does have some superb metrics which can be going to make it engaging for the sure sort of buyers. So I believe it actually comes, what are you attempting to perform?The metro inhabitants is 328,000, so very massive. It’s inside one of many 150 most populated metro cities nationwide. Median age is 37 years previous. A number of Gen Z, millennials have moved on the market as a result of they need that high quality of residing and we’ve seen that over the previous three years with the pandemic. A number of youthful inhabitants, a number of the tech inhabitants or work at home inhabitants has moved into this sort of areas.The factor I don’t like about this metropolis although is the annual wage is 73,000, whereas the median residence value is 881,000. That’s the place my massive concern about investing on this market is as a result of should you evaluate it to a different costly market like Seattle. Seattle’s median residence value is sort of the identical. It’s about 881 for that metro metropolis. It’s within the 800s, however the median revenue in that metropolis is 106,000. So, it’s much more inexpensive. Despite the fact that Seattle’s rather a lot, it’s ranked as one of the unaffordable cities in comparison with a spot like Boulder, it has much more progress and it will possibly cowl much more. So, that’s my massive concern with Boulder, Colorado.It’s an incredible place to reside. You may have a number of completely different progress. You may have an enormous school campus there, which is basically good for the investor concentrating on pupil housing. I actually assume that that’s the greatest platform and angle to play in Boulder, Colorado as a result of apart from that, you actually can’t make issues pencil.After I did a bit little bit of market analysis in there, I used to be wanting on the common value of 4 items within the space. The common value I used to be seeing was 1.5 to $2 million, and the lease revenue that was going to be projected was going to be 9 to 10,000. So, that’s simply not going to cowl rather well. So an incredible place to reside, however not an incredible place to develop your checking account.Kathy, I do know you’re employed rather a lot in SoCal and costly markets. Would this be an costly market? I do know you’re all about high quality residing, high quality place.

Kathy:Boulder shouldn’t be an affordable place to reside. It’s humorous, Denver isn’t actually anymore both. My daughter’s transferring there, and she or he’s getting a one bed room in downtown that’s over 2,000 a month. That’s form of LA costs. So no, it’s not inexpensive, but it surely’s tremendous cool. I’d reside in Boulder too. I didn’t comprehend it was a sunny place. I’m a California woman. I would like my sunshine, in order that’s wonderful.I assume you may actually make the numbers work, should you purchased the property 20 years in the past. You’d be in nice form. That’s some good cashflow in Boulder. If you happen to’re actually inventive, should you’re renting by the room or having two or three college students per room, there’s methods to make school cities work. I do know those who personal properties in San Diego, New York schools. Children, they’ll squish in and make a eating room, a bed room, or no matter.So should you can lease by the room, or be inventive, or perhaps short-term rental, you may presumably make it work and hope that perhaps you additionally get appreciation. I most likely wouldn’t make investments there.

Henry:Yeah, Kathy. I’m in agreeance with you For essentially the most half. I believe this market with simply wanting on the two metrics James known as out. If the median residence value is 881,000, however the common annual wage is just 73,000, you’re going to have lots of people that may’t afford housing. It’s arduous to make these numbers work.As an investor, understanding that the median residence value is 881 and that wage is that low, individuals aren’t going to have the ability to pay the lease that you simply want them to pay to ensure that the properties you’re shopping for to cashflow. So should you had been going to spend money on a market like Boulder, you’ll need to have a superpower of actually understanding that market in excessive element and the place, what pockets of the town offers make sense in, or it’s important to actually concentrate on pupil housing in order that you understand how to go and purchase one thing you could perhaps flip right into a deal.You most likely need to go purchase one thing that’s a single, after which break that down right into a boarding home of some sort you could lease by the room. Then being inventive, there’s most likely methods you could make a deal work. It’s going to take some excessive understanding of the market, and also you’re going to need to have a number of boots on the bottom. It’s not simply one thing the place you’re going to say, “Hey, I’m going to choose Boulder. I’m going to go purchase a few offers, and I’m going to make some cash.” The numbers aren’t telling me that.So, you’re going to wish a bit extra assist in that state of affairs. It’s not one I’d decide to say, “Sure, you may make investments right here. It’s an incredible place to reside, and also you’re simply going to make a bunch of cash.”

James:The cashflow shouldn’t be nice, but it surely is determined by the investor and what your targets are on the time. For many who need to subsidize value, they usually received to pay for room and housing for his or her little one and perhaps they’re going on the market, it’s not a foul place to have a look at as a result of high quality of residing, we’ve seen has made a steady marketplace for regular progress, and so you will get regular progress out of it.The one factor to level out is their room and board value has gone up fairly a bit. It’s like 5% a yr proper now, and the typical value is 17 to $20,000 room and board for a pupil in that market. So should you do have a toddler going there, it’s a great way to cut back your value. So it is determined by what sort of funding technique you’re going with, there’s nothing incorrect. In case your little one’s there for 4 years, I imply who is aware of? They may do the Van Wilder and go for eight years.

Henry:Or the Henry.

James:The Henry, proper? That’s 80 to $160,000 that may very well be rolled into your funding. So it actually is determined by what the technique is, however I can’t make a pencil except it’s a rooming home. One factor that’s occurring although is primetime. Deion Sanders has made an influence on this campus, and now out of state purposes for schools has gone up 40%. So these dad and mom that their little one needs to go hang around with Deion, as a result of who doesn’t need to hang around with Deion Sanders?

Henry:I’d hang around with Deion.

James:So 300 days of sunshine, Deion Sanders, who is aware of? Possibly you need to nonetheless spend money on Boulder though your return’s not nice. Kathy, what market did you usher in for quantity three?

Kathy:Mine’s truly three. It’s the Triangle in North Carolina on the Raleigh-Durham and Chapel Hill space. Once more, it is a very younger market, 37 years previous, makes me really feel so previous. What I like concerning the Triangle space is it’s over 2 million individuals. So, that’s a complete massive pool of renters there. These are typically extremely educated individuals. There’s an enormous tech business analysis.Issues I like about North Carolina from an investor perspective is low property taxes. That’s all the time an excellent factor. Once more, this complete Triangle space was named third within the high finest locations to reside. I do know some mates from California who moved there. Completely like it for the inexpensive way of life in comparison with California and nonetheless close to fairly shut driving distance to seashores, good climate.It’s gotten a bit bit dearer there. I’ve been wanting to take a position on this space for years, but it surely simply didn’t fairly cashflow the way in which I wished. Costs have been greater than say Charlotte close by, so we targeted extra on Charlotte. Though I wished to take a position right here, I simply once more couldn’t make the numbers work. I believe should you had been residing there, like US Information & World Report is saying, it might be fairly inexpensive in comparison with different related tech markets.For investing, I believe you are able to do higher when it comes to cashflow as a result of the value level’s excessive. The median residence value is 434,000, month-to-month median lease is 1,100, about $1,200 a month. So these numbers don’t work for me. You’re actually hoping for appreciation in that form of state of affairs, which isn’t one thing I prefer to rely on or depend on, though it definitely has been dependable. There’s been a number of appreciation within the space.So once more good spot to reside, is likely to be an excellent place to be an investor, perhaps should you’re flipping. Once more all the time is determined by your technique, perhaps wholesaling. For what I do, purchase and maintain, I believe I can do higher elsewhere.

James:I like the Carolinas. I spent a number of time on the market this final, as I used to be performing some market analysis on presumably transferring out that manner. It’s a tremendous place to reside. The persons are good. The local weather’s nice. It’s received a number of greenery, good place to reside. Total metrics-wise, I truly would make investments on this space if you could find the proper of product and worth provides going to work.The explanation I imagine that’s as a result of there’s nonetheless progress. As a result of it’s an incredible place to reside, it’s getting a number of migration. Lots of people transferring into the world and the general value of residing, it’s an incredible place to reside. The price of residing is 4% decrease than the nationwide common. So anytime that somebody can reside someplace actually particular that has a top quality residing and it’s extra inexpensive than the typical, it has some further runway and progress. So, this might be a market that I do see may proceed to get some appreciation in it.I believe that each one issues with the median residence value at 400 and alter, and the median wage at 62,000. That’s an excellent metrics. Folks can afford to reside there. Which means individuals will nonetheless come into the market, and there may very well be some actually good progress. So I’d personally, I’d reside within the Carolinas, and I’d truly make investments there.

Henry:I’m bullish on this one. I actually like this market. There’s 4 massive explanation why I like this market and people 4 causes are Duke, North Carolina, North Carolina State, and Wake Forest. All 4 of these campuses are very shut to one another inside this space. That’s going to convey lots of people to the world, a number of jobs to the world, a number of college students, a number of renters. So what I like, not simply due to the colleges, however additionally they have a rising tech business on this space. As nicely, you could have hospital programs. So, you’ve received a number of medical jobs on this space.So the economic system, I believe is strong. Market numbers are additionally fairly strong to me. So once you have a look at the typical annual wage of 61,000, however you could have the median residence value of 434, simply on face worth that doesn’t sound nice. What that tells me is the median residence value is fairly strong. So should you’re going to go purchase one thing available on the market, these numbers aren’t going to work.If I can dive into this market and get good at deal searching and going direct to vendor or implementing another sort of methodology that’s going to assist me discover these deeper discounted offers, I wager you can also make these numbers work and you’re going to have a lease base. You may implement some school sort methods like renting by the room, carriage sort housing.I believe you may each get fairness appreciation and cashflow. It’s going to take a bit extra work. You’re not simply going to have the ability to go purchase one thing you see available on the market and make it work straight away, however with a bit little bit of effort in a market like this with robust numbers and a powerful economic system, I believe it’d be an incredible place to take a position.

Kathy:Possibly we must always go deal searching. Go on a bit journey to the Triangle.

Henry:That’s my love language, Kathy. Let’s do it.

Kathy:Effectively, earlier than we get to our different two markets, we’re going to take a fast break to listen to from our sponsors.Welcome again to On the Market. So we talked concerning the two markets which can be in third and fourth place, that being Boulder, Colorado in fourth place, and Raleigh-Durham in third place on US Information & World Experiences’ finest locations to reside record. We’ve been speaking about, yeah, we all know they’re nice locations to reside. Are they nice locations to take a position? We’d love to listen to your feedback on that within the notes. So tell us, do you spend money on these markets? In that case, what’s your technique? What are you doing that works? Hey, do you need to go on a deal searching mission with us? So we’d like to be taught extra.All proper, so now we’re going to go to the highest two locations to reside, once more based on US Information & World Report. Henry, what’s quantity two?

Henry:Effectively, earlier than we get to quantity two, if anyone is within the Boulder, Colorado market and you’ve got a home sightseeing tour and we are able to go see Coach Prime’s home. I’m in for that. So, ship me a DM. I’d like to go see Coach Prime’s home. The quantity two market on the record is Huntsville, Alabama.So Huntsville, Alabama, what I like about this market? It’s received an incredible metro inhabitants. The median age in Huntsville, Alabama, what do you guys assume it’s? Let’s take a guess. James, what do you assume the median age of individuals in Huntsville, Alabama are? Don’t cheat.

James:You understand what? I’d assume it’s an older inhabitants personally. I’d assume it’s going to be about 45, 50 years previous.

Henry:Kathy, what do you assume?

Kathy:Effectively, I cheated, so I do know.

Henry:Okay. You’re an enormous cheater. This caught me off guard. The median age in Huntsville, Alabama is just 39 years previous. In order that’s fairly strong, these individuals. The common annual wage is 61,000, and the median residence value is 349,000. So I believe these are some fairly nice numbers when it comes to locations to take a position.What lots of people don’t find out about Huntsville, Alabama is the robust economic system. So should you’re taking a look at Huntsville, Alabama, they name it The Rocket Metropolis as a result of it’s received historical past in rocket improvement. Which means there’s aerospace and protection work, and aerospace and protection contract work on this space. So, it’s an enormous know-how hub. There’s a number of manufacturing. Toyota has a plant on the market in Huntsville, Alabama. So that you’ve received a number of financial progress. You may have a fairly younger core of people who find themselves residing and dealing on this space.You’ve additionally received different improvement tasks, particularly within the sports activities world. So that you’ve received Toyota Discipline is underneath renovation. Joe Davis Stadium goes to have some work performed. So it’s going to be a number of issues contributing to individuals desirous to both transfer right here and relocate for work and reside right here the place you could have a reasonably low value of residing. The individuals who reside there are in a position to afford houses. So, all that to me says positivity. What do you guys take into consideration Huntsville, Alabama?

Kathy:Oh my gosh, I’ve been a fan of Huntsville for most likely 20 years now. Chances are you’ll or might not comprehend it. At my firm, RealWealth, that’s what I do. I’d go and search the nation for good locations to take a position. I discovered about Huntsville and realized you could lease to a rocket scientist. They’re stuffed with them. They’re all over the place. That’s a fairly good tenant.But after we began investing there, it was, oh my gosh, $150,000 for houses that once more you may lease to any individual that good. Clearly, costs have gone up dramatically. I believe they’ll proceed to take action. That’s not an business going away. We have to constantly be creating the navy, and the area packages, and so forth. So, that’s nearly assured tenant-employee base. So, I believe it’s an incredible place to take a position and apparently additionally an incredible place to reside.

James:Huntsville is on our dream purchase record. So me and my spouse sit round and we speak about, okay, if we wished to do a full redo and transition to an easier way of life the place we’re not operating 1,000,000 miles an hour, Huntsville is on the highest of the record as a result of it’s like a fairytale metropolis. It truly is. The standard of residing there may be so good.This is the reason I like this market. Huntsville was named the second-best place to reside in the US by the Information & World Report 2023 to 2024. High quality of residing’s good. The general metrics behind it, these will not be unhealthy numbers. Common annual wage is 61,000. That brings in, there’s a variety on that too as a result of the demographics range fairly a bit in Huntsville.You may have a number of high quality individuals. Within the area business, they’re making good cash. With a mean median residence value at 350, I really feel like that’s actually good metrics for progress. With the median month-to-month rents at 912, there’s a number of progress inside these numbers. As salaries improve, the lease needs to be going up as nicely. The median residence value is inexpensive you could commerce round in.With the median residence value at round 350,000, for a worth add investor, I believe that’s an excellent goal. Like what Henry stated, is you will get a deal in any market. So at 350 on the median residence value and we’re shopping for these at 270, 280, the place you’re getting that on the spot worth add, it’s going to really break even with some progress on there. That progress is the place you may commerce that fairness out.So, I like this market. It’s an incredible place to reside. Me and my spouse have it on our record if we ever simply need to do full restart. It’s received progress and other people need to reside there. Really, I used to be shocked on that inhabitants quantity 39. Which means there’s a number of younger working power, working distant which can be going to have careers which can be rising. That is going to develop into a dearer market.

Henry:I couldn’t agree with you guys extra. Huntsville’s received nice market dynamics. You possibly can positively end up a deal. If you happen to reside there, you bought a bonus, man. I’d positively be looking. You don’t need to miss out on a chance there. Now, we get to maneuver to the primary market on the record. So James, inform us what the primary market is, you massive cheese head.

James:I introduced this market up about six months in the past. It’s Inexperienced Bay, Wisconsin. It has a really top quality of residing, and it’s often because it’s inexpensive. Now personally, I don’t like cheese and I don’t like actually chilly climate, so Inexperienced Bay, and it doesn’t have an ocean round it. So it’s not the place for me, however I’d positively make investments there.What I like about investing there, it has a really low value of residing. The median residence value is 278,000 with the typical wage at 51,000, and the median lease is $851. So it’s a really, very inexpensive market and it is a nice money movement market. Now would I reside there? Completely not. I’ll go to there to look at the Seahawks beat the Packers someday sooner or later, but it surely’s a bit too chilly for me. It’s not likely my form of vibe.Then once more, I like to take a position the place I don’t must reside there to take a position. That’s not what I’m going for. I’m all the time going for math. What appreciation play can I get? Which I don’t know if Inexperienced Bay is basically going to present me these excessive fairness good points, however for steady lease progress the place you should buy a property beneath market. Once more, worth add investing.If the median residence value is 270, you’re shopping for them for 200 and you may lease these properties out, you’re going to cashflow. It’s very, very inexpensive. I do really feel like because the economic system has been shifting and we’ve seen these markets which can be inexpensive are nonetheless rising. That’s what we’ve seen in pattern, even with excessive rates of interest. So, I believe it’s an incredible place to take a position. You may get some actually good cashflow out of it, however if you wish to go test in your properties, convey your heat coats. I similar to being heat, so it’s not for me to reside in.

Henry:Don’t birds fly south for the winter? Are you certain your Seahawks would make all of it proper should you had an away sport in Inexperienced Bay? All of them going to be okay over there?

James:I believe the final one, it was six levels. It was when their subject purpose kicker missed a 10-yard subject purpose. We went to the subsequent spherical of the playoffs.

Henry:Sure, as a result of he was kicking a brick. That factor is chilly.

James:Oh, I’ll level out. I opted to not go to Inexperienced Bay for that sport, however I went to North Carolina for that sport as a result of it’s a manner higher place to hang around in my view.

Henry:I agree with you. I believe the dynamics when it comes to cashflow are there. I’m not an enormous fan of chilly climate both, and so I most likely wouldn’t make investments on this market simply due to that alone. Don’t let my hatred for chilly climate cease you guys from going on the market and earning profits. I believe nice dynamics, inhabitants’s good. The one different concern I’d have, is the economic system going to be there long-term to help continued progress long run? If that’s there, I believe you’ve received nice market dynamics in a spot like Inexperienced Bay.I used to be actually stunned to see, once more the median age is just 38 years previous. I’d’ve thought it was an older market there as nicely, however goes to point out what I find out about chilly climate locations.

Kathy:Effectively, I can say it is a place I need to go to as a result of I do love cheese. I’ve been dying to go to Wisconsin for the cheese. James, I believe you desire to it in the summertime. Simply from all the things I’ve learn, it seems like a very enjoyable school city, after which on the sporting occasions. Simply go in the summertime, they’ve water there. It’s most likely freezing that you simply received’t swim in it, however you’re not going to swim in California water both, I’m guessing.Anyway, I’d make investments there too. Possibly a short-term rental due to all of the guests that come for, once more, dad and mom to come back go to their youngsters at school or for the sporting occasions. Brief-term rental may work presumably, however boy, I’d want to know the market a bit bit higher within the rental market. It seems like low lease for purchase and maintain. I don’t know if that is right, however median month-to-month lease at 851, though the house value is decrease, so is the lease. So it could or might not make sense from a purchase and maintain perspective.

James:Effectively, and the price of cheese goes up too.

Henry:So we shouldn’t spend money on housing, we must always spend money on cheese.

James:I imply it’s going up. So there’s this financial stronghold, however I don’t know. I simply can’t go to a soccer sport and put on a cheese hat on my head. I simply can’t. I’d need to develop into a Packer fan. I simply can’t do it. I don’t look good in yellow.

Kathy:I don’t look good in yellow, cool for the day. All proper. That city’s not going to be just right for you, James. All proper, nicely thanks all a lot for becoming a member of us right here On the Market. I hope you’re having a beautiful vacation. We glance ahead, so ahead to seeing you in 2024.

Dave Meyer:On the Market was created by me, Dave Meyer, and Kailyn Bennett. The present is produced by Kailyn Bennett with modifying by Exodus Media. Copywriting is by Calico Content material. We need to lengthen an enormous thanks to everybody at BiggerPockets for making this present attainable.