The Art & Science of Choosing A Real Estate Market-Revisited

Picking a new real estate market is a huge challenge when you are starting out. Learning about the returns, the economic growth, the geographic attributes, risks, and all that must be considered can be overwhelming. In this episode, we share what we find to be the most important things to look at and critical questions to ask yourself when settling on where you will put your money to work.  --- Transcript   Before we jump into the episode, here's a quick disclaimer about our content. The remote real estate investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Emil; Hey, everybody, welcome to another episode of The Remote Real Estate Investor. My name is Emil Shour. And as always, I'm joined by   Tom: Tom Schneider,   Michael: and Michael Albaum.   Emil: And today's episode is going to be a little bit unique we're going to be talking about it's actually a follow up episode. So if you scroll way back in the archives, we did an episode called the art and science of choosing a real estate market. That was Episode 21. And today, we're going to be doing a little bit of a follow up talking about some additional things we've learned and thought of, in thinking about choosing a market that we think are super important, especially for new investors, who are still in that phase of selecting a market. So let's dive right into this one.   Alright, guys, so all I'll actually kick this one off, I am going to be talking about property taxes, and specifically choosing a market where the property taxes are reassessed based on market value. So I'll bring up an example from my own portfolio. And then another example, I've heard through our good friend Michael Zuber.   So I invested in Indianapolis in 2017. And when I invested I did not know this, I learned this the hard way. But Indianapolis actually reassessed his property value every other year, and they base their property tax on that. So every other year, they look at the market value of your home, whether it's gone up or down, and they say, Okay, here's your new market value. And let's just say property tax is 2%. We're charging you 2% on that. So your taxes have gone up or down.   And since 2017, it's only gone up, which is great. From a profit standpoint, if I were to go to sell, it was great from a cash out refi perspective, which I've mentioned in the past. But it also, you know, when rents don't rise as quickly as your values do, and your property tax goes up, your cash flows getting potentially crunched more and more each year when that thing gets reassessed.   So this is something to be mindful of right? When you're looking at a market call the county assessor talk to investors who are in that market and learn what a win is, obviously, you want to know, what is the property tax rate, but be how often are property values reassessed. So how often is your property tax going to change? If at all, I don't think every state does this, it may even be on a city level. But just something to find out.   The other example I was mentioning, so Michael Zuber, I was chatting with him. And he mentioned a friend of his who invested somewhere about a decade ago, and that market has exploded in growth. I'm sure you all can imagine, you know, which markets have have gone crazy over the last 10 years. So his friend is in one bought a decade ago, was cash flowing about a decade ago. But now with this, this is a state where property taxes are super high already. And values have gone up like crazy and rents haven't kept up anywhere close to the pace of value increases.   So now, this investors basically has a portfolio where the values have gone up a ton on paper, he's doing really wel