4 Traits of an Investor Friendly City

When you’re looking to make a solid real estate investment, the ultimate goal is cash flow. You want your cash flow to be largely hands-off and passive, and that’s why it’s pertinent to do your research about your rental markets.

Once you identify a potential market, you should consider if the city meets the following four requirements that make it conducive to buy and hold investing:

  1. The first thing you should examine is how permits work in that particular market. For example, in some states or cities, it can take seemingly forever to obtain the correct permits. Pulling permits is part of the process; we do it on every house we renovate, so you want that to be an easy and seamless procedure.
  2. Also, you should ask if utilities companies will be friendly to investors. It’s common to be charged a fee to put a utility bill under the name of your LLC, but some companies ask for much more. For example, we once had a utilities company want us to meet in person. And since we live out of state, they demanded that we notarize our application.
  3. Another thing to consider is rental licenses. For some reason, some states charge a fee for you to be a landlord. Not all municipalities charge this. In fact, most don’t. However, you need to be prepared and do your research ahead of time.
  4. Lastly, you should consider if the state itself is landlord friendly. This means, how do they handle evictions? What are their laws like surrounding security deposits? Again, this is just another thing to consider.
Once you identify a potential rental market, you should consider if the city meets the following four requirements that make it conducive to buy and hold real estate investing.