biden tax changes impact on real estate investors

Looking for more profitable markets to invest in?

Try these top 10 cities in the US by gross rent multiplier (GRM), after SparkRental analyzed the top 100 cities in the country based on data from Zillow.

It’s a short episode that explains the numbers and statitics behind that TOP 10 list.

Go ahead and let us know your thoughts or questions in the comments below.

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Audio Podcast Version

Also available on iTunes, Stitcher, and wherever else you listen 🙂

Resources Mentioned in This Podcast & Video:

What short-term fix-and-flip loan options are available nowadays?

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We compare several buy-and-rehab lenders and several long-term landlord loans on LTV, interest rates, closing costs, income requirements and more.

live off rents podcast transcript

Deni Supplee: Hi, everybody, and welcome to Spark Rental’s broadcast weekly broadcast and podcasts. I hope you all will. Chat with us in this endeavor or not, let it be just me and Brian talking to each other again. So last time, which was last week, we talked about some steps you can take for 10 minutes a month that will build wealth faster in 2021 and we’re in 2021. So hopefully you saw it and you’re starting to put some of them into effect.

Deni Supplee: And this week we’re going to discuss the top 10 cities in the US for rental investing like the GRM, which Brian is going to explain to us what it is.

Deni Supplee: Happy New Year, Tim. And hi there Cristina.

Brian Davis: So, Let us know where you guys jump in, where you’re from and let us know your questions, we’re here. This is an open conversation between all of us. So let us know what we can do to help clear this up for you. And we don’t want to jump in and talk about exactly what is GRM and how it’s useful for real estate investors. First of all, Jerome stands for gross multiplier and it’s way simpler. But don’t sound pretty prices to property rents, it’s the property price divided by the annual gross rental income. So another way of putting that is how many years would it take for properties, rents to pay for the purchase price itself? So the property, the cost. $ 100.000,00 and the gross rents every year were $10.000,00, then it would take 10 years for the gross rents to pay off purchase price of 10 . So it’s just a ratio of rents to prices.

Deni Supplee: Can you explain a little bit about the significance of that?

Brian Davis: Yeah, so, I mean, there’s a couple of ways you can use this, but my favorite way to use this is to scout you cities to invest in, because most coastal cities, the metropolitan coastal cities where a lot of investors live, they tend to have terrible droughts. They tend to have very high prices, property prices compared to the rents. And as an investor, you want to see higher rents with lower property prices. So higher yields for these properties. So you want to see lower GRMs, which makes for a better deal shorter. So in other words, a shorter number of years for the rents to pay for the property price. So, yeah, so we actually just kind of for fun for gets the signals. As my one friend says, we created a map now an interactive map of the top 100 cities in the US by population and all of their different numbers.

Brian Davis: So, Ryan, so creating maps. So it’s kind of like interactive tools, right.

Brian Davis: So I’m going to put a link to that map in the comments here where you can see it and check it out on your own time, of course. But yeah, it’s top 100 cities in the US this year. For each of them, the height of the spike on the map is shows you that the ground now, the water source, the raw data source for that was we used data from Zillow to compare average property prices to average property rents in each one of those top 100 cities. So without further ado, let’s break down the top 10 cities in the US for rental investing by GRM. So at number 10, we have Augusta, Georgia, with a group of 11.96 or roughly 12. So that means it would take around 12 years for the gross rents in properties there to pay for the purchase price of the property. Number 9 is Syracuse, New York, where the Joram almost identical, it’s 11.92 at number 8, we have Lakeland, Florida, with a jury of 11.6 to number seven, Tulsa, Oklahoma, Jérome of 11.6. Number 6, we have Scranton, Pennsylvania, of the office fame and not too far away from where Danny lives outside of Philadelphia. So they grow in Scranton, Pennsylvania, is 11.5 to that. Number 5, we’ve got Winston I’m sorry, Winston-Salem, North Carolina, 11.1. At number four 4, we have Greensboro, North Carolina, 11.28. And then the top 3 here we’ve got El Paso, Texas, 10.09. So big jump down right there. And then number 2 got Memphis, Tennessee, 10.05.

Deni Supplee: Oh, that’s interesting.

Brian Davis: And then the only city in the country to fall below ten is Jackson, Mississippi, at number 1, 9.97 as the drought. So it was still a lot less than 10 states on this list, a lot of Southern states on this list.

Brian Davis: In fact, only Syracuse, New York and Scranton, Pennsylvania, are over the Mason-Dixon line north and of thing. So and yeah, I go check out the interactive map, but you can you can see some of the other difference for the most populous cities around the country. But let’s talk for one second here about buying properties long distance, because chances are you don’t actually live in one of those type sentences. Right? Right. So, first of all, we do have an article all about long distance real estate investing and in particular buying properties, which makes it a lot easier to buy properties long distance. So put them into this there. And Christina says, ”by the way, I got your email with the way to save money, I will apply some”. So we sent out a newsletter an hour or two ago. I was thinking 20 creative ways to save money in 2021. And some of those we’ve talked a lot about before, things like how stacking things like moving overseas like like I did. And then of course there are some much easier ones on there as well, but don’t require the same kind of lifestyle changes, but also don’t go of the same kind of savings results. You’re all right. So yeah, I’m going to try investing. So that’s awesome here.

Deni Supplee: Yeah. So you know how that works out.

Brian Davis: Absolutely. So we did a couple of tangible tools you can use as well to make it a little easier to invest long distance. So one of our favorites is rootstock, and we’ll put a link to that in the comments here as well.

Brian Davis: So Whisstock is an online marketplace where you can browse listings for turnkey rental properties and each listing comes with a ton of valuable data on it, not just on the property itself, including things like the home inspection report, but it also includes a lot of data about the neighborhood, things like school quality, all kinds of good stuff. It sure is historic appreciation of a property bubble in the neighborhood level. So plenty of good details there to help to make it easier to buy rental properties long distance. Some of them have tenants already in place. Some of them are turnkey and simply ready to run out. And witchdoctors offer a couple awesome guarantees as well, including one that you will get a tenant in the property within 60 days, 90 days.

Brian Davis: I can’t remember

Deni Supplee: I can’t either

Brian Davis: it’s been a while either, but they have several really awesome guarantees to make things even easier for you as an out-of-state turnkey investor. And by the way, it’s something like 62% of the transactions that take place and our buyers who live more than 1.000 miles away from the property where they’re buying. So it really is designed for long distance real estate investors like you to buy another tool.

Brian Davis: Here we have a property concierge with turnkey property concierge that can help you buy properties in one of many markets where she operates her name. Just shoot us an email at Support Spark Rental’s. Or you can direct messages on Facebook and we’ll hook you up with her and give you her contact information so you can see what she has available as turnkey properties. She operates in three or four states, I think.

Brian Davis: So she can hook you up with some great Trinity properties long distance as well, and she can hook you up with some great property managers. She works with most markets to do it for you.

Deni Supplee: That is a step up.

Brian Davis: Absolutely. So third tool here. So if you buy property a long distance asset column and it is another sort of both the marketplace and they also sell properties directly to a turnkey investors long distance. And then finally, we’re going to send you a link to an interactive map where you can compare property tax rates by county, which is always useful if you don’t want to pay massive property taxes, which I certainly do not used to in Baltimore City, but not more so. And then Christina says, I’m in New York and I plan to invest in Lakeland, Florida, and El Paso, Texas. She says, New York, it’s going to be tough. I hear you, Christina. And if you look at migration data within the US, there is a high outbound migration rate from New York. It’s high taxes. High cost of living. Cold winters. So a lot of people are moving out of New York. All right. That’s all I have. Is there anything you want to add for us to call this episode complete?

Deni Supplee: I don’t think so. I think you covered it. I think. Yeah. Check out some of the tools we have posted and any questions, as usual, just reach out to us at support at Sparkrental.com

Brian Davis: All right, well, thank you so much for joining us today. We will see you next Tuesday at two o’clock Eastern, 11:00 a.m. Pacific, and choose a message either over Facebook, our Facebook page, or Support sparkrental.com and let us know what you want to hear. But we want to keep this all about you guys. So and don’t forget to review the podcast on Stitcher or iTunes or wherever it is you listen to podcast. All right. Talk to you soon

Deni Supplee: Bye bye

 

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