I’m a Brentwood guy who started buying up SFRs in 2011-2013 time fame and the return over roughly the past 3 to 4 years has been breath taking. I do wonder how much longer that will last, we are experiencing a big surge in building out here again, so I am looking for growth in underlying prices to cool (maybe quite a bit). I won’t be selling what I already have in Brentwood because I think long term its still a very positive place to be, plus rents here on my original cost are great (they are up about 40% during this same period).
However, my new money will be going elsewhere. I have a spot in the Midwest where I once lived that’s doing quite well and I already have all the infrastructure in place there (prop mgr/agent, ins guy, etc.), and that helps immensely. Rental rates there are at least twice as high as in Brentwood. Growth won’t be anything like it has been in Brentwood over the past 3 to 4 years, but I’m anticipating underlying appreciation to be around 5%, plus another 8% to 9% on the rental income side. Not a home run shot by any means, but it gets me solidly on base, plus I can get near turnkey quality properties there at a small but not insignificant discount from market. I just give my prop mgr there POA and he does almost all of the rest other than setting final acquisition prices – I still do that part.