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

Kathy:
Hello and welcome to the On the Market Podcast. I’m one of your hosts, Kathy Fettke, and I am joined today by Henry Washington and James Dainard.

James:
I am excited for this episode to be coming out on Christmas because who doesn’t love the holidays? At Heaton Dainard Real Estate, we are throwing a raging holiday party in 10 days. So I hope everyone is also doing the same, get out there, enjoy your people. Also, we want to wish a happy holidays to all of our listeners. We really thank you guys for tuning in and supporting the On the Market Podcast, and we promise to make 2024 even better.

Henry:
Man, I might have to be a party crasher. For research purposes only because I am also trying to plan a holiday party, and who else better to learn from about throwing a raging party than James Dainard? So if you see me hanging out in the back by the punch bowl trying to look incognito, don’t call me out, James.

James:
What you want to do is get your name on top salesperson because they win a Rolex at our company every year.

Kathy:
Of course, they do.

Henry:
Well, today we have a very special show. We have an article from US News & World Report. Now they released a report about the 150 best places to live in the United States for 2023 and 2024. So we thought we would take a look at the top four and determine if we think these are good markets to actually invest in.
Before we get into all that, I did want to take a moment and just be a little sentimental here. I just want to say thank you to our audience. On the Market has just developed this really great audience of people and investors. The support that we get when I’m out and about, and I see people about this show is super great. We wouldn’t have such a great show if it wasn’t for you guys.
So thank you so much to our listeners for continuing to support us, continuing to listen to this show. We couldn’t do this show without you, and you’re the reason why we do this podcast twice a week.

Kathy:
Oh my gosh, I agree so much. Everywhere I go, I get stopped with people saying … Not everywhere I go, but when it’s a real estate event like I just went to yesterday in Scottsdale. People come up and say how much they love the show, and we just really appreciate that. I want to take a moment before we start to read a review that I thought was really fun.
This one is called Not Boring. It’s a five-star review, so thank you so much. It says, “The only,” it does say. “The only fun, not boring, engaging real estate podcast. These guys,” it should say also gals, “are not squares.” So, good to know. “It’s actually entertaining and so educational.”

Henry:
They’re correct. I am not a square, I’m more round. I’m more like an oval, I would say, is a better term to describe me. No, that’s a super cool review. I’d also like to share one. So this review is called On the Market is Where It’s At. Another five-star review, it says, “I love the combination of real estate and economic data in conjunction with the focus on different geographical areas of the country. Clever name for the podcast as well.” So, I’m sure Dave would appreciate that because it has to do with data and that guy is the data deli. Perfect.

James:
We don’t make data boring, which is a talent in itself.

Henry:
That is a challenge.

James:
It can’t be unless you’re a real estate nerd like me, and then you just love the data. Thank you guys so much for those reviews. They’re great. They actually just made my whole day. I’m going to just go on and read our reviews every morning now to get me going on the day.
So up next, we’re going to review the best places to live and whether we think they’re actually investible or are they just a really good place to live, kind of like what people tell me all the time in SoCal. Before that, we’re going to take a quick break.

Kathy:
Welcome back. As we said, we’re going to be reviewing the best places to live according to the US News & World Report, and discussing if we believe that it’s a good market to invest in because a great place to live may not necessarily be the best place to invest. So coming in at number four, we have Boulder, Colorado. James, can you tell us a little bit about this market?

James:
Well, first and foremost, I could live in Boulder, Colorado because it gets 300 days of sunshine a year and I am a sun-

Kathy:
It does?

James:
Yeah, Kathy. So it gets the sunshine that we get in SoCal, and we could be paying way less taxes and have a little bit more affordable place to live. So, Boulder all around is just ranked all over the board as one of the top metro places to live. You get sunshine. You get quality of life. You get outdoor spaces. You get fresh air. Overall, people just really, really want to live there.
For me, it’s still a very expensive market. Quality of living versus whether I’m going to invest there is going to be … So I’m always going to pick the market that can make the highest return. Sometimes picking the place that you can live in doesn’t mean that that’s where you should invest.
I actually personally split my time in SoCal and don’t really invest much there because it’s expensive, and I invest all in Seattle. I moved out of there for a reason. They don’t sometimes go hand in hand, but the key metrics at Boulder, it does have some very good metrics that are going to make it attractive for the certain type of investors. So I think it really comes, what are you trying to accomplish?
The metro population is 328,000, so very large. It’s inside one of the 150 most populated metro cities nationwide. Median age is 37 years old. A lot of Gen Z, millennials have moved out there because they want that quality of living and we’ve seen that over the past three years with the pandemic. A lot of younger population, a lot of the tech population or work from home population has moved into this kind of areas.
The thing I don’t like about this city though is the annual salary is 73,000, whereas the median home price is 881,000. That’s where my big concern about investing in this market is because if you compare it to another expensive market like Seattle. Seattle’s median home price is almost the same. It’s about 881 for that metro city. It’s in the 800s, but the median income in that city is 106,000. So, it’s a lot more affordable. Even though Seattle’s a lot, it’s ranked as one of the most unaffordable cities compared to a place like Boulder, it has a lot more growth and it can cover a lot more. So, that is my big concern with Boulder, Colorado.
It’s a great place to live. You have lots of different growth. You have a huge college campus there, which is really good for the investor targeting student housing. I really think that that is the biggest platform and angle to play in Boulder, Colorado because other than that, you really can’t make things pencil.
When I did a little bit of market research in there, I was looking at the average cost of four units in the area. The average cost I was seeing was 1.5 to $2 million, and the rent income that was going to be projected was going to be nine to 10,000. So, that’s just not going to cover really well. So a great place to live, but not a great place to grow your bank account.
Kathy, I know you work a lot in SoCal and expensive markets. Would this be an expensive market? I know you’re all about quality living, quality place.

Kathy:
Boulder is not a cheap place to live. It’s funny, Denver isn’t really anymore either. My daughter’s moving there, and she’s getting a one bedroom in downtown that’s over 2,000 a month. That’s kind of LA prices. So no, it’s not affordable, but it’s super cool. I would live in Boulder too. I didn’t know it was a sunny place. I’m a California girl. I need my sunshine, so that’s amazing.
I assume you could really make the numbers work, if you bought the property 20 years ago. You’d be in great shape. That’s some good cashflow in Boulder. If you’re really creative, if you’re renting by the room or having two or three students per room, there’s ways to make college towns work. I know people that own properties in San Diego, New York colleges. Kids, they’ll squish in and make a dining room, a bedroom, or whatever.
So if you can rent by the room, or be creative, or maybe short-term rental, you could possibly make it work and hope that maybe you also get appreciation. I probably would not invest there.

Henry:
Yeah, Kathy. I am in agreeance with you For the most part. I think this market with just looking at the two metrics James called out. If the median home price is 881,000, but the average annual salary is only 73,000, you’re going to have a lot of people that can’t afford housing. It’s hard to make those numbers work.
As an investor, knowing that the median home price is 881 and that salary is that low, people aren’t going to be able to pay the rent that you need them to pay in order for the properties you’re buying to cashflow. So if you were going to invest in a market like Boulder, you would want to have a superpower of really understanding that market in extreme detail and where, what pockets of the city deals make sense in, or you have to really specialize in student housing so that you know how to go and buy something that you can maybe turn into a deal.
You probably have to go buy something that’s a single, and then break that down into a boarding house of some kind that you can rent by the room. Then being creative, there’s probably ways that you can make a deal work. It’s going to take some extreme understanding of the market, and you’re going to have to have a lot of boots on the ground. It’s not just something where you’re going to say, “Hey, I’m going to pick Boulder. I’m going to go buy a couple of deals, and I’m going to make some money.” The numbers aren’t telling me that.
So, you’re going to need a little more help in that scenario. It’s not one I’d pick to say, “Yes, you can invest here. It’s a great place to live, and you’re just going to make a bunch of money.”

James:
The cashflow is not great, but it depends on the investor and what your goals are at the time. For those who want to subsidize cost, and they got to pay for room and housing for their child and maybe they’re going out there, it is not a bad place to look at because quality of living, we’ve seen has made a stable market for steady growth, and so you can get steady growth out of it.
The one thing to point out is their room and board cost has gone up quite a bit. It’s like 5% a year right now, and the average cost is 17 to $20,000 room and board for a student in that market. So if you do have a child going there, it’s a good way to reduce your cost. So it depends on what kind of investment strategy you’re going with, there’s nothing wrong. If your child’s there for four years, I mean who knows? They could do the Van Wilder and go for eight years.

Henry:
Or the Henry.

James:
The Henry, right? That’s 80 to $160,000 that could be rolled into your investment. So it really depends on what the strategy is, but I can’t make a pencil unless it’s a rooming house. One thing that is happening though is primetime. Deion Sanders has made an impact in this campus, and now out of state applications for colleges has gone up 40%. So those parents that their child wants to go hang out with Deion, because who doesn’t want to hang out with Deion Sanders?

Henry:
I would hang out with Deion.

James:
So 300 days of sunshine, Deion Sanders, who knows? Maybe you want to still invest in Boulder even though your return’s not great. Kathy, what market did you bring in for number three?

Kathy:
Mine’s actually three. It’s the Triangle in North Carolina at the Raleigh-Durham and Chapel Hill area. Again, this is a very young market, 37 years old, makes me feel so old. What I like about the Triangle area is it’s over 2 million people. So, that’s a whole big pool of renters there. These are generally highly educated people. There’s a big tech industry research.
Things I love about North Carolina from an investor perspective is low property taxes. That’s always a good thing. Again, this whole Triangle area was named third in the top best places to live. I know some friends from California who moved there. Absolutely love it for the affordable lifestyle compared to California and still near pretty close driving distance to beaches, nice weather.
It’s gotten a little bit more expensive there. I have been wanting to invest in this area for years, but it just didn’t quite cashflow the way I wanted. Prices have been higher than say Charlotte nearby, so we focused more on Charlotte. Although I wanted to invest here, I just again couldn’t make the numbers work. I think if you were living there, like US News & World Report is saying, it would be pretty affordable compared to other similar tech markets.
For investing, I think you can do better in terms of cashflow because the price point’s high. The median home price is 434,000, monthly median rent is 1,100, about $1,200 a month. So those numbers don’t work for me. You’re really hoping for appreciation in that kind of scenario, which is not something I like to depend on or rely on, although it certainly has been reliable. There’s been a lot of appreciation in the area.
So again great place to live, might be a good place to be an investor, maybe if you’re flipping. Again always depends on your strategy, maybe wholesaling. For what I do, buy and hold, I think I can do better elsewhere.

James:
I love the Carolinas. I spent a lot of time out there this last, as I was doing some market research on possibly moving out that way. It is an amazing place to live. The people are nice. The climate’s great. It’s got a lot of greenery, good place to live. Overall metrics-wise, I actually would invest in this area if you can find the right kind of product and value adds going to work.
The reason I believe that is because there’s still growth. Because it’s a great place to live, it’s getting a lot of migration. A lot of people moving into the area and the overall cost of living, it’s a great place to live. The cost of living is 4% lower than the national average. So anytime that someone can live somewhere really special that has a high quality living and it’s more affordable than the average, it has some extra runway and growth. So, this would be a market that I do see could continue to get some appreciation in it.
I think that all matters with the median home price at 400 and change, and the median salary at 62,000. That’s a good metrics. People can afford to live there. That means people will still come into the market, and there could be some really good growth. So I would personally, I would live in the Carolinas, and I would actually invest there.

Henry:
I am bullish on this one. I really like this market. There’s four big reasons why I like this market and those four reasons are Duke, North Carolina, North Carolina State, and Wake Forest. All four of those campuses are very close to each other within this area. That’s going to bring a lot of people to the area, a lot of jobs to the area, a lot of students, a lot of renters. So what I like, not just because of the universities, but they also have a growing tech industry in this area. As well, you have hospital systems. So, you’ve got lots of medical jobs in this area.
So the economy, I think is solid. Market numbers are also pretty solid to me. So when you look at the average annual salary of 61,000, but you have the median home price of 434, just on face value that doesn’t sound great. What that tells me is the median home price is pretty solid. So if you’re going to go buy something on the market, those numbers aren’t going to work.
If I can dive into this market and get good at deal hunting and going direct to seller or implementing some other type of method that’s going to help me find those deeper discounted deals, I bet you can make those numbers work and you are going to have a rent base. You could implement some college type strategies like renting by the room, carriage type housing.
I think you can both get equity appreciation and cashflow. It’s going to take a little more work. You’re not just going to be able to go buy something you see on the market and make it work right away, but with a little bit of effort in a market like this with strong numbers and a strong economy, I think it’d be a great place to invest.

Kathy:
Maybe we should go deal hunting. Go on a little trip to the Triangle.

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

Kathy:
Well, before we get to our other two markets, we are going to take a quick break to hear from our sponsors.
Welcome back to On the Market. So we talked about the two markets that are in third and fourth place, that being Boulder, Colorado in fourth place, and Raleigh-Durham in third place on US News & World Reports’ best places to live list. We’ve been talking about, yeah, we know they’re great places to live. Are they great places to invest? We would love to hear your comments on that in the notes. So let us know, do you invest in these markets? If so, what’s your strategy? What are you doing that works? Hey, do you want to go on a deal hunting mission with us? So we’d love to learn more.
All right, so now we’re going to go to the top two places to live, again according to US News & World Report. Henry, what’s number two?

Henry:
Well, before we get to number two, if anybody is in the Boulder, Colorado market and you have a house sightseeing tour and we can go see Coach Prime’s house. I’m in for that. So, send me a DM. I’d love to go see Coach Prime’s house. The number two market on the list is Huntsville, Alabama.
So Huntsville, Alabama, what I like about this market? It’s got a great metro population. The median age in Huntsville, Alabama, what do you guys think it is? Let’s take a guess. James, what do you think the median age of people in Huntsville, Alabama are? Don’t cheat.

James:
You know what? I would think it’s an older population personally. I would think it’s going to be about 45, 50 years old.

Henry:
Kathy, what do you think?

Kathy:
Well, I cheated, so I know.

Henry:
Okay. You’re a big cheater. This caught me off guard. The median age in Huntsville, Alabama is only 39 years old. So that’s pretty solid, these people. The average annual salary is 61,000, and the median home price is 349,000. So I think those are some pretty great numbers in terms of places to invest.
What a lot of people don’t know about Huntsville, Alabama is the strong economy. So if you’re looking at Huntsville, Alabama, they call it The Rocket City because it’s got history in rocket development. That means there’s aerospace and defense work, and aerospace and defense contract work in this area. So, it’s a big technology hub. There’s lots of manufacturing. Toyota has a plant out there in Huntsville, Alabama. So you’ve got a lot of economic growth. You have a reasonably young core of people who are living and working in this area.
You’ve also got other development projects, especially in the sports world. So you’ve got Toyota Field is under renovation. Joe Davis Stadium is going to have some work done. So it’s going to be lots of things contributing to people wanting to either move here and relocate for work and live here where you have a fairly low cost of living. The people who live there are able to afford homes. So, all that to me says positivity. What do you guys think about Huntsville, Alabama?

Kathy:
Oh my gosh, I’ve been a fan of Huntsville for probably 20 years now. You may or may not know it. At my company, RealWealth, that’s what I do. I would go and search the country for good places to invest. I found out about Huntsville and learned that you can rent to a rocket scientist. They’re full of them. They’re everywhere. That’s a pretty good tenant.
Yet when we started investing there, it was, oh my gosh, $150,000 for homes that again you could rent to somebody that brilliant. Obviously, prices have gone up dramatically. I think they’ll continue to do so. That’s not an industry going away. We need to consistently be developing the military, and the space programs, and so forth. So, that’s almost guaranteed tenant-employee base. So, I think it’s a great place to invest and apparently also a great place to live.

James:
Huntsville is on our dream buy list. So me and my wife sit around and we talk about, okay, if we wanted to do a full redo and transition to a simpler lifestyle where we’re not running a million miles an hour, Huntsville is on the top of the list because it’s like a fairytale city. It really is. The quality of living there is so good.
This is why I like this market. Huntsville was named the second-best place to live in the United States by the News & World Report 2023 to 2024. Quality of living’s good. The overall metrics behind it, those are not bad numbers. Average annual salary is 61,000. That brings in, there’s a wide range on that too because the demographics vary quite a bit in Huntsville.
You have a lot of quality people. In the space industry, they’re making good money. With an average median home price at 350, I feel like that is really good metrics for growth. With the median monthly rents at 912, there’s a lot of growth inside those numbers. As salaries increase, the rent should be going up as well. The median home price is affordable that you can trade around in.
With the median home price at around 350,000, for a value add investor, I think that’s a good target. Like what Henry said, is you can get a deal in any market. So at 350 at the median home price and we’re buying these at 270, 280, where you’re getting that instant value add, it’s going to actually break even with some growth on there. That growth is where you can trade that equity out.
So, I like this market. It’s a great place to live. Me and my wife have it on our list if we ever just want to do full restart. It’s got growth and people want to live there. Actually, I was shocked on that population number 39. That means there’s a lot of young working force, working remote that are going to have careers that are growing. This is going to become a more expensive market.

Henry:
I couldn’t agree with you guys more. Huntsville’s got great market dynamics. You can definitely find yourself a deal. If you live there, you got an advantage, man. I’d definitely be taking a look. You don’t want to miss out on an opportunity there. Now, we get to move to the number one market on the list. So James, tell us what the number one market is, you big cheese head.

James:
I brought this market up about six months ago. It’s Green Bay, Wisconsin. It has a very high quality of living, and it’s really because it’s affordable. Now personally, I do not like cheese and I do not like really cold weather, so Green Bay, and it doesn’t have an ocean around it. So it’s not the place for me, but I would definitely invest there.
What I like about investing there, it has a very low cost of living. The median home price is 278,000 with the average salary at 51,000, and the median rent is $851. So it’s a very, very affordable market and this is a great cash flow market. Now would I live there? Absolutely not. I will visit there to watch the Seahawks beat the Packers sometime in the future, but it’s a little too cold for me. It’s not really my kind of vibe.
Then again, I like to invest where I don’t need to live there to invest. That’s not what I’m going for. I’m always going for math. What appreciation play can I get? Which I don’t know if Green Bay is really going to give me those high equity gains, but for stable rent growth where you can buy a property below market. Again, value add investing.
If the median home price is 270, you’re buying them for 200 and you can rent these properties out, you’re going to cashflow. It’s very, very affordable. I do feel like as the economy has been shifting and we’ve seen these markets that are affordable are still growing. That’s what we’ve seen in trend, even with high interest rates. So, I think it’s a great place to invest. You can get some really good cashflow out of it, but if you want to go check on your properties, bring your warm coats. I just like being warm, so it is not for me to live in.

Henry:
Don’t birds fly south for the winter? Are you sure your Seahawks would make it all right if you had an away game in Green Bay? They all going to be okay over there?

James:
I think the last one, it was six degrees. It was when their field goal kicker missed a 10-yard field goal. We went to the next round of the playoffs.

Henry:
Yes, because he was kicking a brick. That thing is cold.

James:
Oh, I will point out. I opted to not go to Green Bay for that game, but I went to North Carolina for that game because it’s a way better place to hang out in my opinion.

Henry:
I agree with you. I think the dynamics in terms of cashflow are there. I am not a big fan of cold weather either, and so I probably would not invest in this market just because of that alone. Don’t let my hatred for cold weather stop you guys from going out there and making money. I think great dynamics, population’s good. The only other concern I would have, is the economy going to be there long-term to support continued growth long term? If that’s there, I think you’ve got great market dynamics in a place like Green Bay.
I was really surprised to see, again the median age is only 38 years old. I would’ve thought it was an older market there as well, but goes to show what I know about cold weather places.

Kathy:
Well, I can say this is a place I want to visit because I do love cheese. I’ve been dying to go to Wisconsin for the cheese. James, I think you would like it in the summer. Just from everything I’ve read, it sounds like a really fun college town, and then at the sporting events. Just go in the summer, they have water there. It’s probably freezing that you won’t swim in it, but you’re not going to swim in California water either, I’m guessing.
Anyway, I would invest there too. Maybe a short-term rental because of all the visitors that come for, again, parents to come visit their kids in school or for the sporting events. Short-term rental could work possibly, but boy, I’d need to understand the market a little bit better in the rental market. It sounds like low rent for buy and hold. I don’t know if this is correct, but median monthly rent at 851, even though the home price is lower, so is the rent. So it may or may not make sense from a buy and hold perspective.

James:
Well, and the cost of cheese is going up too.

Henry:
So we shouldn’t invest in housing, we should invest in cheese.

James:
I mean it is going up. So there’s this economic stronghold, but I don’t know. I just can’t go to a football game and wear a cheese hat on my head. I just can’t. I’d have to become a Packer fan. I just can’t do it. I don’t look good in yellow.

Kathy:
I don’t look good in yellow, cool for the day. All right. That town’s not going to work for you, James. All right, well thank you all so much for joining us here On the Market. I hope you’re having a wonderful holiday. We look forward, so forward to seeing you in 2024.

Dave Meyer:
On the Market was created by me, Dave Meyer, and Kailyn Bennett. The show is produced by Kailyn Bennett with editing by Exodus Media. Copywriting is by Calico Content. We want to extend a big thank you to everyone at BiggerPockets for making this show possible.