HMW #138: 3 Must Haves for Every Investor Buy-Box
Jan 24, 2024
Read Time: 4.5 minutes
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You want to invest in real estate. You're told to begin with a clear buy-box, the parameters for your investment home search. But why?
A buy-box is a great way to avoid the noise of all the various types of investments allowing you to focus and create a niche for yourself. And thus, quickly build an expertise in one area that will give you the confidence to take action in your investing goals.
If you need help to jump-start on creating your first buy-box, a great way to start is using my three must-haves that I include in every long-term rental buy-box that I (Alan) have ever used.
Can you give me 5 minutes to run through it?
Appreciate it! I know you don't have time for too much of my bullsh*t today.
Must Have 1: Growing population
Nothing creates rental demand like more people than homes. A positive migration of residents also greatly contributes to fast-growing equity in your home.
And this is the simplest information you can source. If you want to nerd out on population, head over to:
However, I usually just let the internet do the work for me based on 3 seconds of research by Googling "[city name] population growth" and I immediately get a population trend chart like this:
Then, I play with the nice pretty graphs giving me an answer if this is a good place to start investing. Of course, not all trends will stay on the trajectories shown, but it's a good place start to determine where you may want to invest your money long term.
Perfect! Now, it's also important to add criteria 2 to your same buy-box to understand what really drives an inflow or outflow of population to a city or town.
Must Have 2: Diverse economy
Detroit's population tanked when the car factories moved overseas. There were no other major industries in the city to provide jobs for, so people left. Prices plummeted.
I don't want to invest anywhere were this may happen again, so I invest in towns and cities where there is not one industry providing 50% or more of the jobs.
In big cities, you can Google "[city name] economy" and you get Wikipedia pages of great data at your finger tips. Here's Atlanta again, as an example:
For smaller cities that don't have their own Wikipedia page, I research data aggregators looking for diversity of industry:
All your answers on this are just a click away.
Great! You are officially creating the skeleton of a buy-box now and starting down the path of investing. This is a big first step!
Must Have 3: Two hours max drive to a large airport
Commuting is and will always be important. It used to be the properties closest to the river ports where the most in the demand. Then it was the train depot. Then it was bus stops. Then it was highway exits.
Now with work from home becoming commonplace, the airport will reign king as the main form of transportation when the need arises to have to commute to in-person work meetups, conferences, or onsite client visits.
Plus, all large companies looking to create a home base and hire a lot of talent will need to be near a airport to run their nationwide business, and they aren't going to be further than two hours from a major airport. And you do want to invest where large companies are investing, because that increases both population and economy diversification (see 1 and 2 above).
You'll get the most commercial development and government funding for parks and more being within a 120-minute commute to a urban city core that has an airport.
And of course, Google Maps helps narrow your search criteria for towns like this as well in under 3 seconds.
Knowing what I just explained, are these must haves something you can handle in your buy-box?
Sweet! You are my most start-student today. Glad to make this easy for you! And happy property hunting.
Summary
- Population growth is a huge driver to real estate success
- Economy options keeps population stable
- Airport proximity provide huge upside
- Buy-box building is key