Buying a rental in the right market
Plenty of investors buy close to home, which is often where the math breaks. Ron Phillips tests any market on rent, growth, and holding costs, and Patrick Roach, who scores markets for a living, joins him for Q&A.
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Let the math pick the market. Then solve for distance.
Most investors start with the market they can drive to, or the one a headline called hot. The first is habit and the second is last year's price move. Neither tells you whether today's rent covers today's price, whether jobs and people are arriving, or what the property costs to hold. Answer those first. For plenty of investors, they point somewhere else.
Run any market you're weighing through the first three. If it passes, the fourth comes down to who you hire.
The questions Ron answers
Does the rent carry the price?
Divide a property's monthly rent by its price. Below about 0.7%, rent struggles to cover operating costs. A $200,000 property needs at least $1,400 a month to clear the bar, and San Francisco, Chicago, and Seattle trade at 0.3% to 0.5%.
Illustrative example. Actual returns vary.
Is the market actually growing?
Look at job creation over the past five years, and at whether the population is growing faster than the national average. Population gains of 1% to 2% a year on a diverse employment base are a tailwind. Net out-migration is the warning that overrides everything else.
What does it cost to hold a property there?
Property taxes run about 2.5% of a property's value in New Jersey and 0.4% in Alabama. Insurance moves with hurricane, wildfire, flood, and freeze exposure. Then check eviction timelines, deposit caps, and rent control, which vary just as widely.
Lineage is not a tax advisor. Talk to your CPA about your own situation.
Who runs the property when you're not there?
The property manager matters more than any other hire on a remote team. Ask about their screening process, their turnover rate, and their rent collection percentage. Self-managing from three time zones away is how a good property turns into phone calls at midnight.
How do you vet an out-of-state property?
Build the pro forma on rent comps from the past six months, not the seller's number. Walk the street on Google Maps and confirm the neighborhood allows rentals. Pull the tax history from the county assessor, since some states reassess after a sale. Then hold six months of fixed expenses in reserve.
Lineage is not a tax advisor. Talk to your CPA about your own situation.
Live Q&A
Then we open it up and answer your questions live.
No pitch, no upsell, and no property pushed at you at minute 25.
What this session is not
Ron Phillips, CEO of Lineage
Ron has spent more than 20 years buying rental property and helping other investors do the same. He has built six companies, one of which landed in the top 25% of the Inc. 5000. He is a national speaker and a best-selling author. He still owns rental property, which is why this session sounds like a conversation with a peer and not a seminar.
He spent those years as the connective tissue between the brokers, lenders, insurers, and property managers who each hold one piece of a deal. In 2024 he co-founded Lineage to put those pieces in one place.
Save your seat
We’ll send your join link and a calendar invite. No spam, and you can opt out anytime.
Lunch & Learn runs every other Thursday at 1pm ET / 10am PT. Every session is 30 minutes, ends with live Q&A, and is free to attend.
Next up is The 1031 clock: 45 days, 180 days, on Thursday, November 5.
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Common questions
Yes. Free to attend, free to watch later.
30 minutes, plus time for questions at the end.
No. Register and we’ll send the recording. Live is better if you want to ask Ron something directly.
It’s built for investors who already invest and are deciding whether rental property earns a place in the portfolio. If you’ve owned property for years, you’ll still get the math. You won’t get talked down to either way.
No catch. Lineage makes money one way, a flat $749 when you buy a property through us, and only when you close. This session is education. If you want to talk to someone afterward, you can. If not, watch and go.
Yes. We save time at the end for live Q&A.
Can’t make it live? Register anyway.
We’ll send the recording straight to your inbox.