Should I stay away completely or take it as a case by case scenario? Some cities I’m looking up are only showing a .07% population decrease for example. Could that still be ok if the remaining due diligence worked out?
Do not despair if a city shows a declining population – this is becoming the norm for much of America. The answer is simple: households are becoming smaller. The two biggest segments of the U.S. population are the Baby Boomers (aged 50 and up) and the 20 year olds. The Boomers are losing spouses to mortality, and the 20 year olds have moved out of the house. The key item to watch for is % of vacant housing. That’s the killer. As long as the housing unit is occupied, it should not matter to you if it’s got one person in it rather than four. But when you start to see high percentages of vacant housing units, then you’re in trouble. The U.S. average on vacant housing in a market is roughly 12%. Anything that amount and under is probably fine. But if you’re looking at a market with greater than that vacant, it may imply that people are leaving due to lack of employment or an unsafe area. That would mean death to your park investment potentially.
Thanks Frank! I’ll start looking at those numbers closer