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Moving to Rogers for Its Inexpensive Real Estate? 8 Ways to Be Successful

One of the biggest expenses in your life is going to be housing.

So naturally, many people are interested in finding the least expensive housing available.

Assuming all other personal finance factors in your life are equal, radically cheaper housing can help you save money, accumulate wealth, and generally live more comfortably.

Rogers, AR – and the NW region of Arkansas more broadly – is an area known for its low cost of living.

But if you’re moving to Arkansas or Rogers specifically for its inexpensive real estate, there are some strategies you’ll need to employ to be successful.

Moving to a Lower Cost of Living Area (Like Rogers, Presumably)

The cost of living in Rogers, AR, is 7 percent lower than the national average, and the cost of housing is 25 percent lower than the national average. If you currently pay $2,000 a month for your mortgage, and you live in an area that’s reflective of the national average, moving to Rogers could cut that to $1,500 a month for a very similar house. What would you do with an extra $500 a month?

If you live in an area that’s more expensive than the national average, the difference will be even more striking. Instead of paying $2,000 a month in a high cost of living area, you might be able to cut it to $1,000 a month or less for a similar place. That means you’ll end up with $12,000 a year that you can spend or invest as you see fit.

There are also peripheral benefits associated with the lower cost of living. The costs of many material items, including groceries and common services are much lower as well. This can make your money go much further and give you much more wiggle room in your budget.

It’s no wonder why so many people are interested in moving to a lower cost of living area, especially if they can work remotely.

Potential Problems With Moving to a Lower Cost of Living Area

However, it’s not all upside. There are also some potential problems associated with moving to a lower cost of living area.

  •         Lower income. If you work remotely and you’re going to keep your current job when you move, this point doesn’t apply to you. If you’re going to look for a new job in your new area, however, you need to be prepared for the possibility of accepting lower income. Lower cost of living areas can maintain lower prices and expenses in part because wages are lower. So while all your expenses, including your biggest expenses, might be significantly lower, your income might be proportionately lower as well.
  •         Potentially limited growth. It’s certainly possible to make a hefty profit from an investment in a low cost of living area – especially if you make efforts to pump up your home’s value. However, low cost of living areas tend to be low cost in part because of limited demand. You may not see explosive periods of growth in a low cost of living area like you might in a higher cost of living area; if you like to invest in potentially volatile real estate assets, you may not be able to find the investing climate that you prefer here. That said, there are always amazing investment opportunities to find in NW Arkansas – and there are plenty of neighborhoods poised for long-term growth.
  •         Higher spending. Some people, when they move to a lower cost of living area, become blinded by the increased spending power they have. Instead of capitalizing on savings, they end up spending more. After all, if the cost of a specific selection of goods is 7 percent lower, why not simply buy and enjoy 7 percent more? If you’re currently paying $2,000 for a mortgage and a similar house would cost you about $1,500 a month, why not buy a bigger house and keep paying that $2,000? This isn’t necessarily a bad approach, assuming your personal finances are otherwise on point. However, if you’re trying to save and invest more money, you need to be aware of this potential effect.
  •         Fewer amenities and opportunities. Some areas are expensive because they have amazing opportunities and amenities. They tend to be packed with high-profile, high-paying employers, as well as practically unlimited forms of service and entertainment. Lower cost of living areas are generally not as exciting. They have plenty to offer, and most people can live a happy, fulfilling life in these areas, but if you love the excitement of a dense, highly populated, bustling area, you might be in for some disappointments.
  •         Isolation. Similarly, lower cost of living areas are typically more spread out. You might face a longer commute, greater distance between you and your family members and friends, and less immediate access to some of your favorite hobbies and activities. These effects can be mitigated, of course, with some strategic planning in your move. But for many people, moving to a lower cost of living area comes at the price of isolation.

How to Be More Successful in Buying Inexpensive Real Estate

Here are just a handful of strategies to be more successful in buying inexpensive real estate and moving to lower cost of living areas.

  1.     Understand your options. Make sure you understand all the options available to you. Investing in real estate isn’t just about buying the primary residence; you can also buy rental properties in the area. And if you work with property managers, you may be able to manage those properties remotely, which means you wouldn’t have to move to take advantage of inexpensive real estate investing opportunities. Similarly, you aren’t just constrained to residential properties, nor are you constrained to any one geographic area. Taking advantage of local real estate dynamics and lower overall costs are strategies you can execute in myriad ways.
  2.     Do your due diligence. Always do your due diligence before making any major investment decision. Just because a house is similar in size and scope, but cheaper in price than your existing house doesn’t mean it’s a good deal. Too many people moving to a lower cost of living area get excited when they see a lower price tag, and they jump prematurely, ultimately paying too much for the area or ending up with a property that has issues associated with it. You owe it to yourself to work with a seasoned real estate agent, explore many different properties in the area, and really get to know the local real estate market before you invest.
  3.     Examine all the pros and cons. Make sure you consider all the pros and cons associated with any investments in your lower cost of living area. Is it really worth moving to a different geographic location? Are these properties really worth the money? What are you willing to sacrifice in order to access cheaper properties and goods? And what aren’t you willing to sacrifice in pursuit of your financial goals?
  4.     Choose the right neighborhood. Not all neighborhoods are equally worth your real estate investment dollars. Even in NW Arkansas alone, there are several prominent cities and even more neighborhoods that offer unique strengths and weaknesses to real estate investors. It’s easy to read an article online and understand that a large portion of a state is filled with inexpensive real estate, but the nuances of those local real estate markets are much more complex. Choosing the right neighborhood is important not only for your own safety, convenience, and opportunities (if you’re living in it as a primary residence), but also for your future growth potential. Optimize for good neighborhoods that still have a lot of room to grow.
  5.     Select your first property carefully. Breaking into a low cost of living area is challenging, especially if you don’t have much real estate investing momentum initially. But if your first property is a profitable, successful investment, you’ll have a much easier time scaling up your operation in the future. That’s why it’s so important to select your first property carefully. Look for something relatively safe and stable that seems like it’s going to support you for many years (if it’s a primary residence) or seems like it’s going to generate consistent net income (if it’s an investment property). It’s not always easy to delineate between a good property and a great property, so take your time evaluating the options, get to know the local market, and work with NW Arkansas real estate experts to get the inside scoop.
  6.     Plan for the long term. In all your decisions, you need to plan for the long term. This isn’t just a temporary movement to help you break out of the paycheck to paycheck cycle; it’s the first step in a long journey to building a better financial foundation. Accordingly, you can’t just look at properties as they exist today; You have to think about how those properties and the neighborhoods around them are going to develop. You can’t just think about this year and next year; you have to think about what’s going to happen in the next decades. No one can predict the future concretely, but long-term planners always end up ahead of short-term planners, given enough time.
  7.     Set a strict budget. When you first move to a lower cost of living area, everything is going to seem so cheap that you’ll be psychologically compelled to increase your spending. Even if you consider yourself non materialistic or more disciplined than average, it’s a good idea to set a strict budget for yourself. If you’re moving to this area to save money so that you can use that money for more productive things, you need to restrain the urge to overspend on non-essentials. Only by putting this in objective terms will you be in a position to exert control over this variable. Consider setting a limit equivalent to what you were spending before as the maximum allowable expenditure threshold.
  8.     Consider your portfolio (and its future). Finally, think about your investment portfolio more broadly. If you’re moving to Rogers, AR or if you plan to invest in real estate there, you’ll already have exposure to the real estate market. However, if you want more stable returns and less exposure to risk, you need to diversify your real estate holdings by investing in different types of real estate or real estate in different geographic areas. Additionally, you should have holdings beyond mere real estate, as the real estate market isn’t perfect and is associated with some disadvantages. For example, you can flesh out your portfolio by investing in assets like stocks, bonds, commodities, and alternative investments. This isn’t something you have to do right away, especially if you’re a young investor or if you have an especially high risk tolerance. But you should begin taking the first steps to making sure your portfolio remains diversified and balanced.

Moving to a lower cost of living area like Rogers, AR might be the perfect move for accumulating wealth and building your investments. But if you want to be successful here, you need to be aware of the potential downsides and strategic about your approach.

Ready to learn what Arkansas has to offer you?

Eager to talk to a Rogers, Arkansas real estate agent?

We’re waiting for you – reach out and let’s start the conversation today!

Derek Bryan
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