A YouTube monologue (Dec 9, 2023) advising real-estate investors to avoid markets heavily tied to commodities or military bases due to volatility. The speaker warns that small towns (example: ~9,000 people) where ~30% of employment depends on a mine (zinc/tungsten) make roughly one-third of the economic base vulnerable, risking rental income stability for properties like fourplexes.
I generally avoid markets that are really rich in commodities or have a big part of their economic base be tied to the military, because those things are volatile. I mean, military involvement that can fluctuate a lot based on presidential administrations and then commodities. Just imagine, one of the worst markets for me to invest in at all would be a small ho dunk town of 9,000 people. That's not close to an MSA where 30% of that town's employment is tied to the zinc mine or the tungsten mine. Because now 1 1/3 of the economic base of that community is tied to the fortunes of zinc or of tungsten. Well, if I'm going to buy property there or say a fourplex, I need to have it filled with rent paying tenants, and that income needs to come from a stable economic base.
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