What do Hughes Capital and Inc. magazine have in common?

We both have identified and agreed on some of the best cities in the U.S. — a few of which might come as a surprise, though we already had a pretty good idea of the virtues of several of the cities – six of them, to be exact.

Forget Silicon Valley.  The most exciting innovations in agtech are happening in Inc.’s #33 city (and one of our purchasing cities), St. Louis.  (Photo credit: Daniel Schwen)

Inc. and Startup Genome recently partnered to score and rank the top 50 U.S. cities on the rise, or “surge cities” as they’re called, based on seven key indicators like job creation, population, increased startup activity, and entrepreneurial presence.

Using our own strict set of criteria, we also “score and rank” cities in which our buy and hold fund purchases residential real estate for its investor portfolio.  As it turns out, six of our nine carefully selected portfolio cities are included on Inc.’s top 50 hot spots.

Here are the cities from our buy and hold fund portfolio (and the top industries associated with each) as they are ranked on Inc.’s Top 50 Surge Cities list:

  • #33 St. Louis, MO (agricultural tech startups)
  • #37 Birmingham, AL (health tech and data security startups)
  • #40 Kansas City, KS (health care and Hallmark)
  • #43 Louisville, KY (age-related businesses, the Kentucky Derby, and UPS)
  • #47 Memphis, TN (logistics, tech startups, health care, and of course music, BBQ, and whiskey!)
  • #48 Cleveland, OH (health tech)

How does this affect our portfolio of homes?

The most effective way for us to stress-test the assets in our buy and hold fund is by determining how much (if any) we would need to lower rents if the local economy took a dive or in the unlikely event that a major employer were to leave.  Having our fund’s portfolio cities included in this Top 50 list of newest hot spots in the U.S. (not the most expensive!) serves as confirmation that these metropolitan areas have something unique and valuable to offer, and it reinforces the likelihood that our portfolio of properties will remain a solid investment for many years to come.

Although home values in the affordable pricing band (our target home-buying category) generally remain consistent throughout the years and across most economic cycles, the overall growth will likely benefit residents and businesses city-wide.

And remember, the safety measures we have in place – a cash flow rental model that is diversified across hundreds of homes in several cities within one of the most stable housing categories in the U.S. — are a big help in keeping investor returns consistent, regardless of the economic activity in one or more cities.

Inc. did a fantastic job putting together a fun, interactive article that lists all 50 cities and what makes them such a friendly environment for new businesses.  Click here to view it online.

What do Hughes Capital and Inc. magazine have in common?

We both have identified and agreed on some of the best cities in the U.S. — a few of which might come as a surprise, though we already had a pretty good idea of the virtues of several of the cities – six of them, to be exact.

Forget Silicon Valley.  The most exciting innovations in agtech are happening in Inc.’s #33 city (and one of our purchasing cities), St. Louis.  (Photo credit: Daniel Schwen)

Inc. and Startup Genome recently partnered to score and rank the top 50 U.S. cities on the rise, or “surge cities” as they’re called, based on seven key indicators like job creation, population, increased startup activity, and entrepreneurial presence.

Using our own strict set of criteria, we also “score and rank” cities in which our buy and hold fund purchases residential real estate for its investor portfolio.  As it turns out, six of our nine carefully selected portfolio cities are included on Inc.’s top 50 hot spots.

Here are the cities from our buy and hold fund portfolio (and the top industries associated with each) as they are ranked on Inc.’s Top 50 Surge Cities list:

  • #33 St. Louis, MO (agricultural tech startups)
  • #37 Birmingham, AL (health tech and data security startups)
  • #40 Kansas City, KS (health care and Hallmark)
  • #43 Louisville, KY (age-related businesses, the Kentucky Derby, and UPS)
  • #47 Memphis, TN (logistics, tech startups, health care, and of course music, BBQ, and whiskey!)
  • #48 Cleveland, OH (health tech)

How does this affect our portfolio of homes?

The most effective way for us to stress-test the assets in our buy and hold fund is by determining how much (if any) we would need to lower rents if the local economy took a dive or in the unlikely event that a major employer were to leave.  Having our fund’s portfolio cities included in this Top 50 list of newest hot spots in the U.S. (not the most expensive!) serves as confirmation that these metropolitan areas have something unique and valuable to offer, and it reinforces the likelihood that our portfolio of properties will remain a solid investment for many years to come.

Although home values in the affordable pricing band (our target home-buying category) generally remain consistent throughout the years and across most economic cycles, the overall growth will likely benefit residents and businesses city-wide.

And remember, the safety measures we have in place – a cash flow rental model that is diversified across hundreds of homes in several cities within one of the most stable housing categories in the U.S. — are a big help in keeping investor returns consistent, regardless of the economic activity in one or more cities.

Inc. did a fantastic job putting together a fun, interactive article that lists all 50 cities and what makes them such a friendly environment for new businesses.  Click here to view it online.