The natural tendency for most investors I meet is to purchase real estate in their hometown. This is great so long as investing locally meets your "Why", "How", and "Who". Our first home in San Jose, CA grew from $700k in 2006 to $1.27M in 2020. We rented that home to a nice young family to create $500/mth of cashflow. The same equity in in KC makes $5k/mth.
If your goal is spend more time with family and make strong cashflow, you may not want to invest in the California coastline regions and manage the property yourself. Fixing toilets on the weekend instead of spending time with family is not why I began investing in real estate.
When selecting a market, understand your "Why" and "How" deeply to focus appropriately:
Fundamentals - Are others investing here? Is the city investing here? Should you?
Rent Rate Growth - Income growth should exceed expenses growth, if not, BE CAREFUL
Vacancy Rate - The % of your revenue you don't earn because the units are empty. Make-ready, turnover, construction, leasing period, leased but waiting for tenant to move in.
Jobs - Where do your tenants work? How diverse is the job market? Is it growing?
Rent-to-Value - If cashflow is important consider the price of a property versus one month income. If your 1:1 ... your on the right track, if your 0.9 : 1, your doing great.
Neighborhood - Access to schools, shops, work, freeways, parks, etc. Is there a strong community, neighborhood association, community?
Street - Is this the good street? Are there owners or renters? Crime? Is this changing?
The magic line - No one is making more land. Population is growing. People want to live in a clean, safe, and affordable neighborhoods. In every city lines are moving for the better and some for the worse. Buying on the affordable side of that line and letting the change pass through is a very effective way to increase rents, increase equity, and operate easier to manage tenants.
Once you know your "Why" and "How"choosing the right markets to operate can be the key determination of how effective your investment strategy will be.