The Best Cash-Flowing Real Estate Market in Each State

The Best Cash-Flowing Real Estate Market in Each State

3 min read
Brandon Turner

Brandon Turner is an active real estate investor, entrepreneur, writer, and podcaster. He is a nationally recognized leader in the real estate education space and has taught millions of people how to find, finance, and manage real estate investments.

Experience
Brandon began buying rental properties and flipping houses at the age of 21. He started with a single family home, where he rented out the bedrooms, but quickly moved on to a duplex, where he lived in half and rented out the other half.

From there, Brandon began buying both single family and multifamily rental properties, as well as fix and flipping single family homes in Washington state. Later, he expanded to larger apartments and mobile home parks across the country.

Today, Brandon is the managing member at Open Door Capital, where he raises money to purchase and turn around large mobile home parks and apartment complexes. He owns nearly 300 units across four states.

In addition to real estate investing experience, Brandon is also a best-selling author, having published four full-length non-fiction books, two e-books, and two personal development daily success journals. He has sold more than 400,000 books worldwide. His top-selling title, The Book on Rental Property Investing, is consistently ranked in the top 50 of all business books in the world on Amazon.com, having also garnered nearly 700 five-star reviews on the Amazon platform.

In addition to books, Brandon also publishes regular audio and video content that reaches millions each year. His videos on YouTube have been watched cumulatively more than 10,000,000 times, and the podcast he hosts weekly, the BiggerPockets Podcast, is the top-ranked real estate podcast in the world, with more than 75,000,000 downloads over 350 unique episodes. The show also has over 10,000 five-star reviews in iTunes and is consistently in the top 10 of all business podcasts on iTunes.

A life-long adventurer, Brandon (along with Heather and daughter Rosie and son Wilder) spends his time surfing, snorkeling, hiking, and swimming in the ocean near his home in Maui, Hawaii.

Press
Brandon’s writing has been featured on Forbes.com, Entrepreneur.com, FoxNews.com, Money Magazine, and numerous other publications across the web and in print media.

Follow
YouTube
Instagram @beardybrandon
Open Door Capital

Read More

Join for free and get unlimited access, free digital downloads, and tools to analyze real estate.

Knowing you want to invest in real estate is great. But knowing where to invest in real estate is the tough question.

I want to help you identify a potentially great rental market in your very state. At BPInsights, we compare the rent-to-price ratio (the RTP) to figure out the best cash-flowing markets in every state across the country. You can find all 50 at biggerpockets.com/bpinsights or get a sneak peek of 10 of those top markets below.

But before we get started…

What Is Rent-to-Price Ratio?

Now, rent-to-price ratio is super easy to calculate. You’re basically dividing the median rent by the median home price in that market.

Median Rent / Median Home Price in Market = Rent-to-Price Ratio

So, for example, let’s pretend in Warwick, Rhode Island, you can get $1,000 a month in rent. And let’s say the median home price is $100,000. (Disclaimer: I have no idea if this is true.) That’s basically 1%.

1,000 / 100,000 = 0.01 = 1%

Voila! It’s that easy.

Now, it’s not an exact science. This equation, though, will help you see the likeliness of a property to cash flow compared to others.

Related: Top 5 Real Estate Investing Markets for 2020

I mean, think about this way: If a property costs a million dollars to buy and it only rents for a thousand bucks a month—I think one-tenth of one percent—that’s never going to cash flow.

But if a property you could buy for $100,000 also rents for $1,000 a month, it’s literally the same rent for 10 times the purchase price—a much higher likelihood of cash flow.

Notice here the word “likely”—it’s not guaranteed cash flow. We’re using median numbers. And it’s important you run your own analysis—actually do your numbers—to make sure your specific deal is a good investment.

Furthermore, rent-to-price ratio doesn’t take into account taxes. They change depending on location. Or insurance cost, which can change. Nor does it take into account vacancy or the quality of the tenant or the future appreciation. I mean, this is just a good starting point toward finding cities that may provide great cash flow for you.

How BPInsights Can Help Guide Your Investments

On BPInsights, we go into the actual list of each market in all 50 states. But also, understand that you can do this analysis yourself—and a whole lot more—for any market you’re looking at by using the rent estimator tool (free), or even better, the Property Insights tool on BPInsights (available to Pro and Premium members). Just go to biggerpockets.com/bpinsights to check out all the cool features. You can even download the sales data and all sorts of other good stuff there.

It’s a new service from BiggerPockets designed to help you identify the best markets, the best neighborhoods, the best properties for your future. And it’s led by a team of data scientists, who help make sense of a lot of big data so you can apply it to your investing. It’s part of our membership at BiggerPockets. So, if you haven’t checked it out yet, definitely check it out.

Successful investing requires accurate, easy-to-understand information about your properties and the markets you invest in. BPInsights gives you the information you need to find your next great deal and maximize your current investments—from expert analysis to proprietary data sets. Start leveling up your investments today.

10 of the Top Investing Markets in the U.S. by Rent-to-Price Ratio

But just in case you’re not a Pro member and you don’t want to do it on your own, let me give you a sneak peek of 10 of the 50 top markets now.

And of course, 2020 is a total anomaly of a year. So, to mitigate the kind of weird fluctuations caused by the pandemic, we’re going to average the median sales price from February to April to try to get a better sense of the true median price.

With that said, here is the list:

  1. Mobile, Alabama
  2. Eagle River, Alaska
  3. Sun City, Arizona
  4. Benton, Arkansas
  5. La Quinta, California
  6. Commerce City, Colorado
  7. New Haven, Connecticut
  8. Wilmington, Delaware
  9. Fort Pierce, Florida
  10. Jonesboro, Georgia

You can find the rest at biggerpockets.com/bp-insights.

Related: 3 Indicators of Strong Real Estate Markets in Today’s Economy

And leave me a comment below! Tell me whether you agree with this list. I mean, the data doesn’t lie, but as I mentioned earlier, ren- to-price ratio does not take into account all the changes and expenses in different areas, nor the crime or the appreciation potential.

But if you’ve been looking for cash flow in your market, I think one of these cities would be a good place to start.

Featuring unique data, tools, and expert analysis, BPInsights will give you the confidence you need to seriously transact on real estate deals—no matter your strategy or experience level. Check out BPInsights at biggerpockets.com/bp-insights

Questions? Comments?

Join the discussion in the comment section below.