Please suggest some good rental markets

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Please suggest some good rental markets

Pinaki M.
Little Rock, AR · Member since 2016 · 36 posts · 12 votes

I just joined this site. I am a complete newbie and I'm a few chapters into "The Book on Rental Property Investing" by Brandon Turner. My goal is to buy some properties and rent them out for cash flow. Now the problem is, I live in the San Jose, CA area where the current prices are out of my reach. Recently I have been told that for my current job, I am allowed to work remotely from anywhere in the county. This opens up a lot of possibilities. I have been thinking of moving out of California to another state where I can get better ROI than CA. My plan is to move to this place, buy a property or two and manage them myself.

So my question is, what cities/town/states should I consider where I can get a decent ROI? For starters, let's assume that I am open to moving anywhere in the country where prices are relatively cheap and where I can get good returns.

All suggestions and advices will be greatly appreciated. Please help me out. Thanks!

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Al Williamson
Rental Property Investor · Sacramento, CA · Member since 2011 · 2k+ posts · 1k+ votes
10y


Wow @Pinaki M. you've got a winning opportunity.

But I want to expand the discussion a bit. Before you move, you need to have your "why" well defined. Why do you want this cash flow? Is it be happier?

If so, that really tells you that you should move to somewhere that makes you happy.

Real estate markets change all the time. Things go wrong no matter how smart you are. You don't want to be stuck somewhere and doing something that makes you unhappy.

So, start with the end in mind. Then pick locations that meet your "why". Then pick investments that you would be happy with even if (and when) things go sideways.

Best to you. And I hope "Murphy" never visits you.

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  • Tekla DeMercado
    Sacramento, CA · Member since 2016 · 18 posts · 5 votes
    10y
    Originally posted by @Nathan Astrup:

    I actually really like living in CLE and my cash flow is great. I don't buy for appreciation.

     I feel you Nathan, why everyone dissin your town? Go Cavs :)

    1Reply
  • Carl Jackson
    Wholesaler · Colorado Springs, CO · Member since 2016 · 20 posts · 5 votes
    10y

    The Buy and Hold for appreciation hurt many investors during the last recession. It was very speculative. Purchasing (or controlling) a property with no money out of your pocket is very safe. Net rents of $100 are great when the investment is zero. With that being said, I would not start off with "buying" rentals, especially in an area more than 50 miles away. Obtain properties 'subject-to' and lease option them. If done correctly, zero money out of pocket, hefty lease option fee to you, higher monthly net ($300+), better tenants and no financial recourse in case of bank default. This is the simplified version.

    As for which market is best? Look east of the Mississippi River and the Rust Belt. However, start locally and learn how to work remotely. Then, experience will help you see that any market you live in is great.

    0Reply
  • Susan Maneck
    Investor · Jackson, MS · Member since 2014 · 1k+ posts · 769 votes
    10y

    I think you would be hard-pressed to find a higher higher yield value on real estate than Jackson, MS. Foreclosure rate is still 10% which makes the properties ridiculously cheap. You can buy a 3bdrm 2ba house with a two car garage on a quarter of an acre lot for 30-35K and rent it for $850. 

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  • Norberto Villanueva
    Real Estate Consultant · Colorado Springs, CO · Member since 2013 · 325 posts · 117 votes
    10y

    Nathan said it right, "don't buy for appreciation". You make your money when you buy. So if you are buying for cash flow, make sure to factor maintenance, sundry expenses including management and other fees, not just acquisition costs into the equation. Appreciation is just the icing on the cake, the atta boy for a job well done.

    Buying in the various "hot markets" can be a fool's errand without a strong local team in place so learn the game in your own backyard. Where I agree with Elena's assessment of the Denver market, Colorado Springs presents infinitely better buy and hold than flip opportunities, especially on the MLS.

    0Reply
  • Mark Radford
    Investor · Indianapolis, IN · Member since 2013 · 80 posts · 64 votes
    10y

    Disagree with above poster about "75%" of neighborhoods inside the 465 loop being bad.  Broad Ripple, Meridian Kessler, Warfleigh, Butler-Tarkington and nearly every neighborhood south of Fall Creek have some of the highest earning residents in the state. Fountain Square is hot right now. There are still properties of all types in town but you have to dig!!  That's the name of the game isn't it? We're close to $1500/side for a 3/2 duplex in town. True it's easier to buy outside the loop but I don't see cash flowing a couple hundred bucks a month with a $70k - 150k exposure as a great deal, especially with little appreciation.  What's the exit strategy after the next downturn? There isn't good public transport outside the loop. Those folks MUST own/maintain at least one car. Best retail/restaurants/entertainment /jobs inside the loop IMO. Everything is happening in the city. Buy turnkey as  cheaply as you can outside the loop because you may get stuck with it for a while. Inside the loop buy the worst property in the best neighborhood like every place else. Flip or rent.

    0Reply
  • Chris T.
    Investor · Downers Grove, IL · Member since 2015 · 1k+ posts · 955 votes
    10y

    You will find real estate investors in every market out there. The most important question is where you want to live, where your family and friends are. If you move to an area with excellent schools, and companies, there will always be a demand.

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