Best city to buy rental properties right now?

22 Replies

I am looking to buy a new investment property out of state as the California real estate market is becoming very competitive and doesn't make sense numbers wise.  Looking for good returns on rental property for long term growth as well. Quick to rent out. Where should I look into to? 

In Nampa Idaho, you can buy $100k houses that rent for $750 to $800 all day long.

@Ali Boone I live in the Philadelphia area but have just started investing in the Cleveland market.  What areas of Philly are you most attracted to?

Did somebody say Cleveland?

There are many cash flow markets in the Midwest. Cleveland, Toledo, Dayton, Kansas City, Birmingham, Indy etc...

The important thing is to learn the dynamic of the market you choose to buy in. Understand the difference between a B & a D neighborhood and what type of tenant you will get when buying in each.

James Wise, Real Estate Agent in OH (#2015001161)
216-661-6633
Originally posted by @James Wise :

Did somebody say Cleveland?

There are many cash flow markets in the Midwest. Cleveland, Toledo, Dayton, Kansas City, Birmingham, Indy etc...

The important thing is to learn the dynamic of the market you choose to buy in. Understand the difference between a B & a D neighborhood and what type of tenant you will get when buying in each.

Boom James :)

Thanks

@James Wise  Do you steer clear of D areas or do you go in eyes wide open knowing what to expect?

I own in the St Loius and Kansas City markets and they have great numbers. You might also want to research the Toledo area. The key is getting a good property manager. If the first pm doesn't work out then don't be afraid to get rid of them very fast.

Gordon Cuffe, Lender in CA (#1037464)
916-261-2381

thank you all for the great replies. Should you need any tips on the Los Angeles market, I can help as i have done well for myself here.. 

If you would like to discuss the Kansas City market feel free to look me up and give me a call. Depending your needs I may be able to help or point you in the right direction. 

Originally posted by @Teresa Ludlow :

@James Wise  Do you steer clear of D areas or do you go in eyes wide open knowing what to expect?

Mostly avoid. I have a few properties in D areas that do ok for me but just a pain I don't want to do with. To many other ways to make money in this biz then deal with that non-stop.

James Wise, Real Estate Agent in OH (#2015001161)
216-661-6633

@Teresa Ludlow In my opinion, unless you are local and self managing, D class properties will kill you. All having your "eyes wide open going" in does is let you see your profits go up in smoke. Someone who is local and managing themselves can reduce the high turn over costs but when you're out of state, you can't do that. I always recommend that out of state investors by C or better properties.

@Roy Lhanie

You've got some great responses here but I want to echo the need for great property management when you're investing out of state. I own out of state rentals in Indianapolis, Toledo, and Cleveland and my property managers have been key to the success of my properties. I've also seen where slow action and responses from a property manager has cost me money.   Get some referrals from folks already investing in the areas you're interested in and interview all of them. See who you connect with and check out their properties. Best of luck!

Welcome to BP @Roy Lhanie !

All great advice above.

I assume you have already looked within 2 hours of LA with no luck?

If so, then you need to look at the Midwest - particularly Indianapolis [yes, I'm a little biased].

One can find solid B-/C+ properties in great blue collar neighborhoods for around $65k [with recent full rehab] that rent for $800.  Our taxes are decent and we are a business, and landlord, friendly State.

With our lateral market, you won't get the steep appreciation [and depreciation] like other markets but instead will enjoy stable, long term cash flow.

Of course, like with any property, the team on the ground is key.

- it's always good to see another investor utilizing this great site!

Of course, you need to read The Ultimate Beginners Guide to REI here on BP

If you haven’t already, please read/listen to these books ASAP!

Flip2freedom episode 77[http://www.flip2freedom.com/a-3-step-formula-to-a-successful-balanced-and-insanely-profitable-2012/] - podcast - LISTEN TO THIS TODAY!

Rich Dad Poor Dad

Rich Dads Cash Flow Quadrant

Rich Dads Increase your financial IQ

The Real Book of Real Estate

The ABC’s of RE Investing

The ABC’s of PM

Rich Dad RE Tax Advantages

The 10X Rule

The E-Myth

The 4 Hour Work Week

BiggerPocketsPodCast -I hear #136 is exceptional!

Wholesaling101 You Tube Channel

Kent Clothier – You Tube Memphs Invest channel

Roy,

I highly recommend chicago and the Chicagoland suburbs. I sell for example large 4 bed single family homes that get HUD guaranteed rent at $1900 per month that I sell for $145k. These are B market locations in south suburbs. Take a look.

@Roy Lhanie   I say Birmingham.  Inventory is still decent.  And the numbers are still the best in the country.  Lower purchase prices are awsome for beginners with limited finances making it a great market to get your start.  

We've also been purchasing in Cleveland. I find the city very unique

@Roy Lhanie

Hi Roy,

I invested out of country last year in Jacksonville, Florida in a subdivision called Murray Hill. On the deal, I partnered with someone but locating the area to invest in, I used my own due diligence process which I outlined in this BiggerPockets blog post:

Out of State Investing?

It includes tools I used, resources, and even some goal setting and has a bunch of screenshots to help understand the process. 

You might shortcut the whole finding a place by working with people on BP, but for me, at least for my first deal, I wanted to learn as much as I could on my own first.

I am down south in Florida. Miami is great for rentals right now, also look into Broward County. The rents are on the rise. Reach out to @Nick Britton also, he's a great resource here in South Florida. If I can be of assistance please do not hesitate to contact me either. Good luck! 

Yasmine Bisumber, Real Estate Agent in FL (#3340998)
(954) 744-0013

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.