Whats your favorite rental market?

5 Replies

Hi all! I tried searching this topic and didnt really find many new posts on it.

I am looking to buy out of state rental property (I live in NY). I currently have a bunch of places in mind but need to narrow it down so I can get going investing!

What are some of your favorite markets to invest in rentals? What kind of cashflow are you getting? What CoC ROI do you look for in your market?

Also what are the major things you look for in identifying your first or next real estate market? 

@Eric Telese  

I am currently focused on multifamily investing in DFW.  Here are a few things that position Dallas for continued growth and would help me to identify other markets for investment.

  • Strong job and population growth. 
  • Corporate headquarters relocating from across the country to DFW. 
  • Diverse industries - Finance, airlines, oil & gas, etc
  • Limited geographic barriers to new development & economic success
  • Large institutional investment across MF, retail, office and industrial.

I don't want to just answer with articles, but I've written a couple that speak directly to what you are asking.

For thinking of what markets to start with in general-

https://www.biggerpockets.com/renewsblog/out-of-st...

For general things I look for in markets-

https://www.biggerpockets.com/renewsblog/2014/02/2...

Then for current markets today, I work with turnkeys specifically (but the turnkeys tend to follow the cash flow) but right now I like Chicago, Baltimore, Philly and St. Louis for those. All solid growth markets, good market fundamentals, solid cash flow. Baltimore is the highest cash flow around 8-11%, standard turnkeys are running about 7-9%. But those cap rates are all turnkeys...if you're wanting to put work into something, it may be higher. 

Reach out anytime if you want to chat. I live in LA so same problem as NY and I've only invested in out-of-state rentals because of it.

@Eric Telese , you want to have a very specific goal. Are you looking only at cash flow, and what type of markets: A, B or C? 

An A and B market would grow in value a lot, therefore you'll get a lot more equity, a C neighborhood will have the best cash flow, however, the management will be more expensive and more time consuming and less equity growth. 

I will say get clear on your goals, and then it will be easier to narrow the markets!

I love Chicago of course, as I know it best, however, for you, it has to be a place where you want to go to visit once in a while and a city with enough inventory and turn over to get good tenants and price increases.

Good luck to you!

You bet! Reach out if you come up with any questions!

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