New member needing help choosing a city for buy and hold rental.

6 Replies

I am new to BP (first post). I am looking to buy my first rental property. It most likely will be a SFH. Appreciation would be nice but I'm really looking to get the most cash flow for my investment.

I live in Loveland CO where the home prices are much higher than I would like to spend for an investment property and the rent I would get really doesn't seem worth it so I am looking out of state.  

I really need this first investment to go well to get the ball rolling.  Can anyone help me find an area that has a good cap rates and cash on cash return?  I'm overwhelmed trying to find a great area.  Any words of wisdom or help would be appreciated.  

I would like to find a property as close as turn key as I can. I don't have any experience working with contractors. I have a brother in law that lives in Oklahoma and invests right outside the OKC area. You can buy an incredible home for cheap but unfortunately you can also rent an incredible home for super cheap and there are tons of rentals available and homes for sale there. I don't feel like the ROI is there but I am a or at least it could be better in another area of the country.

Any input would be appreciated.

Thanks!

Michael

Just noticed my last sentence of my post did not make sense, please disregard it.  Replace it with:

I don't feel like the ROI is there but I'm not the most experienced at evaluating investment properties. I'm sure there are possibly better locations in the country for rental investments.

@Michael Blackwood You'll find the best cash flow and COC returns in the Midwest. Don't just look for affordable homes though. There's a lot of markets where you can find that but many of them have week economic and demographic trends. Look for markets with both good cash flow and strong population and job growth. Personally, I like Indianapolis and Kansas City. We've been active in both for several years now. I'd be happy to share my insights if you'd like. Feel free to contact me.

Originally posted by @Michael Blackwood :

I am new to BP (first post). I am looking to buy my first rental property. It most likely will be a SFH. Appreciation would be nice but I'm really looking to get the most cash flow for my investment.

I live in Loveland CO where the home prices are much higher than I would like to spend for an investment property and the rent I would get really doesn't seem worth it so I am looking out of state.  

I really need this first investment to go well to get the ball rolling.  Can anyone help me find an area that has a good cap rates and cash on cash return?  I'm overwhelmed trying to find a great area.  Any words of wisdom or help would be appreciated.  

I would like to find a property as close as turn key as I can. I don't have any experience working with contractors. I have a brother in law that lives in Oklahoma and invests right outside the OKC area. You can buy an incredible home for cheap but unfortunately you can also rent an incredible home for super cheap and there are tons of rentals available and homes for sale there. I don't feel like the ROI is there but I am a or at least it could be better in another area of the country.

Any input would be appreciated.

Thanks!

Michael

Welcome to BP! I always suggest Cleveland as a great market for OOS investments. Of course, it is all I really know as it is where I live/work. It is still pretty untapped. You can get a decent investment in the suburbs that will get you an amazing ROI!

Best of luck to you!

Tom Ott, Real Estate Agent in OH (#2016003865)
440-749-4043

@Michael Blackwood   Welcome to BP.  There are many good cash flowing markets where you can get at least 1% of purchase price in rent.  However as Mike says you also want to make sure the economic and demographic trends are in your favor.  It should also be an area you would like to visit from time to time, because that is what you should do in building and managing your rental portfolio. 

Larry Fried, Real Estate Agent in OR (#201211636)

@Michael Blackwood Welcome to BP! As others have stated the midwest generally has great cashflow. With that said, there may be other markets outside of the midwest that offer both cashflow (perhaps a little less) and upside appreciation. I would read several reports online and get an understanding of what's out there and then choose a market that fits. If you google "real estate report" and the city you're looking in that will give you a good starting point. Hope this helps and happy to chat at any point!

Hey @Michael Blackwood welcome to the BP community! I saw that you mentioned the Oklahoma City market in your post. I live in Oklahoma City and currently buy, sell, and invest in our market. There are great cash flowing rental properties in many locations around the metro area. As @Mike D'Arrigo said you don't have to just look for cheap properties. Although there are many areas where you can get massive COC returns due to a low purchase price there are also cash flowing properties at higher purchase prices that may be an easier property to manage. Many of my investors get great returns from their properties in all 4 corners of the city. It really depends on how much you are looking to spend and how much time and effort you (or your property management company) would like to spend on management.

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