Flipper/Rehabber · Orlando, FL · Member since 2008 · 263 posts · 147 votes
I was wondering where the best potential for "sustainable" cash flow properties. We are currently looking at Indianapolis and Phoenix (SFH prices are low, economy is OK, and rents are reasonable). I was just wondering what other markets in the US have the potential for sustainable cash flow on rental properties over the mid-term.
Not sure if this is too general a question - but interested in all of your insights.
Thanks,
Greg
Mike M- your list is pretty generic and I think from a mag, isn't it? I personally have concern about Salt Lake (and I'm Mormon!), and Maricopa, AZ.
The list also is missing the # 1 area in the nation in my mind. So Texas for SO many reasons. I'm putting my money where my mouth is. I also like low priced homes in SW FL. Rich
The "sustainable" part of your question changes things a bit doesn't it? The area should have job growth, and especially long-term population growth trends. You might look at FL and Las Vegas. Yes they've hit the brakes on growth, but that's probably an aberration in the macro-trend.
Jon,
You got my post exactly - I am really trying to work out where the current "economic impact" and the cash-flow equation works best. Sometimes short term gain = long term pain. A robust economic base for a community can support cash flow over time.
Thanks,
Greg
Tampa has been through the ringer over the past couple of years - from what I understand the rental market has been pretty depressed and the quality of tennant pool has diminished considerably. If you look at the economic trends Tampa has taken a big hit.
However, the economic makeup of the employers in the Tampa Bay market is very diverse - Raymond James, MacDill AFB, ValPak, Techdata etc.. so it will come back. Also, the "investor tallent" down here is pretty strong so there is some good leadership within the REA's to take advantage of the trends.
However, I am buying out of State.. so that says something!!
Greg
Out here in California, the Inland Empire (Riverside and San Bernardino Counties) is where home prices are low enough with strong enough rents to have a small positive cash flow to start with good upside potential. For example, the house we bought last year Murrieta for $155k sold just a few years ago in the high $300's.
I would exercise caution in Phoenix. Arizona's recent law enforcing federal immigration regulations is apparently causing many illegal aliens to flee from the state. That's resulting in vacancies adding up on a daily basis. I heard one landlord with about a dozen units recently had 7 families move out! Yikes!
Ouch! We just finished rehabbing three properties in Phoenix and hope to get them under contract this weekend.
The thing we liked about Phoenix is that employers like Charles Schwaab were expanding their operations in the market. It gave us a good indication of a sustainable economy.
The thing we liked about Phoenix is that employers like Charles Schwaab were expanding their operations in the market. It gave us a good indication of a sustainable economy.
I'm sure the Arizona economy will be just fine in the long term. There is simply a reshuffling going on right now with the work force. I don't think many illegal aliens are employed at Schwab. :mrgreen:
The Puget sound area of Washington has very sustainable growth, but finding SFHs that make sense is time consuming. Opportunities are out there and long term they are a great investment. I have built a decent portfolio over the last 20 years.
If someone is renting to illegal aliens, then they deserve the vacancy. As far as I am concerned, it is just as bad to rent to them as it is to hire them. Illegal is ILLEGAL.
As for areas, D/FW, T/OC and Phoenix are the areas I like right now.
1. Dallas-Fort Worth-Arlington,Texas
2. Houston, Texas
3. Tulsa, Okla.
4. San Antonio, Texas
5. Salt Lake City, Utah
6. Phoenix, Ariz.
7. Indianapolis-Carmel, Ind.
8. Denver-Aurora, Colo.
9. Oklahoma City, Okla.
10. Charlotte-Gastonia-Concord, N.C. / S.C.
11. Ames, Iowa
12. Des Moines, Iowa
13. Southaven, Miss.
14. Killeen, Texas
15. New Orleans, La.
16. Madison, Wis.
17. Midland, Texas
18. Maricopa, Ariz.
19. Little Rock, Ark.
20. Nashville-Davidson-Murfreesboro-Franklin, Tenn.
Link no longer works.
Yes, Tulsa/Oklahoma City.
I only personally manage one rental, all my other rentals have management companies, so I don't have to check residency status. But I do ask for a Driver's License and Social Security Card (not just a number). I also call their employer to get as much information as I can as well as their previous landlord.
If someone is renting to illegal aliens, then they deserve the vacancy. As far as I am concerned, it is just as bad to rent to them as it is to hire them. Illegal is ILLEGAL.
I agree, but that's not the subject. If illegal aliens are emigrating out of Arizona creating multiple vacancies, it not only hurts the landlords renting to them, it causes downward pressure on rents for other landlords.
Again, I only see this as a short-term adjustment as illegal aliens leave Arizona and legal ones move in.
Mike M- your list is pretty generic and I think from a mag, isn't it? I personally have concern about Salt Lake (and I'm Mormon!), and Maricopa, AZ.
The list also is missing the # 1 area in the nation in my mind. So Texas for SO many reasons. I'm putting my money where my mouth is. I also like low priced homes in SW FL. Rich
For those that are recommending Miss., Alabama, etc., do you run into the same problems as Florida (insurance carriers stop doing business in the whole state, high rates, problems insuring "old" properties)?
Rich
I also have a problem with Denver and I live in Colorado. As we all know, a list like this is just the beginning. Real Estate investments change not just city to city, but neighborhood to neighborhood and sometimes even street to street. Even Las Vegas has some really good investments if you work and research hard and long. It would probably be easier to find a good investment in Dallas than Las Vegas.
FLYOVER COUNTRY! It really is that simple. Flyover country doesn't have the wild swings that the socialist areas of the country have. In addition, they are not AS burdened with wild debt; unfunded pensions; and outrageous home prices.
If you're gambling on huge future appreciation, flyover country is not the place to be. However, if you're looking for steady cash flow over a period of decades, flyover country is the place to be.
Hi, I noticed that not all the areas listed by Mike were really large cities. If you're looking for stability and continued growth, with a MSA of about 500,000, get on the internet and look up Springfield, Mo. They are still building spec homes here! Bill
Specs are also being built in So. TX. My subdivision will have 5 specs out of the ground before June 15, and westwind homes also has 4 specs, both projects in my favorite TX town. It has been very good to me. Rich