Whats the best area for rentals?

Question

With house prices sky rocketting what do you think the best city for rentals would be that turn a profit? I am finding that the property taxes in some areas are real deal killers even for your primary home. Who wants to pay 500 a month in property taxes, and HOA fees just to live in a place that took 30 years to get the mortgage to 0. I'm sure there is alot worse out there. any input will be welcomed.

Ken Hicks · Answer

Ryan, I have heard the Texas area is strong for rentals but the properties i've check out have very high property taxes. maybe i'm looking at the wrong areas. Do you have any realtor links to find properties?

Ryan Webber · Answer

I'm sorry, Green, I think I read your post wrong.  It's a package deal for the two units for 65K.  That does sound quite a bit better.  That actually sounds like a pretty good deal.

Ryan Webber · Answer

I don't know Green, but those don't sound like very good rental numbers to me.  Now don't get me wrong, you beat MGD's offer hands down.  Atleast yours might cash flow, but I'm use to buying a house for $30,000-$35,000 that will rent out for $600-$700 per month.

N/A N/A · Answer

I know of some brand new 2-3 bed 2-3 bath Town homes  in Charolette N.C they sell for $117,000 to $164,000 They are ready to rent out with new appliaces and blinds HOA only $95 per month . 35,000 jobs coming to the area . All other rentals in the area were built in 1928 . I have all the data to support the fact that this is deemed to be the next boom market in the USA and is the very reason they were built in this area . The rent is around $900 per month and the taxes 1% of the value .

Jeff Takle · Answer

mach,

Texas has high property tax because they don't have a state tax. Something to consider if you're not a Texas resident. You don't get the benefits of the personal income state tax but you will pay their higher personal property tax if you own rental property there. Though it varies across the state, Texas in general will have high rates. It's just a consideration and if the cash flows work, they work.

I like Texas and I think there are very good places to invest there.

Jeff

Derek Guyer · Answer

I can't speak for all of the Midwest, but I know that Indianapolis is an extremely strong area for rentals. Most investors can not only buy extremely low, but the numbers of foreclosures is pushing people back into renting and creating more demand for the homes we're buying.

I've heard Texas has some really good spots as well.

Ryan Webber · Answer

I know my city is still extremely strong for rentals.  I live in Amarillo, Texas.  I think the key to finding cash flowing areas is to find the areas that are strong but have not had the extreme appreciations over the last decade.  My market averages 5% per year appreciation, and I can easily find rentals that will cash flow for 30% cash on cash return.