Best Cities for Cashflow Rentals?
Realtor · Riverside, CA · Member since 2014 · 18 posts · 12 votes
Best Cities for Cashflow Rentals?
Most Popular Reply
Member since 2020 · 33 posts · 30 votes
3yAthens, AL (college town next to Huntsville) is a gem. You can still get cash flow in both cities. I've also recently bought in South Carolina and lots of cities there still work. Most of Georgia still works, from Atlanta to Valdosta. Tulsa, OK still works, and so does Waco, TX. These are all great markets with growing economies for the most part. Baltimore still works, but be careful. Lots of shoddy rehabs and bad neighborhoods. You can go further North and find cash flow, but with older homes, it just takes one bum HVAC or overlooked plumbing issue and you'll lose most your cash flow for that year. Not saying don't go for it, but be careful with older homes if you're just getting started and out of state. Good luck and reach out any time!
56 Replies
- Memphis, TN · Member since 2021 · 82 posts · 37 votes3y
@Ralph Richardson We have seen great opportunities for cash flow, in the southeast markets. The housing demand for those states has been on the climb.
- Contractor · Philadelphia, PA · Member since 2019 · 11 posts · 12 votes3y
@Ralph Richardson, I live and invest in the Philly area. We also have many clients from out of state (specifically CA, NY, and WA states) who find Philly checks a lot of boxes for them. Pros and cons of course but the dollar can go pretty far in a market like Philly.
- Detroit, MI · Member since 2020 · 150 posts · 68 votes3y
I am going to put my vote in for the following cities
Detroit Michigan , and Cleveland Ohio
we have had a lot of success in these two markets and would be happy to connect with you to share our experiences (the good the bad and the ugly)
- Rental Property Investor · Columbus, OH · Member since 2019 · 135 posts · 160 votes3y
I'm with @Nader Shariff Cleveland is a great place to look at when your goal is cash flow
- Property Manager · Indianapolis, IN · Member since 2022 · 150 posts · 59 votes3y
We work with a lot of investors from California in the Indianapolis area. If I can answer any questions about this market, feel free to reach out!
- Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votes3y
Quote from @Ralph Richardson:
My wife and I are looking to get started as real estate investors. We live in California and it’s to expensive here to cash flow.
What's are some of the BEST CITIES in the USA to purchase SFR or Condo rental units that can still CASH FLOW?
At the moment we are considering Huntsville Al and Al Paseo, TX
But what other places should we be considering?
Thanks!
Careful, most or all of these mentioned will experience little to no appreciation. Appreciation results from population and job growt, so FYI: coming from riverside, these are not high income note high quality areas. Also, be prepared to deal with problem tenants… and you better figure out a property a management solution that works. Your financial success, if you achieve it, will depend on that. FYI: property mgmnt is 90% tenant selection.
Don’t trust anyone, especially those with a conflict of interest, and even me...
and time your purchase and acquire after the bottom, which should occur in approximately 12-24 months.
these things are not necessarily bad, but things you should be aware of.
fyi:
I own and self manage rentals across 8 cities in 5 states for last 20 years.Message me. I may be willing to speak to you briefly to point you in the right direction.
I’ll actually be in riverside this weekend for a running race.
- Rental Property Investor · Philadelphia, PA · Member since 2015 · 478 posts · 362 votes3y
@Ralph Richardson Interesting times to be at the start of your RE investing adventure. Some words of caution. First of all, there are many strategies and maximizing cashflow is legit and you can succeed at it if you go into it understanding the challenges and risks. Just be aware, the higher end of cashflow are the higher risk areas - tougher class of tenants, older housing stock, less appreciation. Some find a sweet spot that works for them, but that takes work and knowledge. I see people with their beautiful spreadsheets and forecasts and then reality hits - evictions, unexpected repairs, vacancies, all kinds of things you can not imagine until it happens. So get into it with your eyes wide open. We often recommend starting off with the easy stuff and always having diversity in your portfolio -- mix of risk level, geography... My very first purchase was an A class condo with stupid low ROI but it doubled its value in 8 years and I had zero headaches along the way.
- Member since 2023 · 25 posts · 14 votes3y
Quote from @Ralph Richardson:
My wife and I are looking to get started as real estate investors. We live in California and it’s to expensive here to cash flow.
What's are some of the BEST CITIES in the USA to purchase SFR or Condo rental units that can still CASH FLOW?
At the moment we are considering Huntsville Al and Al Paseo, TX
But what other places should we be considering?
Thanks!
I’m definitely biased because these are where I own Single family rental properties: DFW and Atlanta. I’m Canadian and would only consider investment properties in Vancouver or Toronto but both are extremely overpriced, so not cash flowing. The company I work on my portfolio with scours data and handles all the heavy lifting to source properties in the “best” markets that fit our wish lists and sold us on DFW and Atlanta. About to close on our 3rd property with them, our 2nd in Atlanta.you have to look at a lot of factors but why we were sold: they’re both top 10 US metros, lower price points, lower cost of living compared to other major metros, have solid employment economies, lots of Fortune 500 HQs, growing population, high rental demand because of the previous points, etc.
you have to filter through the noise and opinions because there are a lot of great cash flowing markets out there as per the replies in this thread, but at the end of the day the decision of where to invest is based on how you can make sense of the numbers. Cap rates, annual appreciation, IRR… to start though you should check out these articles on DFW and Atlanta
https://blog.sharesfr.com/spot...
https://blog.sharesfr.com/spot... - 3yMilton ChamberlainPro MemberReal Estate Agent · Kansas City, MO · Member since 2019 · 235 posts · 107 votes
I've been seeing rates in the 7.25-7.8% for investors with good DTI, savings, and good-Great credit scores. This is making it tough for multi families in the KC Metro to have great COC return (Ive been seeing sub 5%)
Single families have (within the past 2 months) become incredibly competitive in the 40-300k price range due to low inventory derived from sellers not wanting to sell bc they can't justify trading in their 2.5-4% rates for 6%+ rates.
I listed a condo 3 months ago for 140k and no one wanted to touch it. It eventually went under contract, however if I listed it today with current market conditions, I am guessing it would sell at 150k. so Condos and 1/2 duplexes are a little wacky right now too. I imagine this buyer demand flash in the pan will settle down again once we get into the fall, just like it did last fall and winter.
Sorry, being long winded here; story short, the areas you will see great cash flow in the KC metro right now Is C market add-value single families, particularly those with unfinished basements. Platte County (Which is the entire NW portion of the KC metro) saw YOY avg sales price increase of 16.6%! Compared with the appreciation of 2-3% (and even depreciation in Jackson county), it whupped everyone else, so I would focus my sight up NE for the time being, looking for add-value single families, and reap some of the equity growth while you're at it. Communities in Platte County are , Riverside, KCMO, Weston and Platte City.
You have to be aggressive and competitive with your offers, but you can find good pro forma cashflow (100-250), good cap rate (7-10%) in this specific buying field...With putting 20% down COC return is tough still. But with cheaper properties (40-175k), you could get 5-10%
- Real Estate Broker · Kansas City Metro · Member since 2015 · 2k+ posts · 1k+ votes3y
We have a specific multifamily meet up going in in KC next Friday the 28th? If you are in town for the NFL draft or want to meet brokers, agents, investors, capital people you can come in person. It is at Maloney's in Overland Park KS from 2:30 - until whenever. We can talk more then about multifamily?
- Member since 2020 · 33 posts · 30 votes3y
Quote from @Milton Chamberlain:
I've been seeing rates in the 7.25-7.8% for investors with good DTI, savings, and good-Great credit scores. This is making it tough for multi families in the KC Metro to have great COC return (Ive been seeing sub 5%)
Single families have (within the past 2 months) become incredibly competitive in the 40-300k price range due to low inventory derived from sellers not wanting to sell bc they can't justify trading in their 2.5-4% rates for 6%+ rates.
I listed a condo 3 months ago for 140k and no one wanted to touch it. It eventually went under contract, however if I listed it today with current market conditions, I am guessing it would sell at 150k. so Condos and 1/2 duplexes are a little wacky right now too. I imagine this buyer demand flash in the pan will settle down again once we get into the fall, just like it did last fall and winter.
Sorry, being long winded here; story short, the areas you will see great cash flow in the KC metro right now Is C market add-value single families, particularly those with unfinished basements. Platte County (Which is the entire NW portion of the KC metro) saw YOY avg sales price increase of 16.6%! Compared with the appreciation of 2-3% (and even depreciation in Jackson county), it whupped everyone else, so I would focus my sight up NE for the time being, looking for add-value single families, and reap some of the equity growth while you're at it. Communities in Platte County are , Riverside, KCMO, Weston and Platte City.
You have to be aggressive and competitive with your offers, but you can find good pro forma cashflow (100-250), good cap rate (7-10%) in this specific buying field...With putting 20% down COC return is tough still. But with cheaper properties (40-175k), you could get 5-10%
Thanks for the useful, detailed and to the point overview of this market. I wish I had this for every market.
- 3yMilton ChamberlainPro MemberReal Estate Agent · Kansas City, MO · Member since 2019 · 235 posts · 107 votesWelcome! Hit me up anytime. Happy to give my two cents about what I’m personally seeing in the KC metro
Quote from @Allen Tackett:
Quote from @Milton Chamberlain:
I've been seeing rates in the 7.25-7.8% for investors with good DTI, savings, and good-Great credit scores. This is making it tough for multi families in the KC Metro to have great COC return (Ive been seeing sub 5%)
Single families have (within the past 2 months) become incredibly competitive in the 40-300k price range due to low inventory derived from sellers not wanting to sell bc they can't justify trading in their 2.5-4% rates for 6%+ rates.
I listed a condo 3 months ago for 140k and no one wanted to touch it. It eventually went under contract, however if I listed it today with current market conditions, I am guessing it would sell at 150k. so Condos and 1/2 duplexes are a little wacky right now too. I imagine this buyer demand flash in the pan will settle down again once we get into the fall, just like it did last fall and winter.
Sorry, being long winded here; story short, the areas you will see great cash flow in the KC metro right now Is C market add-value single families, particularly those with unfinished basements. Platte County (Which is the entire NW portion of the KC metro) saw YOY avg sales price increase of 16.6%! Compared with the appreciation of 2-3% (and even depreciation in Jackson county), it whupped everyone else, so I would focus my sight up NE for the time being, looking for add-value single families, and reap some of the equity growth while you're at it. Communities in Platte County are , Riverside, KCMO, Weston and Platte City.
You have to be aggressive and competitive with your offers, but you can find good pro forma cashflow (100-250), good cap rate (7-10%) in this specific buying field...With putting 20% down COC return is tough still. But with cheaper properties (40-175k), you could get 5-10%
Thanks for the useful, detailed and to the point overview of this market. I wish I had this for every market.
- 3yJoe S.Pro MemberInvestor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
Quote from @Allen Tackett:
Quote from @Jimmy Lieu:
Quote from @Ralph Richardson:
My wife and I are looking to get started as real estate investors. We live in California and it’s to expensive here to cash flow.
What's are some of the BEST CITIES in the USA to purchase SFR or Condo rental units that can still CASH FLOW?
At the moment we are considering Huntsville Al and Al Paseo, TX
But what other places should we be considering?
Thanks!
Hey Ralph, so I'm from a very similar boat, I'm from Portland Oregon and it's way too expensive to cash flow so I decided to move to Columbus Ohio and become a full-time real estate investor and agent here. Here's why I would recommend Columbus Ohio - there's so many catalysts for why you should invest here. Specifically, there's job growth (Intel, Honda, Amazon, Nationwide, etc) and the population is growing (unlike Cleveland or Cincy). I really see Columbus Ohio as an extremely safe bet for the next 10-20 years. Plus, there's still so many positive cash flowing and 1% deals here in Columbus Ohio. Just a few weeks ago, I helped a client close on a deal getting them 20% cash on cash return. As a local investor and agent here, let me know if you have any questions or want to connect!
I've done a few deals this year, but I'm looking to buy one more in the next 30 days. If you want to send me a few listings, please send me a PM.
At risk of sounding demanding, a few caveats. I don't buy anything with capex or maintenance needed in the short term (first 3-4 years of ownership). So I need newer roofs, HVAC, hot water etc. I usually buy new construction but realize this probably isn't the market for those kind of deals. I'm not really into full remodels of homes pre-1960 because while the cosmetics can look great, there's no way to know the quality of the work behind the walls. Foundation issues are deal breakers. I buy in A/B neighborhoods. No C or D. I self manage so I can't risk tenant headaches. I'm usually overseas so I need it to be passive. In 18 years, I've never had a missed rent payment or eviction and I'd like to keep it that way : ).
Lastly, I do ask for accurate sellers disclosures. Any major surprises at the home inspection and I usually just walk away. I expect parties to be transparent and act in good faith. I appreciate your time and would be happy to add OH to the markets I own in and work with you, but I don't want to waste your or my time so please do consider the aforementioned requirements.
You either got a good track record or you don’t have many properties. Lol.
- Member since 2020 · 33 posts · 30 votes3y
Quote from @Joe S.:
Quote from @Allen Tackett:
Quote from @Jimmy Lieu:
Quote from @Ralph Richardson:
My wife and I are looking to get started as real estate investors. We live in California and it’s to expensive here to cash flow.
What's are some of the BEST CITIES in the USA to purchase SFR or Condo rental units that can still CASH FLOW?
At the moment we are considering Huntsville Al and Al Paseo, TX
But what other places should we be considering?
Thanks!
Hey Ralph, so I'm from a very similar boat, I'm from Portland Oregon and it's way too expensive to cash flow so I decided to move to Columbus Ohio and become a full-time real estate investor and agent here. Here's why I would recommend Columbus Ohio - there's so many catalysts for why you should invest here. Specifically, there's job growth (Intel, Honda, Amazon, Nationwide, etc) and the population is growing (unlike Cleveland or Cincy). I really see Columbus Ohio as an extremely safe bet for the next 10-20 years. Plus, there's still so many positive cash flowing and 1% deals here in Columbus Ohio. Just a few weeks ago, I helped a client close on a deal getting them 20% cash on cash return. As a local investor and agent here, let me know if you have any questions or want to connect!
I've done a few deals this year, but I'm looking to buy one more in the next 30 days. If you want to send me a few listings, please send me a PM.
At risk of sounding demanding, a few caveats. I don't buy anything with capex or maintenance needed in the short term (first 3-4 years of ownership). So I need newer roofs, HVAC, hot water etc. I usually buy new construction but realize this probably isn't the market for those kind of deals. I'm not really into full remodels of homes pre-1960 because while the cosmetics can look great, there's no way to know the quality of the work behind the walls. Foundation issues are deal breakers. I buy in A/B neighborhoods. No C or D. I self manage so I can't risk tenant headaches. I'm usually overseas so I need it to be passive. In 18 years, I've never had a missed rent payment or eviction and I'd like to keep it that way : ).
Lastly, I do ask for accurate sellers disclosures. Any major surprises at the home inspection and I usually just walk away. I expect parties to be transparent and act in good faith. I appreciate your time and would be happy to add OH to the markets I own in and work with you, but I don't want to waste your or my time so please do consider the aforementioned requirements.
You either got a good track record or you don’t have many properties. Lol.
Haha...fair, but it's probably a bit of both. I only have about a dozen properties, but it's a very nice portfolio with no lemons or cheap homes and it's given us financial independence. I admit that I have learned that high standards, honest dealings and being a little demanding tend to improve the outcome of just about anything in life :)
- Investor · Huntsville, AL · Member since 2015 · 149 posts · 80 votes3y
@Ralph Richardson I love the entire northern Alabama market, not just Huntsville. Don’t sleep on areas like Athens, Hartselle, New Market, etc. we find lots of good deals in a 30 mile or so radius around the city.
- 3yAlex BekezaBusiness MemberLender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
I personally live in SoCal as well and invest in Saint Louis, Missouri where I have 13 units so far. There is a very high rent to price ratio in South City and you can do very well as long as you account for all the potential cap ex issues up front associated with the older construction. I like to mitigate tenant issues by relying on Section 8 tenants and professional 3rd party property management. I also lend in many high cash flow markets which mainly cover the midwest and south. Saint Louis, Cleveland, Memphis, Baton Rouge, August, Indianapolis, etc.
Investor Property Loan5306 Reviews - Real Estate Broker · Kansas City Metro · Member since 2015 · 2k+ posts · 1k+ votes3y
Kansas City has appreciation and cash flow. You just have to buy in the correct area. In addition, interest rates should be 6.5% or so for multifamily true commercial loan. I can show you some more info.
- Investor · Kansas City · Member since 2023 · 70 posts · 62 votes3y
Quote from @Alex Olson:
Kansas City has appreciation and cash flow. You just have to buy in the correct area. In addition, interest rates should be 6.5% or so for multifamily true commercial loan. I can show you some more info.
I second what Alex said. My wife and I have been investing here in Kansas City for a few years now. From our experience we have seen some great appreciation and great cashflow. We're still noobs in my opinion but we had enough for me to leave my W-2 job and really ramp up the investing side. Not to mention, it's super cheap out here too and even market corrections don't impact us midwest states as much in comparison to east/west coast states.
- Columbus, OH · Member since 2023 · 427 posts · 254 votes3y
Definitely look towards the midwest. I hear great things about Cleveland, and Detroit has strong metrics for CFs, though I've heard some not so great things about the experience of a landlord in Detroit.
- 3yDean HarrisBusiness MemberReal Estate Agent · Memphis, TN · Member since 2015 · 1k+ posts · 1k+ votes
You can cash flow all day in Memphis!
CrestCore Realty4.713 Reviews - Investor · Riverside, CA · Member since 2016 · 129 posts · 67 votes3y
Hey @Ralph Richardsonit’s been a while but would love to connect with you over coffee to discuss real estate investing. I’m here in Riverside as well.
Hope you are well.
Rob
- Real Estate Agent · Austin, TX · Member since 2022 · 95 posts · 39 votes3y
Quote from @Dean Harris:
You can cash flow all day in Memphis!
MEMPHIS MEMPHIS MEMPHIS! Show me the money $$$
- 3yRyan RomingerBusiness MemberReal Estate Broker · Indianapolis, IN · Member since 2018 · 340 posts · 144 votes
Hello Ralph,
Indianapolis has had steady growth in rent rates and appreciation over the years. There are several Fortune 500 companies in the city. If you would like more information on the market please feel free to reach out.
Intrigue Real Estate & Property Management4.6285 Reviews - 3yJoe HammelBusiness MemberReal Estate Agent · Metro Detroit, MI · Member since 2018 · 612 posts · 666 votes
@Ralph Richardson
Metro Detroit
(my rental portfolio is here)
Purchase: $80k-$130k
Rent: $1100-$1500 (no rent control in MI)
1% rule: 1%-1.4% rule deals
ROI: 10-14%
Cash flow: $250-$350/door (after all expenses and budgeting for maint, capex, vacancy)
Appreciation: 3-15% (has been double digit for a decade)
Location: C+, B-
These numbers are based on the "sweet spot" in Metro Detroit. These are largely in the suburbs and some markets in the city. You can find higher ROI (on paper) here and probably in other cities…but the probability of actually collecting rent significantly decreases. Where these numbers are found, there is a very high rate of rent actually being paid.
We have over a dozen Fortune 500 companies just in Metro Detroit with huge Healthcare, Auto, and mortgage industry National footprints. Ford, Rocket mortgage, Beaumont hospitals and more. All complimented with Amazon fulfillment centers, google, and more tech manufacturing jobs.
The bad reputation of “Detroit” comes from OOS investors wanting $20,000, D class properties. We don’t buy those lol.
FIRE Realty Team - Keller Williams5379 Reviews
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