Safer areas to invest in for rental ?

[Loic Billiau]

Following my first post when I asked some advices on a new start for our family run LLC based in France, here's another question for you guys. Thanks for those who helped us already !

We invested in Florida, were looking into Austin but we did some other researchs and the taxes are really on the high end in Texas ! (as for California and New york it seems)

Our goal is to invest on rental properties (we can't flip from France) with very low expenses in a safe area. We have around 400k $ and like to be around 8-9 cap rate.

What's the catch with Memphis and Atlanta ? Low appreciation ? The cap rate are higher than everywhere else.

Colorado, Arizona ? 

We'd like to keep this investment as a nice cashflow. Thoughts as well as property listings offer appreciated.
please email at loic<a>banzaii.fr

[Alex Craig]

@Account Closed I think Loic is referring to cap rate as a simple metric of Rent Revenue minus expenses / purchase cost. Some sellers will include estimated vacancy and maintenance, typically 8 to 10% a piece. Some call it a cap rate, others will call in cash on cash. Some very popular sites like Property Tracker and Real Yields that investors use to evaluate property will call it cap rate. I think the main thing is for investors to have some sort of numerical value, regardless of what the seller calls it, to evaluate property. 

@Loic Billiau if you own single family residential and after 5 years, you made 10% return, then I would consider that doing well.  Mix in a blended rate of equity created by tenant, tax breaks and appreciation, then your return is much higher. Many investors do not consider the blended return, but for me and my strategy, the blended return makes it worth it. I was able to depreciate (off the top of my head) over 100k last year, meaning, my taxable income was 100k less even though I turned a profit on my rentals. Of course, once you sell, then you have to recoup, but my plan is to pay off, then hand down to my heirs when my time comes. To answer your question about Memphis, there is not much appreciation here as it is a very lineal market.Cash flow is what brings people here. I own 19 doors and getting ready to add 3 more this month.