Best markets for SFH rental property cash flow

[Peter J Struck]

What are the best markets for Single Family Home rental properties from a cash flow perspective?

[Andrew Postell]

@Peter J Struck this is often a common area of discussion here.  As a 15 year, out-of-state investor my recommendation is to ALWAYS choose whatever city you have the most trustworthy contacts in. Keep in mind that you may never see your asset. That's an ENOURMOUS amount of trust/money to put into a stranger's hands. What I mean here is that if you know someone in a different city...but that city may not have as good as numbers as this other city...then stick with the city where you know people. One wrong move will erase any "benefit" one city has over another. One wrong contractor, one wrong vendor...and that extra 2% is gone and now you are negative.  Your network is the most important piece for any potential returns when you invest out of state.

Hope all of that makes sense.

[Peter J Struck]

Great advice

[Travis Biziorek]

It really depends on how you're defining "best".

From a pure cash flow perspective I'm sure you could do the best in small, rural towns in the south. 

If you want to be in a bigger city with more investor-focused resources you're likely looking in the Midwest.

Of that area I personally like Detroit the best. I'm biased as I have 12-doors there and do a lot of other business in the city. But it's hard to beat.

There's so much happening with investment and revitalization in Detroit that, if you know what you're doing, you can find great cash flow and set yourself up for appreciation as well.

[Peter J Struck]

Hi Travis, 

Any advice on researching the community and finding a property manager as a long distance investor?

Peter

[Carlos Ptriawan]

Quote from @Peter J Struck:

What are the best markets for Single Family Home rental properties from a cash flow perspective?

 you should change the question like this :



What are the best markets for Single Family Home rental properties from a cash flow perspective that has stable tenant ?

[Alex Bock]

Current interest rates are making it hard to cash flow from what I'm seeing. If you have cash, you have an advantage in today's market in my opinion. Even if you have to cash out later when interest (hopefully) goes down. 

I'm in a market where the BRRRR method is utilized frequently. Cheap, old, usually distressed single family & small multi in my market is frequently found for <$75,000. This can make for a good opportunity to make the property code compliant and do an attractive remodel to get rents up to market, then subsequently get a good tenant. I've found a 10% CCR is usually obtainable. The only thing you have to watch out for as others have mentioned is your "boots". I've yet to find a property management company in the Quad Cities to write home about. I had better luck hiring an individual.