Where can I buy a good midterm rental for $250K?

Question

I have decided it's time to expand my portfolio. I currently have two local long-term rentals and one midterm rental that is remote. This week I should be closing on a HELOC. I want to use that money for some properties that cash flow. However, the properties need to be around $250K. I thought for cash flow I would look at doing midterm rentals. I've done well with this on a condo in the Edgewater neighborhood of Chicago for the last four years. After doing some research, I came to the conclusion that my best area of focus would be the southside flats in Pittsburgh. Alternative options were going to be Cleveland, Detroit, or possibly Kansas City. I'd love to get some input from people who have had experiences doing MTRs in any of these areas, but specifically, the southside flats in Pittsburgh. Also, how you personally search for properties. I've been just looking on Zillow, but now I am debating foreclosures, REOs and off market opportunities. I'm hoping to buy one property every year, with the plan that the cash flow from all of my properties will help to allow me to replenish my HELOC and buy another propertry the following year.

Alfath Ahmed · Answer

Cleveland will be your best bet. It has the one of the highest CoC returns in the State/Nation. The fact that it is landlord friendly, affordable, and the city is able to keep up with growing rents and maintain demand is impressive.

I have a core-4 team that works in Cleveland and cold-calls to find off-market deals. Let me know if you need any connection. Happy to refer others.

Marc Rice · Answer

Cleveland and Dayton could work for you

Jennie Berger · Answer

@Justin Miller I’ve owned a 3 bed / 2 bath MTR in Knoxville since 2022 and it’s been a strong market for me. One thing I like about Knoxville is that the MTR demand isn’t dependent on tourism or seasonality.

I bought mine in late 2022 for $240K. Prices have definitely moved since then, but there are still areas where you can find properties around the $250K mark that could make sense as MTRs.

Out of curiosity, if you’re already invested in another market, what’s pushing you toward Pittsburgh (and other areas) instead of adding another property in a market you already know well?

-Jennie Berger

Property People

Jamie Dietz · Answer

The South Side Flats is an interesting choice for a remote mid-term rental (MTR) investment. You can definitely find properties under $250,000, but I would strongly recommend visiting the neighborhood if you're not already familiar with it.

Over the years, the South Side has gone through significant cycles of growth and decline. While it remains one of Pittsburgh's most walkable neighborhoods with excellent access to Downtown, parts of the neighborhood are currently facing challenges with crime, commercial vacancies, and residents relocating to more desirable areas.

In my opinion, these issues are most noticeable in the western portion of the neighborhood. The eastern end closer to South Side Works and the riverfront has generally held up better and continues to attract more investment and redevelopment.

If you're investing remotely, I'd be cautious. Buying the right block is critical in the South Side Flats, as values, tenant quality, and overall appeal can vary dramatically within just a few streets.

Evan Hopple · Answer

Having one successful out-of-state MTR already under your belt definitely gives you an advantage. I'd just be careful not to force a market because it's popular for midterm rentals. A $250k budget can go a lot further in some cities than others, so I'd first identify markets where that price point can still buy a property that works well as an MTR.

I also think you're on the right track by expanding your deal sources. The investors who consistently grow their portfolios usually aren't relying on a single place to find opportunities, especially when they're trying to buy year after year.

If Cleveland stays on your list, I'd focus on neighborhoods with strong demand drivers rather than just the lowest-priced homes. Areas near the Cleveland Clinic, University Hospitals, and Case Western Reserve University tend to have consistent demand from traveling professionals, students, and relocating workers, and there are still neighborhoods where a $250k budget can still be competitive.

Justin Miller · Answer

@Evan Hopple i'm still a little iffy on Cleveland. the area you speak in has some hit or miss neighborhoods on the outskirts and not many for sale within. I have a friend who just bought it into an Airbnb out there but I don't think he's seen recent changes in law. But if the numbers work, I'm interested.

Milton Chamberlain · Answer

Hi Justin! I can only speak to the KC side of things.

I pulled a search in some of the stronger appreciating and more desirable areas around Kansas City and found about 63 active properties around your ~$250k price point across single-family homes, townhomes, condos, and half-duplexes.

If I were targeting affordable midterm rentals still in desirable areas, I'd put North Kansas City on my radar. It’s quaint little city about two miles north of downtown. Historically its been more of a blue collar community, but has become very popular over the last 10 years. It's close to several major hospitals, is a popular area for traveling professionals seeking proximity to the city, and has seen some of the strongest appreciation rates in the immediate region... and avoids Kansas City's 1% earnings tax 😉 to boot!

Current on-market options in NKC include:

• 1444 E. 24th Ave.
• 811 E. 23rd Ave. ($237k)
• 1021 E. 23rd Ave. (auction)

Other properties elsewhere that caught my eye include:

• 4118 Roanoke Rd. near downtown kc/midtown region
• 8107 Ward Parkway in Waldo (looks pretty turnkey)
• 5618 Lamar Ave. in Mission (above budget, but after 50+ days on market there may be some negotiating room)
• 204 N. 83rd St. in KCK if you're betting on long-term appreciation around the Legends/Piper area.

KCK legends/piper schools area is where the new Chiefs stadium is expected to be built. While Arrowhead never seemed to do much for surrounding property values in Raytown or Independence, I think this location has a better chance of benefiting from it since it's already anchored by the Speedway, Sporting KC, a popular school district, and a much newer and well planned residential and commercial base.

I’m just kinda throwing spaghetti against the wall with some examples, so if you would like to get more specific and discuss your exact goals, I am happy to do so

Justin Miller · Answer

@Milton Chamberlain I'll let you know if I'm coming through this weekend. I'm still crunching numbers here trying to figure out what works and what doesn't. the $250,000 number is just my buy-in while trying to be conservative because if we're talking about something that needs updating that leaves me about $100,000 available to update the inside and furnished. Part of me is thinking about going LTR and maybe looking at Wichita instead. It's been over a decade since I've been to Kansas City so definitely I will do some searching on those properties you mentioned in the location suggested. Thanks!