Where To Buy My First Rental Property

Member since 2019 · 8 posts · 21 votes

Hi all, I am looking into buying my first rental property. As with many others I'm sure, looking for guidance on affordable cities that still provide a solid return / cash flow. Preferably looking for properties under $200k, but up to $300k. It will have to be out of state since I live in a HCOL location so I am open to anywhere in the country, but most of my research has taken me to the midwest (e.g. Cleveland and others) and some spots in the southeast (e.g. Huntsville and others). However, from my research, it's extremely difficult to find any cities where the properties cash flow other than places like Cleveland which has its own set of drawbacks. Cleveland almost seems like the best option because of the affordability and rental demand, but worries me due to the high property taxes and lack of population and economic growth. For the most part, due to interest rates, breaking the 1% cap rate still won't provide positive return after expenses. I also have no problem doing some sweat work to build equity in the beginning as well. I just want it to work and be a positive experience because I know that will keep me motivating to continue investing and building my portfolio.

What are some cities that might provide cash flow, but remain affordable? Does anyone have better insight into the cities I named? How can I best find undervalued properties in desirable locations?

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Travis Biziorek

Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes

Zachary,

Your concerns about Cleveland are valid—high property taxes and stagnant population growth are definitely challenges to consider. Given what you’re looking for (affordability, cash flow, and the ability to add value), Detroit might be worth looking into. It’s a city I know well because I built a 12-door portfolio there between 2019 and 2021.

Detroit offers a lot of value in terms of affordability and rental demand. You can still find single-family homes in the $80k–$100k range and duplexes in the $130k–$150k range, even in C and C+ neighborhoods that are seeing steady improvements. The population is officially growing again, and there’s been a lot of investment in infrastructure and development in recent years, which makes it unique compared to some other Midwest markets.

One thing to keep in mind, though, is that Detroit is very much a block-by-block city. It’s crucial to have local market knowledge or work with someone who does. If you’re willing to put in the work and learn the nuances, it can be a great place to build a portfolio.

Feel free to reach out if you’d like any pointers or resources—I’m happy to share what I’ve learned from my time investing there.

Best of luck!

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Jason WrayPro Member
Banker · Nationwide · Member since 2020 · 2k+ posts · 1k+ votes
1y
Zachary,

It's pretty easy to find a solid cash flowing REI under $200K in either Indiana or Ohio. These two states have been super hot over that last few years when it comes to both single family and 2-4 unit multi=family rentals. The ability to find a good sales price under $200K with low taxes and affordable insurance is getting harder to find but in Oh & IN its still easy.

Inventory is strong and the rents are above normal so even though your under $200K you can still earn a good profit. On top of that you can find some great deals on TLC properties that need a little work but offer a strong ARV to expedite your initial cash back out with room for the next REI down payment.
If you ever have any questions feel free to reach out I don't mind helping other BP investors or talkig REI, if it helps save time and money!
[email protected]727-637-4289
8 Reply
Zachary Young
OP
Member since 2019 · 8 posts · 21 votes
1y
@Jason Wray Thanks for your response! Will send you a message.
0 Reply
Shawn AckermanPro Member
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
1y
Hello Zachary, You are correct in looking at the Mid-West for cash flow. I have been in Milwaukee WI for quite a while as investing in my backyard in NY is cost prohibitive. good luck on your journey!!!!
2 Reply
Travis Biziorek
Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes
1y
Zachary,

Your concerns about Cleveland are valid—high property taxes and stagnant population growth are definitely challenges to consider. Given what you’re looking for (affordability, cash flow, and the ability to add value), Detroit might be worth looking into. It’s a city I know well because I built a 12-door portfolio there between 2019 and 2021.

Detroit offers a lot of value in terms of affordability and rental demand. You can still find single-family homes in the $80k–$100k range and duplexes in the $130k–$150k range, even in C and C+ neighborhoods that are seeing steady improvements. The population is officially growing again, and there’s been a lot of investment in infrastructure and development in recent years, which makes it unique compared to some other Midwest markets.

One thing to keep in mind, though, is that Detroit is very much a block-by-block city. It’s crucial to have local market knowledge or work with someone who does. If you’re willing to put in the work and learn the nuances, it can be a great place to build a portfolio.

Feel free to reach out if you’d like any pointers or resources—I’m happy to share what I’ve learned from my time investing there.

Best of luck!
8 Reply
Sam McCormackBusiness Member
Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
1y
Quote from @Zachary Young:

Hi all, I am looking into buying my first rental property. As with many others I'm sure, looking for guidance on affordable cities that still provide a solid return / cash flow. Preferably looking for properties under $200k, but up to $300k. It will have to be out of state since I live in a HCOL location so I am open to anywhere in the country, but most of my research has taken me to the midwest (e.g. Cleveland and others) and some spots in the southeast (e.g. Huntsville and others). However, from my research, it's extremely difficult to find any cities where the properties cash flow other than places like Cleveland which has its own set of drawbacks. Cleveland almost seems like the best option because of the affordability and rental demand, but worries me due to the high property taxes and lack of population and economic growth. For the most part, due to interest rates, breaking the 1% cap rate still won't provide positive return after expenses. I also have no problem doing some sweat work to build equity in the beginning as well. I just want it to work and be a positive experience because I know that will keep me motivating to continue investing and building my portfolio.

What are some cities that might provide cash flow, but remain affordable? Does anyone have better insight into the cities I named? How can I best find undervalued properties in desirable locations?

I think the Greater Cincinnati market may have exactly what you are looking for. SFH under 200k, definitely exist. 300k for SMF as well. A lot of details I can go into, but would rather do it over call. Shoot me a message if you have any interest in the area and so I can learn how to help you best
[email protected]859-443-4952
Sam McCormack Realtor
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3 Reply
Remington LymanBusiness Member
Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
1y
Quote from @Zachary Young:

Hi all, I am looking into buying my first rental property. As with many others I'm sure, looking for guidance on affordable cities that still provide a solid return / cash flow. Preferably looking for properties under $200k, but up to $300k. It will have to be out of state since I live in a HCOL location so I am open to anywhere in the country, but most of my research has taken me to the midwest (e.g. Cleveland and others) and some spots in the southeast (e.g. Huntsville and others). However, from my research, it's extremely difficult to find any cities where the properties cash flow other than places like Cleveland which has its own set of drawbacks. Cleveland almost seems like the best option because of the affordability and rental demand, but worries me due to the high property taxes and lack of population and economic growth. For the most part, due to interest rates, breaking the 1% cap rate still won't provide positive return after expenses. I also have no problem doing some sweat work to build equity in the beginning as well. I just want it to work and be a positive experience because I know that will keep me motivating to continue investing and building my portfolio.

What are some cities that might provide cash flow, but remain affordable? Does anyone have better insight into the cities I named? How can I best find undervalued properties in desirable locations?

How can I best find undervalued properties in desirable locations? - You can cold call, work with a deal finder like a Realtor or wholesaler, or network with people who already own properties. Ideally, you network with people who have owned properties for a long time. Sometimes, they will give you a deal.
[email protected]614-541-8475 Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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7 Reply
Michael SmytheBusiness Member
Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
1y
@Zachary Young
Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.

Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.

If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.

If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

Similarly, if you put several Class D tenants in a Class A 4-plex, what do you think will happen to the property?

So, when investing in areas they don’t really know, investors should research the different property Class submarkets.

Here’s our OPINION for the Metro Detroit market (use as a template for your target area!) that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases:

Class A Properties:
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% the more recent norm.
Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.

Class B Properties:
Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 years

Class C Properties:
Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.
Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.

Class D Properties:
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation
Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.

Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

The City of Detroit has 183 Neighborhoods we’ve analyzed.

DM us if you’d like to discuss this logical approach in greater detail!
Logical Property Management4.9453 Reviews
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7 Reply
- Benjamin Ying
  Member since 2020 · 23 posts · 15 votes
  1y
  @Michael Smythe I'm new here, how do you determine property class if you're looking on Zillow? Or do you use another tool to search for properties?
  0 Reply
Samuel DioufBusiness Member
Real Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
1y
Columbus, Ohio is a great market to consider if you're looking for appreciation markets that still cash flow. I moved here from Florida after seeing the expansive growth in the Columbus market.

There are multiple billion dollar companies dumping money into the city, such as Intel, Google, Honda, and Amazon. This is causing a huge influx of people moving here for jobs. And a lot of start-up companies are migrating to this city as well because of the OSU campus that has thousands of talented students graduating and looking for positions locally.

Everything that’s going on here in Columbus is attracting investors and other businesses from all over. A recent study showed that 80 people are moving to this city every single week, which will continue to increase housing demand.
[email protected]614-662-1652
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6 Reply
Zachary Young
OP
Member since 2019 · 8 posts · 21 votes
1y
Quote from @Shawn Ackerman:

Hello Zachary, You are correct in looking at the Mid-West for cash flow. I have been in Milwaukee WI for quite a while as investing in my backyard in NY is cost prohibitive. good luck on your journey!!!!

Thanks, Shawn!
0 Reply
Zachary Young
OP
Member since 2019 · 8 posts · 21 votes
1y
Quote from @Travis Biziorek:

Zachary,

Your concerns about Cleveland are valid—high property taxes and stagnant population growth are definitely challenges to consider. Given what you’re looking for (affordability, cash flow, and the ability to add value), Detroit might be worth looking into. It’s a city I know well because I built a 12-door portfolio there between 2019 and 2021.

Detroit offers a lot of value in terms of affordability and rental demand. You can still find single-family homes in the $80k–$100k range and duplexes in the $130k–$150k range, even in C and C+ neighborhoods that are seeing steady improvements. The population is officially growing again, and there’s been a lot of investment in infrastructure and development in recent years, which makes it unique compared to some other Midwest markets.

One thing to keep in mind, though, is that Detroit is very much a block-by-block city. It’s crucial to have local market knowledge or work with someone who does. If you’re willing to put in the work and learn the nuances, it can be a great place to build a portfolio.

Feel free to reach out if you’d like any pointers or resources—I’m happy to share what I’ve learned from my time investing there.

Best of luck!

Thanks, Travis! Really appreciate the insight!
0 Reply
Zachary Young
OP
Member since 2019 · 8 posts · 21 votes
1y
Quote from @Sam McCormack:

Quote from @Zachary Young:

Hi all, I am looking into buying my first rental property. As with many others I'm sure, looking for guidance on affordable cities that still provide a solid return / cash flow. Preferably looking for properties under $200k, but up to $300k. It will have to be out of state since I live in a HCOL location so I am open to anywhere in the country, but most of my research has taken me to the midwest (e.g. Cleveland and others) and some spots in the southeast (e.g. Huntsville and others). However, from my research, it's extremely difficult to find any cities where the properties cash flow other than places like Cleveland which has its own set of drawbacks. Cleveland almost seems like the best option because of the affordability and rental demand, but worries me due to the high property taxes and lack of population and economic growth. For the most part, due to interest rates, breaking the 1% cap rate still won't provide positive return after expenses. I also have no problem doing some sweat work to build equity in the beginning as well. I just want it to work and be a positive experience because I know that will keep me motivating to continue investing and building my portfolio.

What are some cities that might provide cash flow, but remain affordable? Does anyone have better insight into the cities I named? How can I best find undervalued properties in desirable locations?

I think the Greater Cincinnati market may have exactly what you are looking for. SFH under 200k, definitely exist. 300k for SMF as well. A lot of details I can go into, but would rather do it over call. Shoot me a message if you have any interest in the area and so I can learn how to help you best

Thanks, Sam! That's another option to look into!
1 Reply
Zachary Young
OP
Member since 2019 · 8 posts · 21 votes
1y
Quote from @Remington Lyman:

Quote from @Zachary Young:

Hi all, I am looking into buying my first rental property. As with many others I'm sure, looking for guidance on affordable cities that still provide a solid return / cash flow. Preferably looking for properties under $200k, but up to $300k. It will have to be out of state since I live in a HCOL location so I am open to anywhere in the country, but most of my research has taken me to the midwest (e.g. Cleveland and others) and some spots in the southeast (e.g. Huntsville and others). However, from my research, it's extremely difficult to find any cities where the properties cash flow other than places like Cleveland which has its own set of drawbacks. Cleveland almost seems like the best option because of the affordability and rental demand, but worries me due to the high property taxes and lack of population and economic growth. For the most part, due to interest rates, breaking the 1% cap rate still won't provide positive return after expenses. I also have no problem doing some sweat work to build equity in the beginning as well. I just want it to work and be a positive experience because I know that will keep me motivating to continue investing and building my portfolio.

What are some cities that might provide cash flow, but remain affordable? Does anyone have better insight into the cities I named? How can I best find undervalued properties in desirable locations?

How can I best find undervalued properties in desirable locations? - You can cold call, work with a deal finder like a Realtor or wholesaler, or network with people who already own properties. Ideally, you network with people who have owned properties for a long time. Sometimes, they will give you a deal.

Thanks, Remington! That's helpful. As they say, your network is your net worth haha
2 Reply
Zachary Young
OP
Member since 2019 · 8 posts · 21 votes
1y
Quote from @Michael Smythe:

@Zachary Young
Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.

Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.

If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.

If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

Similarly, if you put several Class D tenants in a Class A 4-plex, what do you think will happen to the property?

So, when investing in areas they don’t really know, investors should research the different property Class submarkets.

Here’s our OPINION for the Metro Detroit market (use as a template for your target area!) that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases:

Class A Properties:
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% the more recent norm.
Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.

Class B Properties:
Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 years

Class C Properties:
Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.
Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.

Class D Properties:
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation
Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.

Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

The City of Detroit has 183 Neighborhoods we’ve analyzed.

DM us if you’d like to discuss this logical approach in greater detail!

Thanks, Michael! This is very helpful.
I've based by search so far off the affordability aspect of things. I've found all different classes of neighborhoods in just about any city I look into, so I started instead by going off what properties cost and what I can afford. Based on my price range, the goal is Class C-B properties (maybe like a high class C, neighboring class B areas if possible). So from there, I have been identifying cities that offer properties in my price range and researching the neighborhoods that offer such properties. This is why I've ended up coming back to the midwest and some southeast - affordable home prices that are not all Class D, with some being Class C with the potential to become Class B in the future.
Also, the goal is immediate cash flow, with some appreciation over time which fits Class C criteria.
I will send a dm to discuss further, thank you!
1 Reply
Zachary Young
OP
Member since 2019 · 8 posts · 21 votes
1y
Quote from @Samuel Diouf:

Columbus, Ohio is a great market to consider if you're looking for appreciation markets that still cash flow. I moved here from Florida after seeing the expansive growth in the Columbus market.

There are multiple billion dollar companies dumping money into the city, such as Intel, Google, Honda, and Amazon. This is causing a huge influx of people moving here for jobs. And a lot of start-up companies are migrating to this city as well because of the OSU campus that has thousands of talented students graduating and looking for positions locally.

Everything that’s going on here in Columbus is attracting investors and other businesses from all over. A recent study showed that 80 people are moving to this city every single week, which will continue to increase housing demand.

Thanks for the insight, Samuel!
0 Reply
Wale LawalBusiness Member
Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
1y
@Zachary Young
Based on my experience, finding affordable cities with strong cash flow potential is definitely possible with the right strategy. Cities like Indianapolis, St. Louis, Memphis, and Birmingham offer a good balance of affordability and rental demand, while online platforms, auctions, and networking with local agents can help you find undervalued properties. Focus on areas with high tenant demand, solid cash flow, and potential for long-term appreciation, and you'll be on your way to securing a great investment.
Good luck!
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Account Closed
Realtor · Cleveland, OH · Member since 2023 · 340 posts · 215 votes
1y
Hi, yes check out Ohio real estate market my clients from all over the world are investing in the market. Please feel free to reach out with any questions. Best Wishes!
0 Reply
Gloria N GearBusiness Member
Realtor · Indianapolis IN · Member since 2018 · 464 posts · 339 votes
1y
Indianapolis is still experiencing population growth. There are plenty of properties under $200K. (I just searched MLS and there are 589 right now) that is not counting off-market and wholesalers. Yes, the 1% rule is getting harder, but hopefully rent prices will continue to increase as they have been trending. Still a very stable and investor friendly market here.
1 Reply
Patrick Galphin
Realtor · Memphis, TN · Member since 2023 · 29 posts · 37 votes
1y
@Zachary Young
The Memphis market has been a great place for new investors to start and build a portfolio. I am both a long time Memphian and investor here in the city, I am able to help investors (both seasoned and new) find properties that are best for their portfolios.
Would love to connect and learn more about how you are wanting to invest!
Thanks,
Patrick
2 Reply
James WachobBusiness Member
Real Estate Broker · Memphis, TN · Member since 2015 · 1k+ posts · 888 votes
1y
Hello @Zachary Young,
You should consider putting Memphis on your investment radar if you haven't already. Much like other markets in the Midwest, investors go to our market because of the low barrier to entry. You can find great investment opportunities out here that are under $200k. You can get something that's turnkey or new construction at this price point, and most importantly, there's a strong tenant base ready to rent out these homes. Our city holds a lot of gems if you know where to find them. Please feel free to reach out if you want to learn more.
0 Reply
Bradley BuxtonBusiness Member
Real Estate Agent · NV · Member since 2023 · 1k+ posts · 713 votes
1y
@Zachary Young
The Midwest and south are less expensive than the west coast markets. Keep in mind travel time, repairs, and lifestyle to manage the out of state rental. Are there lower priced investments in your area that you can purchase or house hack? 1 bad tenant and a few repairs can wipe your cash flow, time and energy. Building a trustworthy team will be key.

0 Reply
Pamela Rivas
Real Estate Agent · Kelowna BC, Canada · Member since 2024 · 10 posts · 9 votes
1y
Hi Zachary,

Interested investing overseas? Properties in the Southeast of Mexico often offer ROI upwards of 10%-15% annually, especially in short-term rentals.

Key Benefits:
- Tourism Growth: Mexico welcomed over 40 million international visitors in the first 11 months of 2024, surpassing 2023 figures.
- Cost Advantage: Property prices in Mexico can be 40%-50% lower than comparable investments in the U.S. or Canada.
- High Occupancy Rates: The average rental occupancy rate in Tulum is 70%-80%, driven by year-round tourism.
- Economic Stability: Mexico's economy grew 3.1% in 2023, with a robust real estate sector supported by foreign investment.
- Infrastructure Investments: Developments like the Maya Train and new airports enhance connectivity, boosting property value.
Feel free to reach out if you'd like more information on how to invest in Mexico, benefits and insights in general!

Best of luck!
2 Reply
- Brandon Leffler
  Rental Property Investor · Stockton, CA · Member since 2020 · 35 posts · 22 votes
  1y
  @Pamela Rivas is that pretty much cash deals? And then a US citizen can own them without any caveat?
  0 Reply
- Brandon Leffler
  Rental Property Investor · Stockton, CA · Member since 2020 · 35 posts · 22 votes
  1y
  @Pamela Rivas is that pretty much cash deals? And then a US citizen can own them without any caveat?
  0 Reply
Keagan Scott
Realtor · Indianapolis, IN · Member since 2017 · 40 posts · 14 votes
1y
Hi Zachary,

Congrats on starting your rental property journey! I’m a realtor and investor in Indianapolis, and I’d highly recommend adding Indy to your list of potential markets. Here’s why:

Affordability: You can find solid properties here well within your $200k–$300k budget.

Cash Flow Potential: Indianapolis has a growing population, a diverse economy, and relatively low property taxes compared to some other midwestern markets like Cleveland.

Investor-Friendly: Indy is landlord-friendly with strong rental demand, especially in neighborhoods near downtown, universities, and revitalized areas like Fountain Square or Irvington.

If you’re open to a strategy involving light renovations, there are plenty of opportunities to add equity and boost rental income here. I’d be happy to help you navigate the market, identify undervalued properties, and analyze potential cash flow. I have lists of contractors, handymen, cleaners and whatever else you may need if you need me to send.

Good luck!
0 Reply
Rebecca KnoxBusiness Member
Specialist · Milwaukee, WI · Member since 2014 · 1k+ posts · 1k+ votes
1y
Milwaukee is a great place to invest but we do have a barrage of out of state investors that don't upkeep their properties. In fact, some of them have been in the news lately and popped up on the foreclosure list as they are in trouble financially as well.
The biggest mistake I see out of state investors make is relying on others too much for direction and guidance instead of doing their own due diligence and building their own team that they actually meet and interview
Relying on one person who alleges that they have a 'team' built already that you can use as well can be a costly mistake.
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2 Reply
Jimmy LieuBusiness Member
Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
1y
Quote from @Zachary Young:

Hi all, I am looking into buying my first rental property. As with many others I'm sure, looking for guidance on affordable cities that still provide a solid return / cash flow. Preferably looking for properties under $200k, but up to $300k. It will have to be out of state since I live in a HCOL location so I am open to anywhere in the country, but most of my research has taken me to the midwest (e.g. Cleveland and others) and some spots in the southeast (e.g. Huntsville and others). However, from my research, it's extremely difficult to find any cities where the properties cash flow other than places like Cleveland which has its own set of drawbacks. Cleveland almost seems like the best option because of the affordability and rental demand, but worries me due to the high property taxes and lack of population and economic growth. For the most part, due to interest rates, breaking the 1% cap rate still won't provide positive return after expenses. I also have no problem doing some sweat work to build equity in the beginning as well. I just want it to work and be a positive experience because I know that will keep me motivating to continue investing and building my portfolio.

What are some cities that might provide cash flow, but remain affordable? Does anyone have better insight into the cities I named? How can I best find undervalued properties in desirable locations?

Hi Zachary, I personally recommend checking the Columbus OH market. We still see positive cash flowing deals here with lots of potential for appreciation because of economic growth. A lot of major companies are choosing to build and develop here (Intel, Meta, Amazon, Google, etc.) so the population and job market are also growing. Happy to send over some resources regarding the Columbus Ohio market and why it's a great market to invest into!
[email protected]614-300-7535
Jimmy Lieu, Red 1 Realty4.9120 Reviews
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0 Reply
Sadler Surratt
Specialist · Memphis, TN · Member since 2024 · 63 posts · 24 votes
1y
Hi @Zachary Young !
Finding the right markets and understanding their performance is an excellent starting point! Ohio is indeed a fantastic option. Additionally, I’d recommend exploring markets like Memphis, Little Rock, Oklahoma City, and Tulsa. These areas offer a strong combination of steady cash flow and appreciation, providing a balanced approach to diversifying your portfolio.

Wishing you the best of luck on your investment journey! If you have any questions or would like to discuss strategies further, feel free to reach out.

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