Top 10 Real Estate Markets for Cash Flow in 2024 These are the housing markets that offer the most cash flow opportunities in the United States.

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The vast majority of real estate investors get into the industry to pursue passive cash flow. Unfortunately, over the last several years, finding deals with strong cash flow has become a challenge. However, there are still plenty of markets in the U.S. that continue to offer cash flow potential. 

Below, I provide what I believe to be the top 10 markets in the United States for cash flow.

Cash Flow Trends­­

There’s been a lot of anecdotal chatter about how difficult cash flow is to find these days, so I looked at the data to see if this is true. 

One of the most common metrics used to estimate cash flow potential, and the one I will use for the remainder of this article, is known as the rent-to-price ratio (RTP). The higher the RTP, the better potential for cash flow. 

RTP is a simple calculation—you divide the median monthly rent by the median sales price. When considering how to calculate cash flow, it’s worth noting that an analysis I conducted in 2020 revealed a correlation of .85 (with 1 being the strongest correlation) between RTP and cash flow. While it may not be a flawless measure, understanding how to calculate cash flow using RTP can provide valuable insights for the broad analysis we’re conducting in this context.

As you can see, according to U.S. Census data, RTP has been on the decline since 2012. The chatter about cash flow becoming harder to find is accurate!

NOTE: U.S. Census data is not the most current, but it provides a consistent methodology over a long period and is therefore preferred for looking at historical data like this. For my analysis of what markets currently offer the best cash flow, I use BiggerPockets’ proprietary data, which is updated weekly.

This graph tells a very important story about the Great Recession’s impact and its subsequent fallout when housing prices dropped significantly more than rent prices. 

Generally speaking, during recessions, rent values don’t fall very much. Demand from renters does not fluctuate much based on economic cycles. People will always need a place to live. In fact, home prices don’t usually dip too much during recessions either – with the Great Recession being a notable exception. 

From 2008-2012, home prices declined more dramatically and for longer than rent. 

You can see this very clearly if you look at the compounded growth rates for the years 2008-2012. Home values averaged a decline of nearly 5% per year for four years while rent was negative, but barely. 

This created the ideal situation for the cash flow we saw in the aftermath of the Great Recession. Homes became cheaper, and expenses declined, but incomes stayed relatively flat. Since 2012, home values have started growing faster than rent, and RTP has started to decrease. 

So, while it’s true that cash flow has been, on a national level, increasingly difficult to find, it’s important to remember that the Great Recession and its aftermath was a uniquely positive opportunity to find cash flow. It’s not the norm. 

That said, there are still good opportunities to find cash flow! Certain markets still offer excellent cash flow prospects across the board, and most markets can still produce cash flow if you pursue value-add strategies, short-term rental, or other creative strategies. 

For this analysis, I looked at which markets offer strong cash flow potential regardless of strategy, as measured by the rent-to-price ratio. 

Top 10 Markets For Cash Flow in 2024

Broadly speaking, the best cash flow opportunities in the United States are concentrated in Texas and some parts of the Midwest and South. Again, that doesn’t mean you can’t find cash flow in other cities. For the most part, however, you’ll find the the West Coast offers little in terms of cash flow opportunity. The Southeast has several opportunities, but mostly in small towns and submarkets that didn’t make the top 10 list due to their size. In this analysis, we only look at cities with populations above 250,000.

Here’s the data for the top 10 cash flow markets:

Metro Area	Population	Median Rent	Rent Growth (YoY)	Median Home Price	Price Growth (YoY)	Rent-to-Price Ratio
Peoria, IL	397,009	$1,104	13.39%	$140,669	7.11%	0.78%
Shreveport, LA	385,154	$1,203	3.13%	$161,190	2.07%	0.75%
El Paso, TX	871,323	$1,509	4.32%	$212,153	6.09%	0.71%
Jackson, MS	580,661	$1,295	5.22%	$185,338	0.93%	0.70%
Pittsburgh, PA	2,349,172	$1,401	4.76%	$202,454	5.02%	0.69%
New Orleans, LA	1,246,176	$1,619	2.79%	$235,150	-7.69%	0.69%
Corpus Christi, TX	421,628	$1,425	2.92%	$213,292	0.05%	0.67%
Lubbock, TX	328,173	$1,339	1.47%	$202,935	-0.05%	0.66%
Lafayette, LA	481,125	$1,250	4.57%	$189,598	-1.66%	0.66%
Duluth, MN	291,931	$1,478	2.02%	$225,754	4.50%	0.65%

As you can see, cash flow has gotten pretty tough to come by, with the top city on the list, Peoria, Illinois, coming in at 0.78% RTP. Regardless, out of the U.S., these are the cities offering the best odds at netting you a good deal with cash flow in the equation. 

A Closer Look at Some Markets

Pittsburgh

The Pittsburgh real estate market is on fire, with home prices appreciating a staggering 22% between February 2023 and 2024. At the heart of the Rust Belt, Silicon Valley tech giants such as Alphabet’s Google, Amazon, Facebook, Uber, Apple, and Microsoft have all setup shop here, feeding off graduates of Carnegie Mellon University’s coveted computer science program. And aside from tech, education, finance, and healthcare are major employment sources. 

The median home price is palatable at $202,454, and the median rent is a decent $1,401—meaning that whenever interest rates fall again, this city will cash flow even better.

Jackson, Mississippi

The University of Mississippi Medical Center (UMMC) is one of the largest employers in Jackson and the state, with about 10,000 healthcare professionals, researchers, educators, and support staff. The Medical Center’s $1.7 billion annual budget represents 10% of the Jackson metro area and 2% of the state economy. 

Other major employers include the Mississippi Baptist Medical Center, as well as Nissan North America, which employs over 5,000 people. Education, finance, and telecommunication help round out Jackson’s employment footprint. Looking at current homes for sale in Jackson makes it easy to see why investing here makes sense—spacious suburban homes on single-family plots available for around $200,000 mean that even with higher interest rates, rentals are a break-even proposition. Once rates drop, owning just a handful of these homes could replace many people’s incomes.

New Orleans

High interest rates have deeply affected housing prices in New Orleans, with activity stalling and prices dropping by nearly 8% year over year, according to our data. Add in the cost of flood and homeowners insurance—amongst the highest in the country—and New Orleans appears to have reached its tipping point for home sales.

That said, with median prices still an affordable $235,150 and median rents at $1,619, New Orleans still makes sense numbers-wise. The stumbling block is homeowners insurance, which, at an average of $5,496 per year, is over double that of the rest of the state, as well as the U.S. average of $2,511.25. Insuring a home here is the equivalent of adding around $200 to your monthly mortgage payment. 

How To Interpret This Data

If you’re looking at this list or the spreadsheet thinking, “What is a good RTP?” That’s a great question! That is a personal choice for investors, but I’ll share my thoughts. 

For many years a lot of investors subscribed to something known as the 1% rule. It basically stated that any deal you pursue should have an RTP above 1%. Furthermore, some people only want to invest in markets where the average RTP is 1%. Personally, I don’t subscribe to this rule for a few reasons. 

1. It was developed over a decade ago during the cash flow outlier period I mentioned above. It was realistic back then to find plenty of deals with an RTP over 1%. Now, it’s no longer a useful rule of thumb. You need to adjust to current-day market conditions, and religiously following the 1% rule is going to prevent you from getting in on deals that are very strong by today’s standards. Some of my best deals, even my highest cash-flowing deals, didn’t meet the 1% rule at the time of purchase. 
2. RTP is just a proxy for cash flow—not a precise measurement. You shouldn’t decide to pursue or abandon any deal until you’ve fully run the numbers. RTP alone should not be used to make investing decisions. You need to account for taxes, insurance, and other expenses. Additionally, you need to factor in rent growth. If rent grows in your market, the RTP will improve over time. 
3. I love using RTP to screen markets for cash flow potential, but remember the data above is just the average. That means, by rule, there are deals with better RTPs than the city’s average and deals with worse RTPs than the city’s average. For example, in El Paso, the average RTP is 0.69%, but I guarantee committed investors can find deals with a much higher RTP than 0.69% and likely even above the 1% rule. Generally speaking, any market with an RTP above .6% has the potential for cash flow deals, which all of the markets above have.

Conclusion

Although cash flow potential, as measured by RTP, has declined over the last several years, many markets in the U.S. still offer strong cash flow potential across the board. As my analysis shows, they are largely concentrated in Texas and some spots in the Southeast and Midwest. But that being said, plenty of other markets offer cash flow potential.

And remember, this data is just averages! It doesn’t reflect the best possible deal in each city, it doesn’t factor in rent growth or value add either. These are broad metrics meant to help you narrow down cities for investment consideration. They are not meant to evaluate the potential of any individual deal or sub-market.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.