Buying First Rental Property out of State. What areas are best?

[Jack Lundholm]

Hello, 

I have been considering making an out-of-state investment in real estate for some time-- in part because of the prices in my area (CA). I am not looking to do wholesaling or flipping, but rather invest in rental properties. I have spent months looking at a few specific areas and was hoping to get some feedback from the pros (or at least, someone who knows the areas in question). 

The first area I was looking at is metro Detroit. I know its reputation well, but it still provides an interesting opportunity with good cash-flow and high cap rates. I am not at all concerned for my personal safety while traveling in Detroit, but rather the damage that scavengers could do to a property if there was ever a vacancy. The other concern I have is finding insurance for the house, given Detroit's somewhat notorious reputation it seems like it may be a struggle to insure just one rental property. 

The second area I am particularly interested in is the Rochester N.Y. area, especially properties around the university. Obviously, there are complications in this too, as students can, at times, be destructive to a property; however, I doubt they would steal the copper piping or do anything deleterious to that extent (you never know, though). Of course, there are other areas in N.Y that are also interesting, such as Albany and Syracuse-- though I have not done nearly as much research into those areas. 

I would like to keep the actual purchase price of the house around 30-40k. Sticking in this price range would allow me to budget for some necessary remodeling, and have a cash reserve set aside to cover future damages. I would not be taking a loan out to pay for the house, it would be a cash deal. I would also plan on doing the remodeling myself, as I am quite well proficient at working on projects of this nature. 

My quandary comes down to the main principal of real estate: Location, Location, Location. Which one provides a safer bet for cash flow and stable renters?  Any advice at all would be greatly appreciated.