City Criteria - Investing out of State

[Tim O'Connell]

Hi everyone, I am new to real estate investing and I just wanted to get some feedback about the criteria I have developed for identifying potential cities for buy-and-hold rental properties (small multi-family) that cash flow. I currently live in the Phoenix area and feel that the returns here are not sufficient for what I am looking for. My current criteria is below. Thanks in advance for any feedback.

1. Be one of the 250th largest MSAs.

2. Have positive population growth over the past 5 years.

3. Have a positive economic outlook.

4. Have rental growth over the past 2 years.

5. Have a reasonable home price to rent ratio 

6. After-tax Cash-on-cash ROI of 10%+

[Eric Delcol]

Hey Tim,

We are also based out of Phoenix but have decided to focus on another market as Phoenix prices have shot up dramatically over the past 18 months.

We are now in Tampa. The returns are great and prices are still recovering.

You might also want to take a look at Kansas City.