No SFR props make sense for rental in Birmingham area

[Joshua Shockley]

I’m looking to buy a single family home I can move into and build some sweat equity then move out and rent, however nothing meets the 1% rule right now (rents for 1% of sales price) or even 0.8% that is remotely safe to move my family into. I’m starting to think we are in a bubble. 2014 -2017 price increases of 30-40% Thoughts?

[Thomas S.]

Buying a SFH that will cash flow is very difficult due to the market being driven by home owners. Home owners do not pay based on actual value they primarily make emotional decisions and will over pay. SFHs rarely make good investment rental properties in areas that are overpriced and continuing to appeciate.

Your best option is to purchase a purpose built multi unit that investors normally purchase. You will more likely find a better cash flow investment than any SFH.