Top 10 Real Estate Markets for Cash Flow in 2024
Real Estate Investor · Member since 2017 · 10 posts · 3 votes
Top 10 Real Estate Markets for Cash Flow in 2024
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Realtor · Edinburg, TX · Member since 2020 · 34 posts · 12 votes
2yRealtor here in Mcallen!
McAllen, TX is a border town located in the Rio Grande Valley. The RGV has four counties Willacy, Hidalgo, Cameron and Starr County with a population of 2.4 million. Land area spans from Rio Grande City to South Padre Island.
I think it's not heard of often bc we're not as mainstream as other big cities and we are also a border town so cartel violence tends to be the issue that comes up.. but Mcallen has actually been ranked top 3 in one of the safest cities to live in in 2023.
"McAllen was recognized as the third safest city by SmartAssest.com, which analyzed a core set of common safety factors, including the following five metrics: violent crime, property crime, vehicular mortality rate, drug poisoning mortality rate and the percentage of the population engaging in excessive drinking."
The RGV has expanded immensely in the past couple of years and we've had an influx of people coming in from out of state bc of the affordability as well. It's an area to keep in mind and Id love to talk about it more to anyone who's considering in investing out here!
17 Replies
- Real Estate Agent · Rochester, NY · Member since 2020 · 148 posts · 28 votes2y
I can’t speak for the other cities, but as an agent in Rochester, NY, I can agree with this city. Rents are fairly high in comparison to the prices, but, I am seeing quite a bit of tenants not paying, and it’s not a landlord friendly state.
- Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes2y
It also cracks me up that Flint is on this list but not Detroit.
Maybe they're filtering purely by numbers with no regard to the quality of the city/area?
No clue.
- Realtor · Edinburg, TX · Member since 2020 · 34 posts · 12 votes2y
Realtor here in Mcallen!
McAllen, TX is a border town located in the Rio Grande Valley. The RGV has four counties Willacy, Hidalgo, Cameron and Starr County with a population of 2.4 million. Land area spans from Rio Grande City to South Padre Island.
I think it's not heard of often bc we're not as mainstream as other big cities and we are also a border town so cartel violence tends to be the issue that comes up.. but Mcallen has actually been ranked top 3 in one of the safest cities to live in in 2023.
"McAllen was recognized as the third safest city by SmartAssest.com, which analyzed a core set of common safety factors, including the following five metrics: violent crime, property crime, vehicular mortality rate, drug poisoning mortality rate and the percentage of the population engaging in excessive drinking."
The RGV has expanded immensely in the past couple of years and we've had an influx of people coming in from out of state bc of the affordability as well. It's an area to keep in mind and Id love to talk about it more to anyone who's considering in investing out here!
- 2yMichael SmytheBusiness MemberReal Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
@John Michaels not aware of any growth in Flint, but there is a TON going on in Detroit!
Planning on attending the NFL Draft this weekend and enjoying all the positive vibes with the expected 400k out-of-towners.
PM us if you want to know more about what's happening in Detroit:)
Logical Property Management4.9457 Reviews - Investor · Miami, FL · Member since 2015 · 355 posts · 268 votes2y
You have to be careful with these lists. If rents are high compared to sales price, then you have to ask - why aren't these renters buying? The answer is usually due to no savings, poor credit score, lower income, etc. If this is your tenant base then your rent roll may be high but your probability of actually collecting that rent roll number is low.
Quote from @John Michaels:
I came across this BP thread listing the Top 10 Real Estate Markets for Cash Flow in 2024
https://www.biggerpockets.com/blog/best-real-estate-markets-...However, it didn't mention some of the markets I see talked about the most like
Ohio and Tennessee etc I don't see anyone talking about McAllen or Idessa Texas.
What am I missing? Would you agree with this list ? It was printed in January.McAllen, Texas
Odessa, Texas
Corpus Christi, Texas
El Paso, Texas
Decatur, Illinois
Fayetteville, North Carolina
Mobile, Alabama
Lubbock, Texas
Rochester, New York
Flint, MichiganFlint HELL NO, Funny no mention of OHIO, this is exactly why I tell everyone stay off the internet its a waste of time.
- Real Estate Investor · Member since 2017 · 10 posts · 3 votes2y
Quote from @Bob S.:
Quote from @John Michaels:
I came across this BP thread listing the Top 10 Real Estate Markets for Cash Flow in 2024
https://www.biggerpockets.com/blog/best-real-estate-markets-...However, it didn't mention some of the markets I see talked about the most like
Ohio and Tennessee etc I don't see anyone talking about McAllen or Idessa Texas.
What am I missing? Would you agree with this list ? It was printed in January.McAllen, Texas
Odessa, Texas
Corpus Christi, Texas
El Paso, Texas
Decatur, Illinois
Fayetteville, North Carolina
Mobile, Alabama
Lubbock, Texas
Rochester, New York
Flint, MichiganFlint HELL NO, Funny no mention of OHIO, this is exactly why I tell everyone stay off the internet its a waste of time.
Does that include Bigger Pockets lol ?
- Real Estate Investor · Member since 2017 · 10 posts · 3 votes2y
Quote from @Robert Rixer:
You have to be careful with these lists. If rents are high compared to sales price, then you have to ask - why aren't these renters buying? The answer is usually due to no savings, poor credit score, lower income, etc. If this is your tenant base then your rent roll may be high but your probability of actually collecting that rent roll number is low.
That's a good point but isn't the main reason people rent vs not buying a lot of the time is because they don't have the down payment?
- Real Estate Investor · Member since 2017 · 10 posts · 3 votes2y
Quote from @Nydia Rodriguez:
Realtor here in Mcallen!
McAllen, TX is a border town located in the Rio Grande Valley. The RGV has four counties Willacy, Hidalgo, Cameron and Starr County with a population of 2.4 million. Land area spans from Rio Grande City to South Padre Island.
I think it's not heard of often bc we're not as mainstream as other big cities and we are also a border town so cartel violence tends to be the issue that comes up.. but Mcallen has actually been ranked top 3 in one of the safest cities to live in in 2023.
"McAllen was recognized as the third safest city by SmartAssest.com, which analyzed a core set of common safety factors, including the following five metrics: violent crime, property crime, vehicular mortality rate, drug poisoning mortality rate and the percentage of the population engaging in excessive drinking."
The RGV has expanded immensely in the past couple of years and we've had an influx of people coming in from out of state bc of the affordability as well. It's an area to keep in mind and Id love to talk about it more to anyone who's considering in investing out here!
Thanks Nydia, I will message you : )
- Investor · Miami, FL · Member since 2015 · 355 posts · 268 votes2yYes, as I said, no savings (or saving ability). The highest median sales price on that list was Lubbock, Texas at $156,000. You can put as little as 3.5% as your down payment. You're telling me that someone can't scrape together $5,460 to own their own home and be in a better financial position than renting? Again, that's the kind of tenant base you will be dealing with.
Quote from @John Michaels:
Quote from @Robert Rixer:
You have to be careful with these lists. If rents are high compared to sales price, then you have to ask - why aren't these renters buying? The answer is usually due to no savings, poor credit score, lower income, etc. If this is your tenant base then your rent roll may be high but your probability of actually collecting that rent roll number is low.
That's a good point but isn't the main reason people rent vs not buying a lot of the time is because they don't have the down payment?
- Miami, FL · Member since 2022 · 60 posts · 39 votes2y
Looks about right - here's also a list of the top cash-flowing cities if you're interested in major metros
- Texas can be good to find better value for properties than other parts of the country. I bought in the Rio Grande Valley, where McAllen, TX is in. However, be aware that for investors (who do not live in the property as their primary residence), there is NO LIMIT to how much your property appraised value, and therefore your property taxes, can increase from year to year! (If you live in the property so that you can claim the Homestead Exemption, your property appraisal can "only" go up a max of 10% per year. But if is a rental, there is no limit to the increase.)
Quote from @John Michaels:
I came across this BP thread listing the Top 10 Real Estate Markets for Cash Flow in 2024
https://www.biggerpockets.com/blog/best-real-estate-markets-...However, it didn't mention some of the markets I see talked about the most like
Ohio and Tennessee etc I don't see anyone talking about McAllen or Idessa Texas.
What am I missing? Would you agree with this list ? It was printed in January.McAllen, Texas
Odessa, Texas
Corpus Christi, Texas
El Paso, Texas
Decatur, Illinois
Fayetteville, North Carolina
Mobile, Alabama
Lubbock, Texas
Rochester, New York
Flint, Michigan
I bought a 4 plex in 2023 and the appraisal district valued it around $407k. This year the valued it at $490k!! Nothing has changed about my property - I made no improvements - that caused it to increase 20% in value in 1 year! A 20% increase in property taxes (or anything higher than 5%) can really screw up your multi-year pro-forma and your projected returns.
In Texas, you are allowed to protest the value the appraisal district appraises your property at. And it can be definitely worth it, IF you win. I paid about $10,000 in property taxes last year. Now I am looking at $12,000. So I will definitely try to protest the appraisal increase. And there are professional tax protesting companies in Texas. They are usually paid a fee of 25%, 30%, or 35% on the taxes they save you, IF they are able to achieve a property value reduction.
In my example, I paid $10,000 on a property valued (by the appraisal district) at $407,000. $10,000/$407,000 = 2.46% tax rate (approx). This year my property is valued by the appraisal district at $490,000. $490,000 x 2.46% = $12,054 potential property tax bill. Let's assume the tax protester I hire charges 30% on any tax savings achieved, AND they are able to lower my appraised value. Let's say they convince the appraisal district to lower the value from $490,000 to $445,000. They knocked $45,000 off my value. $45,000 x 2.46% = $1107 in tax savings. I would have to pay the protester $1107 x 30% = $332.10. This does help, but my property taxes still went up more than 9%! ($445,000-407,000)/407,000 = 9.3% increase.
I also don't think it's common to convince the appraisal district that your property did not appreciate at all, unless you can back it up with pictures that your property was damaged or is in worse shape that it was the year before. The best I've seen anecdotally is just to limit the increase to 10%, but again, many other states limit the increase to 5% or less. So 10% is still high, IMO.
So I'm not saying McAllen and the Rio Grande Valley aren't good places to invest. But just be aware that the property taxes are hard to control, and you would want to fight them every year (b/c the appraisal district will likely increase your property valuation every year). Good luck! - Member since 2022 · 32 posts · 14 votes2y
Quote from @Derrek H.:
Texas can be good to find better value for properties than other parts of the country. I bought in the Rio Grande Valley, where McAllen, TX is in. However, be aware that for investors (who do not live in the property as their primary residence), there is NO LIMIT to how much your property appraised value, and therefore your property taxes, can increase from year to year! (If you live in the property so that you can claim the Homestead Exemption, your property appraisal can "only" go up a max of 10% per year. But if is a rental, there is no limit to the increase.)Quote from @John Michaels:
I came across this BP thread listing the Top 10 Real Estate Markets for Cash Flow in 2024
https://www.biggerpockets.com/blog/best-real-estate-markets-...However, it didn't mention some of the markets I see talked about the most like
Ohio and Tennessee etc I don't see anyone talking about McAllen or Idessa Texas.
What am I missing? Would you agree with this list ? It was printed in January.McAllen, Texas
Odessa, Texas
Corpus Christi, Texas
El Paso, Texas
Decatur, Illinois
Fayetteville, North Carolina
Mobile, Alabama
Lubbock, Texas
Rochester, New York
Flint, Michigan
I bought a 4 plex in 2023 and the appraisal district valued it around $407k. This year the valued it at $490k!! Nothing has changed about my property - I made no improvements - that caused it to increase 20% in value in 1 year! A 20% increase in property taxes (or anything higher than 5%) can really screw up your multi-year pro-forma and your projected returns.
In Texas, you are allowed to protest the value the appraisal district appraises your property at. And it can be definitely worth it, IF you win. I paid about $10,000 in property taxes last year. Now I am looking at $12,000. So I will definitely try to protest the appraisal increase. And there are professional tax protesting companies in Texas. They are usually paid a fee of 25%, 30%, or 35% on the taxes they save you, IF they are able to achieve a property value reduction.
In my example, I paid $10,000 on a property valued (by the appraisal district) at $407,000. $10,000/$407,000 = 2.46% tax rate (approx). This year my property is valued by the appraisal district at $490,000. $490,000 x 2.46% = $12,054 potential property tax bill. Let's assume the tax protester I hire charges 30% on any tax savings achieved, AND they are able to lower my appraised value. Let's say they convince the appraisal district to lower the value from $490,000 to $445,000. They knocked $45,000 off my value. $45,000 x 2.46% = $1107 in tax savings. I would have to pay the protester $1107 x 30% = $332.10. This does help, but my property taxes still went up more than 9%! ($445,000-407,000)/407,000 = 9.3% increase.
I also don't think it's common to convince the appraisal district that your property did not appreciate at all, unless you can back it up with pictures that your property was damaged or is in worse shape that it was the year before. The best I've seen anecdotally is just to limit the increase to 10%, but again, many other states limit the increase to 5% or less. So 10% is still high, IMO.
So I'm not saying McAllen and the Rio Grande Valley aren't good places to invest. But just be aware that the property taxes are hard to control, and you would want to fight them every year (b/c the appraisal district will likely increase your property valuation every year). Good luck!
Thanks, I never knew this about the no limit. I don't own any investment properties yet but am heavily considering Texas. I know it may vary by municipalities but do they tend to reappraise the property upon purchase? Where I live in NJ, my township does not so property taxes are stable when buying. - Member since 2021 · 17 posts · 0 votes2y
Surprised there is no mention of Florida cities!
- 2yGino BarbaroPro MemberRental Property Investor · St Augustine, FL · Member since 2014 · 2k+ posts · 1k+ votes
These are markets that have higher cap rates, lower pricing, and produce more cash flow. I've invested in Rochester, NY, and although the properties cash flowed, there is very little appreciation. The assets are old, need work constantly, the cost of living is high, and there is no job growth.
I wouldn't solely focus on cash flow. Some of the Texas markets are better, and I would look into the TN and North Carolina markets. They all have jobs, populations growing, and you may give up a bit on cash flow, but will have appreciation.
Gino
Hi John-
Thanks for sharing this list of Top 10 Real Estate Markets for Cash Flow in 2024.
I too found it interesting to see Flint, MI on the list but as a graduate of the University of Michigan-Flint and Mott Community College in Flint and I am back there often enough to say Flint has done a lot to develop itself and a lot of money has been poured into Flint after the water crisis.
I say good for Flint. They deserve some positive press and love.
Another cashflow market I did not see on the list is Lansing, MI which I personally think is fantastic with low property taxes, strong rental demand, low cost of living and service costs with constant economic development as a result of being the State capital. Lot to like.
To your success!
- Rental Property Investor · Toronto · Member since 2018 · 16 posts · 2 votes2y
Quote from @Preston Garcia:
I can’t speak for the other cities, but as an agent in Rochester, NY, I can agree with this city. Rents are fairly high in comparison to the prices, but, I am seeing quite a bit of tenants not paying, and it’s not a landlord friendly state.
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