Best Price to Rent Cities

[Jared Dodson]

Hello,

Would love to start a current list on BP (if one doesn't currently exist) of cities with the best Price to Rent ratios for SFHs or Multi.

If you know of a city (big or small) with great price to rents please respond to this post with:

1. Name of city/neighborhood (zipcodes if  you have them)

2. Average Price to Rent ratios you have experienced on what types of investments (SFM or Multi)

3. Any other relevant details. The more descriptive the better!

Cheers,

Jared

[Jeff Kehl]

I think the problem with this approach is that the list you asked for and that was provided on CNN/Money was interesting but really doesn't tell you much.

Also they do it backwards from how I normally would which makes my head hurt but, let's say you were looking for a 1% deal, $1000 monthly rent on $100k house. That is about an 8.3 on the CNN/Money list. The only city that makes that on their list is Detroit. Should you go invest in Detroit based on that? I don't think so. All that tells you is Detroit has a lot of low priced homes which should make you stay away.

The other problem is their list is based on median home prices. Most investors shoot for properties below the median so what the median home rents for does not matter.

In most markets you can find rentals with certain RV ratios but it doesn't mean you want to own them. In my market I could go buy a 2% deal off the mls right now but I do not because it's an old house in a bad neighborhood that would lose me money over time.

Two suggestions for finding a good market. First, look at lists of cities ranked by employment, employment growth, net in-migration, cost of living and other economic factors and find the top 3 on those lists and then start looking at properties and neighborhoods in those cities until you find one that grabs you. Second, look where the turn-key companies are focusing, they've usually done some of that research and you can piggyback on that.

Personally I think the Southeast U.S offers the best economic growth with the lowest cost of living so that's where I focus. But I also live in that area and you should maybe focus closer to home.