Best cities to buy affordable rental properties (-200k)?

Question

I'm a new-comer from Australia, working in China with my Mexican wife. We want to buy our first property in the US with cash, using it strictly for cashflow.

Our budget is between 150-200k.

What cities would generally be recommended for the lowest buy in price with the best rental returns?

Thank you very much.

Patrick Prunty · Answer

@Nathan Asher Robson

I can vote for Clarksville, TN...I have purchased more than 85 properties here...it is tough these days post 2020 however to find anything in a good neighborhood for less than 200k.

Why buy in cash?  The whole point of real estate is leverage.  I would also suggest, from my experience, at least with single family homes, no one gets rich on cash-flow.  The gold in single family home rentals is appreciation, principal paydown on your loan and tax write offs...

John Williams · Answer

There are great opportunities at that price point here in Clarksville, TN

Eliott Elias · Answer

Killeen Texas.

Cory J Thornton · Answer

@Nathan Asher Robson - There are stable markets in most states where someone can find and achieve cashflow. If you have any high trust relationships in the US, then the best thing to do may be to find/build the team that can support our goal. I think it was Jim Collins who coined the phrase "first who then what."

If you do not have established relationships to help you in this pursuits, then I would look at the demographic shifts nationally and the policy trends of each market. California lost something like 400K residents in 2022. Where did they go? Is that place more tenant friendly or landlord friendly? What is the state income tax structure and how will that apply to you as an out of state/country investor?

As someone who lives, works and invests in North Carolina, I have a strong bias for NC. We picked up a little over 130K new residents in our state in 2022. We have around 100 counties in NC and only 20 of them are experiencing strong growth trends. Most of the counties surrounding the city of Raleigh and Charlotte are absorbing most of that growth. Finding cash flowing investments inside each of those cities is not achievable. If someone pushes out to a 45 minute radius of each city, then you can start finding a few deals that pencil out.

I am very interested to see how everyone else responds. Best of luck on your investing journey. Keep us all posted along the way. If there is anything I can do to help, feel free to shoot me a DM or a text and we can set up a time to chat.