The Top 10 Cities for Investors on a Budget

The Top 10 Cities for Investors on a Budget

Real Estate Agent · Scottsdale, AZ · Member since 2011 · 471 posts · 296 votes

I thought this was interesting from Realtor.com.  I was happy to see Phoenix on the list!  Although I find that it's highly competitive in my market...so there goes your budget if you want to submit the highest offer! ;)) 

 If your city is on this list, are you finding good deals as an investor?

To find the best budget-friendly places to invest, they looked at single-family homes that cost $232,500 or under, which is the median price of existing homes nationwide in April, according to NAR). Their analysis also included other factors, which is why some markets with lower appreciation appear higher on the list.)

The top 10 cities for investors on a budget:

  1. Jacksonville, Fla.: 3.6%
  2. Tampa, Fla.: 4.4%
  3. Orlando, Fla.: 3.7%
  4. Chicago, Ill.: 4.2%
  5. Detroit, Mich.: 3.1%
  6. Las Vegas, Nev.: 4.7%
  7. Cincinnati, Ohio: 3.4%
  8. Phoenix, Ariz.: 4.8%
  9. Cleveland, Ohio: 3.4%
  10. Minneapolis, Minn.: 3.4%

HomeUnion also identified the following metros as where buyers can see the largest first-year rental returns as a landlord:

  1. Cleveland, Ohio: 11.1%
  2. Columbia, S.C.: 9.7%
  3. Birmingham, Ala.: 8.5%
  4. Pittsburgh, Pa.: 8.4%
  5. Milwaukee, Wis.: 8.4%

Source: “The Best Cities to Invest in Real Estate on a Budget,” realtor.com® (July 25, 2016)

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Property Manager · Griffith, IN · Member since 2015 · 1k+ posts · 913 votes
10y

It's often overlooked (possibly because it's more of a region vs a single city) but NW Indiana is a rental dream. Hammond, Lake Station, Merrillville, Griffith, and others are locations were you can get 8-10% buying turn key and 10-12-15% or more if you are involved more. It's pretty easy to get rentals in the $65-85K range that get $1000-1250 or more in rents. Taxes are crazy low and Indiana is a very land lord friendly state. Plus we're seeing some really good appreciation this year in those markets. 

See this reply in the discussion

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  • Real Estate Investor / Joint Venture Specialist. · Crown Point , IN · Member since 2014 · 1k+ posts · 238 votes
    10y

    Good deals are still to be had here in Chicago 

  • Investor · Chicago, IL · Member since 2013 · 2k+ posts · 1k+ votes
    10y
    Originally posted by @Bevla Reeves:

    I thought this was interesting from Realtor.com.  I was happy to see Phoenix on the list!  Although I find that it's highly competitive in my market...so there goes your budget if you want to submit the highest offer! ;)) 

     If your city is on this list, are you finding good deals as an investor?

    To find the best budget-friendly places to invest, they looked at single-family homes that cost $232,500 or under, which is the median price of existing homes nationwide in April, according to NAR). Their analysis also included other factors, which is why some markets with lower appreciation appear higher on the list.)

    The top 10 cities for investors on a budget:

    1. Jacksonville, Fla.: 3.6%
    2. Tampa, Fla.: 4.4%
    3. Orlando, Fla.: 3.7%
    4. Chicago, Ill.: 4.2%
    5. Detroit, Mich.: 3.1%
    6. Las Vegas, Nev.: 4.7%
    7. Cincinnati, Ohio: 3.4%
    8. Phoenix, Ariz.: 4.8%
    9. Cleveland, Ohio: 3.4%
    10. Minneapolis, Minn.: 3.4%

    HomeUnion also identified the following metros as where buyers can see the largest first-year rental returns as a landlord:

    1. Cleveland, Ohio: 11.1%
    2. Columbia, S.C.: 9.7%
    3. Birmingham, Ala.: 8.5%
    4. Pittsburgh, Pa.: 8.4%
    5. Milwaukee, Wis.: 8.4%

    Source: “The Best Cities to Invest in Real Estate on a Budget,” realtor.com® (July 25, 2016)

    Thanks for sharing this Bevla.

    I love Chicago for fix-n-flip and rent to own. I do, however love Cincinnati Ohio for buy-and-hold.

  • Chicago, IL · Member since 2016 · 17 posts · 4 votes
    10y
    Nick Feliciano I'm buying on the Southside of Chicago. What parts of Chicago do you work in?
  • Real Estate Agent · Scottsdale, AZ · Member since 2011 · 471 posts · 296 votes
    10y

    @Account Closed are you flipping or holding?

  • Chicago, IL · Member since 2016 · 17 posts · 4 votes
    10y
    Bevla Reeves holding. My first deal is house hacking a 2 flat. I am going to use the equity when I refinance for a second property.
  • Real Estate Agent · Chicago, IL · Member since 2014 · 173 posts · 85 votes
    10y

    @Bevla Reeves @Ben Anderson  I am currently house hacking my second 3 flat on the north side of Chicago and have had a great experience so far.

  • Real Estate Investor · Chicago, IL · Member since 2014 · 286 posts · 159 votes
    10y

    What do you mean by house hacking?

  • Real Estate Agent · Chicago, IL · Member since 2014 · 173 posts · 85 votes
    10y

    @Nancy Curran  I consider house hacking to be when you owner occupying a building that has more than 1 unit and you live in one unit while renting out the others to offset your monthly living expenses.  For me personally, it has allowed me to get into real estate with a less money out of pocket with being an owner occupant while also giving me first hand experience of being a landlord.

  • Investor · Vacaville, CA · Member since 2016 · 433 posts · 249 votes
    10y

    The same article also had best cash flow list:

    Those focused on getting a healthy flow of rental income from the get-go might want to cut this list out and put it on the wall:

    1. Cleveland, OH, at 11.1%
    2. Columbia, SC, at 9.7 %
    3. Birmingham, AL, at 8.5%
    4. Pittsburgh, PA, at 8.4%
    5. Milwaukee, WI, at 8.4%
    6. Cincinnati, OH, at 8.2%
    7. Memphis, TN, at 8%
    8. Greenville, SC, at 8%
    9. Tampa, FL, at 8%
    10. Philadelphia, PA, at 8%
  • Real Estate Broker · Cleveland, OH · Member since 2015 · 255 posts · 248 votes
    10y
    Cleveland, OH provides lower single and multifamily home prices and a rental market that allow for solid cash flow. Perfect for the investor on a budget. Feel free to reach out to discuss the market and the opportunities here, good luck!
  • Fremont, CA · Member since 2016 · 48 posts · 5 votes
    10y

    @Jad Boudiab would love to connect with you on my first deal. Let me know

  • Clayton MobleyPro Member
    Birmingham, AL · Member since 2014 · 875 posts · 947 votes
    10y

    @Bevla Reeves and @John P. Glad to see Birmingham, AL on both those lists! And those figures (at least for the Birmingham market) look like they are for cash purchases. When you finance and add-in the equity built by having tenants pay down loan principle, that return jumps to 22% in the first year! So many people get really caught up in chasing the 'hot' market in Memphis or Dallas, and forget that there are truly amazing investment opportunities all over the country. Thanks for posting!

  • Real Estate Investor / Joint Venture Specialist. · Crown Point , IN · Member since 2014 · 1k+ posts · 238 votes
    10y

    @Ben Anderson @Bevla Reeves 

    We fix and flip and do turnkey for out investors in Indiana and in Illinois. 

    Active projects in; Maywood, Aurora, Zion, Libertyville, Crystal lake in IL 

    Active Projects in; Crown point, Hobart, Merrillville, Griffith in IN 

    Completed homes that are listed in Maywood, McHenry, Northlake, in IL 

    Completed homes that are listed in Merrillville, Hammond in IN 

    Starting on homes in Portage, IN and Michigan city, IN 

  • Property Manager · Griffith, IN · Member since 2015 · 1k+ posts · 913 votes
    10y

    It's often overlooked (possibly because it's more of a region vs a single city) but NW Indiana is a rental dream. Hammond, Lake Station, Merrillville, Griffith, and others are locations were you can get 8-10% buying turn key and 10-12-15% or more if you are involved more. It's pretty easy to get rentals in the $65-85K range that get $1000-1250 or more in rents. Taxes are crazy low and Indiana is a very land lord friendly state. Plus we're seeing some really good appreciation this year in those markets. 

  • Chicago, IL · Member since 2016 · 17 posts · 4 votes
    10y
    Adrien S. Where do I start learning more about that market in northwest Indiana? I live on the south side of Chicago and the lower taxes there are very appealing.
  • Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
    10y
    Originally posted by @Bevla Reeves:

    I thought this was interesting from Realtor.com.  I was happy to see Phoenix on the list!  Although I find that it's highly competitive in my market...so there goes your budget if you want to submit the highest offer! ;)) 

     If your city is on this list, are you finding good deals as an investor?

    To find the best budget-friendly places to invest, they looked at single-family homes that cost $232,500 or under, which is the median price of existing homes nationwide in April, according to NAR). Their analysis also included other factors, which is why some markets with lower appreciation appear higher on the list.)

    The top 10 cities for investors on a budget:

    1. Jacksonville, Fla.: 3.6%
    2. Tampa, Fla.: 4.4%
    3. Orlando, Fla.: 3.7%
    4. Chicago, Ill.: 4.2%
    5. Detroit, Mich.: 3.1%
    6. Las Vegas, Nev.: 4.7%
    7. Cincinnati, Ohio: 3.4%
    8. Phoenix, Ariz.: 4.8%
    9. Cleveland, Ohio: 3.4%
    10. Minneapolis, Minn.: 3.4%

    HomeUnion also identified the following metros as where buyers can see the largest first-year rental returns as a landlord:

    1. Cleveland, Ohio: 11.1%
    2. Columbia, S.C.: 9.7%
    3. Birmingham, Ala.: 8.5%
    4. Pittsburgh, Pa.: 8.4%
    5. Milwaukee, Wis.: 8.4%

    Source: “The Best Cities to Invest in Real Estate on a Budget,” realtor.com® (July 25, 2016)

     Well I can't speak for some of the other cities, but I can tell you that Cleveland is really a great city to earn more for your investment. Housing here is still very affordable and the city is seeing a pretty significant population boom. We have been in the spotlight for some time now and it seems many people now want to live here as well. Rentals are in high demand.

    It is a great time to be in Cleveland!

  • Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    10y

    I'd be careful looking at lists like these. Sooo many factors are left out of them! If going off lists, I'd compare cities in no less than 3 or more lists (comparing different factors). More than that, know where the source is coming from. Half the time the people writing these things don't have a clue about how investments work.

    If they knew anything about cash flow, they wouldn't suggest half of those cities to invest in, because you won't find any cash flow in them.

  • Investor · Maryville, IL · Member since 2016 · 129 posts · 81 votes
    10y

    Should I say it?  Cleveland rocks!

    If I read correctly, these are for SFH? What about multis?

  • Real Estate Agent · Scottsdale, AZ · Member since 2011 · 471 posts · 296 votes
    10y

    @Account Closed You guys do nice work!!!

    How much are you spending per/sf, on average, for your fix-up costs?

  • Wholesaler · Saint Augustine, FL · Member since 2016 · 328 posts · 98 votes
    10y

    @Bevla Reeves very interesting info! I am wholesaling in Jacksonville, FL right now but my focus is large MF properties. It is still a very competitive market in both realms. Thanks for posting!

  • Investor · Blythewood, SC · Member since 2016 · 7 posts · 3 votes
    10y

    We're just getting started in the Columbia, SC market.  We think it has a lot of potential for many different reasons.  USC, Ft. Jackson and multiple large manufacturing companies moving to the state over the next 5 years.  Gonna be a good time for real estate in the south!

  • Flipper/Rehabber · Crown Point, IN · Member since 2009 · 482 posts · 216 votes
    10y

    Adrien is correct. I think Northwest Indiana is one of the most "ignored" areas in the country. It offers some great flipping areas and some great b&h areas as well. Taxes on properties out here are between 25 & 60% less than Illinois! Do investors realize how much that increases their bottom line? Just like Adrien said, you can buy properties in Indiana, all day long, in decent areas for less than $100k AND get up to $1300 a month in rent. In my humble opinion, those numbers are hard to beat! There's 2 major differences between the Illinois and Indiana market. 

    #1 - Acquisition costs are much lower in Indiana - not to mention rehab costs

    #2 - Taxes are much lower.

    Plus, the rents are just slightly below Illinois.

    The bottom line is, that you get a great bang for your buck in Indiana! I offer all my investors SFR's in Indiana that are from a hedge fund at .55 cents on the dollar. They're all off market properties. The owners are still living in the properties, so the homes homes aren't a "wreck" inside. Yet many of them refuse to cross the border into Indiana. It absolutely amazes me! There seems to be a stigma about Indiana. People think we're out in the "sticks" or something, I'm not exactly sure what it is. I grew up in Illinois and moved to Indiana to raise my family, because the cost of living is so much cheaper than Illinois. So don't be afraid to consider the "Hoosier" state. By the way, does anyone know what a Hoosier is? :)

  • Investor · Vacaville, CA · Member since 2016 · 433 posts · 249 votes
    10y

    @Scott Steffek that sounds interesting. Are there cities in NW Indiana besides Gary?  I don't understand your comments about the hedge fund. Are you wholesaling these homes you mention?  

  • Property Manager · Griffith, IN · Member since 2015 · 1k+ posts · 913 votes
    10y
    Originally posted by @John P.:

    @Scott Steffek that sounds interesting. Are there cities in NW Indiana besides Gary?  I don't understand your comments about the hedge fund. Are you wholesaling these homes you mention?  

     NWI has a population close to 1M. Gary is only a fraction of that. Really, it's a suburb of Chicago and cities merge into each other. Hammond is a solid rental market (listen to the podcast Sharad did at the end of 2015 @Sharad M.). Merrillville is a great market for rentals and flips. Most of Lake county, which represents the bulk of NWI population-wise, is a great market for flips and holds. 

  • Flipper/Rehabber · Crown Point, IN · Member since 2009 · 482 posts · 216 votes
    10y

    John,

    I don't want to violate the rules of advertising, but there are plenty of cities in N.W. Indiana for investing. We have some very good buy and hold areas and also some great flipping areas. There are cities out here where you can flip homes in the $100k range and they're are also cities where you can flip in the $500k range and everything in between. So Indiana has a wide variety of homes to choose from. There's also great buy and hold areas too. Here's some cities you might want to look up:

    Crown Point - upper end of price range. $150k - $500k 

    Merrillville - In the $90k to maybe $175k range - Great B&H area and also good area for flipping

    Dyer - Mid  to upper range. Probably from $125k- $300k

    Schererville - Mid to upper range. 

    Hobart - Great b&h area. Just have to have good tenants!

    Munster - High end - Probably between $180k- $900k in certain areas of the city

    Highland & Griffith - Good b&h and good flipping area. About $90k- $200k

    These are all estimates. it just depends on what part of town you're in. 

    I wholesale the homes and can also rehab them for long distance investors like you.

    I hope I answered your questions. 

    This is why I think Indiana is a gold mine. A lot of people who grew up in Illinois, end up moving to Indiana because the overall cost of living is so much lower than Illinois.  I'm out of Crown Point and we're only 30-40 minutes from Downtown Chicago. So the "big city" is there when you want it and not there when you don't. There's something for everyone! 

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