What are the best markets for cash flowing rental properties?

[Axel Meierhoefer]

I just finished listening to podcast 257 and wonder which out of state places are probably the best to invest into for rental properties (not rehab) for 2018?

[Jordan Moorhead]

@Andre Crabb I can't find the post you're referring to

[George Pauley]

Originally posted by @Axel Meierhoefer:

Some people outside of BP suggested the Davenport, IA, area. Any thoughts?

I recently bought in Davenport with pretty good success.  (Netting about $3600/year on $20k down.)  I am a bit worried that Illinois issues will jump across the river and effect the Iowa economy.

[Andre Crabb]

Originally posted by @Jordan Moorhead:

Midwest and Southeast regions excluding major cities.

There have been a bunch of great blogs written on this site about cities that actually cashflow. Stay away from Forbes hot cities in most cases.

 @Jordan Moorhead On page 1 of this thread ☝️

[Axel Meierhoefer]

@George Pauley Did you do that with Easystreet or another turnkey company?

[George Pauley]

Originally posted by @Axel Meierhoefer:

@George Pauley Did you do that with Easystreet or another turnkey company?

Yes through Easy Street, though I know them as Relocation Reps:  http://www.relocationrepspm.com/ via a recommendation from another turnkey company in Memphis that I've done a lot of business with.  I'm actually in the process of buying my second property from Relocation Reps, so I guess my experience with them wasn't too bad!  ;)

[Ryan Plesz]

I live in CT and every day about 4 out of 5 people I talk with cannot wait to leave the state. Many already have bought a home down south and are just waiting for retirement to pack up and leave. Van #'s show the population decreasing. No companies are moving to the state they are moving out of the state....except some manufacturing due to military spending. Jobs mean everything. It's nice to have good schools but without the jobs and with funding for the schools almost non existent those good schools can change to bad schools. The younger generation is not moving here, the population is getting older and that is not good. I love the way someone previously mentioned how well CT residents are paid. Maybe in the tri-state area but when you look at the overall population and take into account the high expenses the majority is just scraping by. I work in a finance company with over 2000 people around the Hartford area, about 80% of the people I work with don't have 3 months salary saved up and a lot live paycheck to paycheck....we have had 1% increases in salary over the last 10 years.....how is that good pay? When you make 50 to 60k in CT you are scraping by especially if you have children. Healthcare is outrageous, electricity, heating oil, gas, TAXES are all the highest in the nation. A lot of the state is on assisted living....what do you think is going to happen when the money runs out and it is running out now. We can only hope that the next elected officials in office do the right thing and fix the budget issues and cut taxes to make CT a place where companies will want to move to. The best thing we have going for us is our proximity to NYC and Boston and that our property prices are much less then those higher prices cities....but those two cities offer a lot more in educated work force, technology, logistics. I'm not buying here now, but if we do get a Republican majority in this Fall with the right plans then I may start investing because it could be the bottom....as long as the overall economy keeps doing well. Job wise we took a big hit in 2008 and never came back like the majority of the country and when the next recession hits we will not be spared...companies will look to save money and one way to do so will be to move to a state with lower taxes, lower wage costs, lower energy costs. I love this state but he government has failed us.

[Nick Rutkowski]

I believe the saying is true, if the numbers work then it’s a good deal. I bought a $25,000 duplex that cash flows $2000/mo, and I net around $15,000. Call it a small deal, but making $15,000/year off of a $25,000 investment seems to work well for me.

[Bala A.]

At the moment I would have to say the Detroit market hands down.

However, you need to be selective with neighbourhoods, otherwise you will go backwards

[Eric Veronica]

Ohio Michigan Indiana are all pretty solid. 

[Bala A.]

Detroit as a market can be tricky for the novice investor. For the well planned it is the ideal place to Cash flow. Mum and Dad Investors who have executed their strategy very well own 50-100 rentals and have created a solid income stream. It depends on the team that they are partnering with on the ground. Whilst there are many good ones, there are some that bring disrepute to the Detroit investor market place. Location is the key. Bad areas attract bad tenants. And we will have a continous stream of bad news and headaches for the investors. A quick look at the market where a Good property in a Good location can be purchased for the following numbers:

Price - 45,000

Rent - 850 p.m (10,200 p.a.)

Management fee - 816 p.a. (8% management fee)

City Taxes - 1150 p.a.

Insurance - 560 p.a.

Maintenance - 600 p.a. (American Home Shield Warranty)

Free Cash Flow - 7074 p.a.

A word of caution - This could be an ideal situation.

But many fail to see this outcome as they are working with the wrong property management and do not have a process in place for rent collections. As a landlord you would need your PM sending out the 7 day late payment notices as a set process and rule of thumb. Communication with the tenant is critical.