I often get asked from clients, “What are the best cities to purchase rental properties in?” Buying out-of-state properties can be challenging and risky. However, it is the only way some investors can find cash-flowing properties. Below are the most common markets of US cities where investors are buying in for 2015.
- Florida – Jacksonville, Orlando, Miami-Dade, Palm Bay, Tampa
- Georgia – Atlanta
- Texas – Austin, Houston, Dallas
- Colorado – Denver
- Tennessee – Memphis
- Las Vegas – Nevada
- Arizona – Phoenix
- Ohio – Toledo, Columbus
- Michigan – Detroit
- New York – Syracuse
There are several factors to consider when choosing the right real estate market in which to invest, and the right time to do it. Investors who are looking to build long-term wealth by acquiring cash-flowing rental properties, should consider the following factors before choosing their niche market.
Price to rent ratio: Low prices and high rents create the “cash flow” opportunity where the rents cover all expenses associated with owning a rental property on a monthly basis.
Location: Investors want to build their rental property portfolios in markets that have strong economies anchored by companies that provide thousands of jobs. You might also want to research where new shopping centers are being built, if the property is near a college, what kind of school district it’s in, what amenities are nearby. Look for an airport, beach, lake, mountains, and freeways.
Potential for home price appreciation over the next 3-5 years: Historically, we want to see a market that has achieved above-average appreciation rates over an extended period of time.
In conclusion, buying rental properties is one of the best ways to invest your money. Not only can you borrow the financing required to purchase (leveraging debt and inflation), but you can rent it out to tenants in order to pay for your mortgage — while ultimately earning the rights to own a rental property free and clear. That’s where CoreVest can assist you!
CoreVest is a leading provider of financing solutions to residential real estate investors. We provide attractive long-term debt products for stabilized rental portfolios as well as credit lines for new acquisitions. For more information about how CoreVest can help grow your rental and rehab business, please call 844.223.2231 or submit our contact form.