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Where have all the cash flowing properties gone? With high interest rates, low inventory, and purchase prices not budging, it’s becoming harder and harder to find your margins. It’s even harder to find a cash flowing property when your investment budget is modest. That’s why we loved Dave Meyer’s recent Instagram post covering his top five cash flowing market picks with average purchase prices under 200k. Sometimes all you need is someone to help you stop boiling the ocean when you’re looking for your next deal.
Meyer looked at average purchase prices but also reviewed a few other positive financial indicators in each area to support his recommendations. We pulled those together along with a few more reasons these markets are worthy of further investigation. Of course, nothing is all roses, but there are sure to be diamonds in the rough here!
1. Syracuse, New York
Why we like it:
- Median purchase price: 196k
- Average rent: $1,500/month
- Rent-to-price ratio: ~0.80
- Home prices are still up 11% YoY.
- New technology companies are moving into the area.
- Good for added value, buy and hold investors. According to a recent study, only 27% of Syracuse housing is in “good or excellent condition,” which means investors have an opportunity to buy low, fix up, and enjoy both forced and market appreciation.
2. Lansing, Michigan
Why we like it:
- Median purchase price: 191k
- Average rent: $1,000/month
- Rent-to-price ratio: 0.73
- Fastest growing “Midwest-metro,” according to a study done with U.S. Census data, many moving from the Detroit area.
- Michigan State University has reported off-the-chart enrollment over the last few years, bringing record levels of young professionals into the area.
3. Scranton, Pennsylvania
Why we like it:
- Median purchase price: 176k
- Average rent: $1,200/month
- Rent-to-price ratio: 0.68
- Buyers are getting properties for 3% under list price, which means you can probably find a deal, helping to offset the lower RTP.
- Home prices may continue their upward trajectory. According to Zillow’s Home Value Index, Scranton home values are up 4.8% year over year (March saw a 1.5% increase month over month alone).
4. Toledo, Ohio
Why we like it:
- Median purchase price: 173k
- Average rent: $900/month
- Rent-to-price ratio: 0.52
- Excellent population growth.
- Lead indicators like inventory, new listings, and days on market suggest that prices may keep going up. This is a great location for long-term holds.
- Strong rental demand and a relatively low vacancy rate.
- Diverse economy (manufacturing, healthcare, education).
5. Springfield, Illinois
Why we like it:
- Median purchase price: 171k
- Average rent: $1,300/month
- Rent-to-price ratio: 0.65
- Strong fundamentals (low unemployment, fair wages, short commutes, etc.) and strong rent.
- AirDNA ranks Springfield as the fourth best location to invest in STRs in 2023 based on rental demand, growth, cash flow, and regulatory risk (2 out of 10).
For our full analysis of the top cash flow markets in 2023, read this article here.
Rental price data from Zillow.
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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.
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