10 “High Cash Flow” Real Estate Markets of 2022

[@steveelling9604]

Re Akron and Cleveland: Ohio real estate taxes are absolutely brutal. A $150K house in Cleveland pays about $3,600 annually in taxes, which is going to take a massive bite out of your $1,400 monthly tenant payment in an affordable rental area like Cleveland Heights. Add another $70 per month for insurance, $130 for a property manager (based on a standard 10% management fee) and the monthly mortgage payment ($700 based on 20% down and 6% interest on a $150K investment property), and the cash flow is reduced to the point of, "why bother?" Clearing $200-250 per month is not going to cover many big-ticket repairs. Roofing issues, snow removal, tree trimming, and any minor repairs for the HVAC, refrigerator, garage-door opener, garbage disposal, dishwasher and the rest means you very reasonably could lose money for the year. Since property appreciation is virtually nil in this area, what's the point? Ten years later, the tenants will have paid down your mortgage balance some, but the price of the house will have increased in single digits. Tread carefully.

[@jozefdarragjati9367]

Cleveland Heights isn't a neighborhood you cashflow in. Also Cleveland Heights has a different Tax code than Cleveland, the taxes, water and sewer or significantly higher. You need to look into area like North Collinwood, Cudell, Linndale, Old Brooklyn. Anything is The City of Cleveland has low taxes. I recommend not putting things like dishwashers and garbage disposals in your rentals it's not matter of will it break down it's a matter of when will it breakdown. Also all my private tenants (non section 8) have to buy their own appliances because when the appliance breaks down it's not my appliance it's theirs.... Call me what you will it's just basic psychology.

[@puzzleetpuzzles7951]

@@jozefdarragjati9367 do you invest in Cleveland?

[@jozefdarragjati9367]

@@puzzleetpuzzles7951 Yes Inner city only. I don't touch the heights. Euclid and Lakewood are my only exceptions

[@Koneplayzz]

Where is your favorite place in Cleveland for cash flow?

[@LivinginDurangoColorado]

Thank you!!

[@salvadorpuente8716]

Dave should mention that the year on year price appreciation percentages should be considered an anomaly just like the RTP ratios in 2010-2012. Covid had a huge positive impact on these markets and it's still too early to tell what the fallout might be.

[@healthyaisletoasia]

Would you be so kind as to create a list for Canada?

[@dompellegrini5520]

Love all of your videos. Thank you

[@almostastar2]

In your data for best housing markets it would also be excellent to include vacancy rates and average turnover, as well as a landlord friendly scale. I know too many people who’ve been burned in places like Michigan and Pennsylvania over the last two years with bad tenants who could not be evicted because of state law!

[@ednasalinas5568]

great point.

[@willlemmond1909]

Yep. Philly is not a good place for rentals if you like autonomy. I cut my teeth for 10 years in that market and got the f out. Riots, insurance skyrocketing, crime, and moratoriums

[@Adrian-yi8fl]

Yep. Market rents don't mean much if it's vacant

[@eddieparker4529]

I began investing in Real estates and I’ve made enough profits in a year to buy rental units and parking lots, and I’m still investing in REITs and my real estate properties which bring in approximately $600k annually

[@eddieparker4529]

I’ve been investing in the real estates market 5yrs now. I just bought another property in November, it wasn’t affordable, however it is a perfect investment. It’s quite fascinating how an RA’ can also guide you to lucrative investments in the real estates markets, I put about $170k in February and this far I’ve gotten over 700% of what I put in, now I’m moving profits from stock investment to my real estate portfolio….

[@eddieparker4529]

I used to think stocks was the most profitable, but my perception totally changed when I got in contact with an experienced property manager Jack Ronald Joyce’ whom assisted me with a platform that helped set up real estates investments for me, I’m now able to x4 what I initially invested, would I have ever thought real estates can turn out this lucrative and life changing

[@Couchlnvestor]

Indeed the real estates market is a money faucet, Having just paid off my mortgage and in the process have a floating money pot of $65,000, How can I achieve the same?

[@VanillaCherryBread]

@@eddieparker4529 Astounding! This makes sense, But question ought to be how can you trust him?

[@eddieparker4529]

It wasn’t quite easy at the onset but then again nothing beats experience and moreover the platform he manages my investments on are duly licensed, and he has been consistent for years now. Good man👍🏻

[@wilsonrealty1]

Disclaimer: The term “passive” for rental property is used vary loosely.

[@mordykatsevman8161]

Another amazing video! Thank you so much. Could we have a similar video about top ten flipping markets?

[@limitbreakersb3578]

VERY VERY HELPFUL, AND THANK YOU

[@firerealtyteam-reimetrodet9898]

Great video. We LOVE Metro Detroit. Best price/rent ratio in the country. For note, we find the best balance is in slightly better location coming in more around the 1.2-1.4% rule rather than chasing the 2% rule in D markets. Those 2-3% deals in rough areas is what gives Detroit a bad reputation. But buy the 1.3% rule deal in a B market and enjoy a nice location with solid cash flow and growth for a long time.

[@josephhammel7186]

My entire portfolio is in the Metro Detroit area and it cash flows VERY well and I’ve almost doubled my equity in the past couple years through some sweat equity and appreciation. As long as you buy in the better up and coming, working class markets the management is no different than anywhere else and for the most part all tenants pay on time and very little issues.

[@firerealtyteam-reimetrodet9898]

@@josephhammel7186 exactly. Those are the markets we focus in and they perform very well for clients and ourselves. Actually find it hard to believe the rest Of the country is struggling with finding “good deals” and we find them everywhere. Buy: $80-$130k Rent: $1200-$1500 Cash flow: $250-$400 ROI: 10-15% Appreciation: 5-20% (last 10 years) Location: B-, C+ It’s amazing.

[@Pinnacle17]

@@firerealtyteam-reimetrodet9898 That's awesome. Would you ever partner on a deal?

[@firerealtyteam-reimetrodet9898]

@@Pinnacle17 yeah we have agents on the team willing to partner as well, for the clients who don’t necessarily want to venture on their own.

[@LuG8911]

What neighborhoods are these?

[@phil1954]

Macon Georgia is similar to Shreveport in the fact that appreciation is extremely low. If you buy a house today, it will be worth the same thing 10 years from now.

[@adrianwooten6848]

Augusta is better in my opinion.

[@stefanimokris9399]

I LOVED this video! I am part of a small group of investors who are eager to work together. I like the price point on those areas and I think it's worth look into it. Where my husband and I buy a SFH is near 400K, a two family close to 800K. Next group monthly meet up I will propose to talk about how can we buy together a property in one of those areas and learn how to work as a team. Thank you for delivering value content as usual!

[@erickpezoa883]

Did you guys evaluate the market in Harrisburg, PA?

[@januszchudzynski8494]

My favorite videos from BiggerPockets. Short and straight to the point

[@edgarg6559]

I agree! I don’t always have the time for an hour long podcast so these short ones are gold!

[@marshallgerston4809]

Great video and right to the point. I for one appreciate the fact that you're not wearing a "wife beater" or tank top, with your hat backwards, and cheap mirrored sunglasses while annoyingly walking down a street filming yourself. But I do have a question that's bugged me for a while. I'll use fake round numbers. If you buy a house for $100,000 and you rent it for $1000/month - boom 1% rule. So the house increases over time to $200,000 and you rent it for $1500/month. Is that now a 1.5% rule house or .75%? Thanks again for the videos!

[@shawnhalvorson4000]

I was taught it goes off current value, not original value. So .75%

[@stefanimokris9399]

Great point! Not only Bigger Pockets have good content, but they also have a good set up for their recordings. Professional, but not too serious. I also appreciate that!

[@wyattsage4582]

No wonder Jaspreet is doing so well with real estate. Location, Location, Location

[@LanguageLearned]

Really looking into Ohio and Michigan

[@patrickmoore4712]

I am pretty sure these lists completely leave out tax implications. Milwaukee and Orland park have bad taxes and there is no way the pencil out that well if that is considered.

[@lawrencebriggs]

I love investing for Cash Flow. After residing in Austin, TX for a few years. I moved about 45 minutes away from the area to purchase rental properties because of a cash flow market.

[@charlesholder4150]

Where?

[@lawrencebriggs]

Near Fort Hood. I’m documenting my journey on KZbin! 😊

[@workplan01]

Could someone explain what RTP is and why its so important when doing market evaluations ?

[@aaronrosenberg1416]

Rent to price ratio. One month's rent divided by sales price. It's useful because it gives you a quick idea of whether a property can cash flow or not. However, taxes, insurance and maintenance vary by market so RTP does not give you the entire answer

[@johnpdd]

How did Gary Indiana not make this list? It should have been in the top 3.

[@ChrisClark_808]

Agreed!!

[@stevend481]

Why? Isnt it known to be abandoned

[@thomgilbert1546]

Shhhhhh, let it stay off the lists….

[@ChrisClark_808]

@@thomgilbert1546 lol. Right!

[@johnpdd]

@@stevend481 it's known for lots of things, half of them aren't true.

[@kenshapiro9401]

This video was really valuable to me. I want to download the data drop that the host talked about. I looked on bigger pockets, but didn't see it. Can anybody help me by telling me how to find this data drop? Thank you for the excellent video!

[@biggerpockets]

You can access the data Dave mentions here! : www.biggerpockets.com/files/user/kailynb1/file/2022-cashflow-markets?

[@kenshapiro9401]

@@biggerpockets Thank You!

[@KevinBriggins]

Really surprised Birmingham isn't top 10. You can definitely still get the 1% rule there.

[@David-iy6gh]

I remember they were saying they thought there would not be a market crash and that seems where we are heading

[@TheLiftOff]

Wouldn’t touch Shreveport with a 10ft pole

[@ankitvora7]

Have you accounted for the real estate taxes in your calculation ? E.g. Detroit has one of the highest property tax rates in the country. With a millage of around 88 for an investment home, a property of $200,000 would incur a tax bill of about ~$17k. Even if the tax assessed value is 50% of the actual home value, the bill will still be around $8.5k which is about $700/month. That would affect the numbers tremendously.

[@Khanfuzed1]

I have not been seeing rates that high

[@nellosnook4454]

1. Please discuss options & strategies to cope with these ever-increasing interest rates. 2. Especially when refinancing BRRRRs. 3. I am seriously considering a 5/1 ARM for my current rental real estate project. 4. I’m in west Washington state. 5. A decidedly Blue state. 6. Approximately 60 miles north of Seattle. 7. My first BRRRR here last year went very well. 8. Optimal appreciation & rent revenue. 9. Currently, I’m half-way through my next BRRRR in the exact same area. 10. I expect the same results, in terms of appreciation & rent revenue. 11. HOWEVER, when refinancing, these current high interest rates are a direct negative pressure on cash-flow. 12. Despite current economic conditions, I am VERY bullish on America within the next 5 years. 13. As such, I am inclined to opt for a 5/1 ARM for my next rental SFH refinance. 14. When interest rates drop at least 2 percentage points, I will refinance to a fixed rate. 15. I solicit advice on this strategy.

[@kyang162]

Decidedly blue state post. Very organized and constructive.

[@firerealtyteam-reimetrodet9898]

In the current market* I think a 5/1 are could be potentially be the right call for you. Especially when going into a sweat equity deal in a market your confident will continue to grow in value..regardless if rates are higher or lower..you SHOULD refinance roughly ever 5 years anyways to pull out your equity and compound your wealth. With what you’ve listed for context..casting a vote of validation to take the 5/1 arm and refinance in 5 years. With this strategy, pay as little points as possible. Your always trying to keep as much cash in pocket and as little cash in the deal as possible to maximize roi.

[@oscarrlee18]

You take too long to get to your points and your intro is way too long

[@georgeryanjr.776]

Painfully slow getting to his point. He must like to hear himself talk.

[@starshockey11]

Here’s a great start to find the cash flow- Is it a red or blue state/ region? Not always the case but overwhelmingly is the case. Avoid the blue states/ regions like the plaque. Even the positive cash flow areas still standing will eventually turn to the low hanging fruit of regulation and take it from you.

[@uscg1381]

True story. I'm in a blue state and it's a nightmare here. And not just the housing market. The culture here is laziness. Contractors are criminal and the laws protect them. Punctuality is not even a word here. Don't do it.

[@nellosnook4454]

1. I’m in west Washington state. 2. A decidedly Blue state. 3. Approximately 60 miles north of Seattle. 2. My first BRRRR here last year went very well. 3. Optimal appreciation & rent revenue. 4. Currently, I’m half-way through my next BRRRR in the exact same area. 5. I expect the same results, in terms of appreciation & rent revenue. 6. HOWEVER, when refinancing, these current high interest rates are a direct negative pressure on cash-flow. 7. Despite current economic conditions, I am VERY bullish on America within the next 5 years. 8. As such, I am inclined to opt for a 5/1 ARM for my next rental SFH refinance. 8. When interest rates drop at least 2 percentage points, I will refinance to a fixed rate. 9. I solicit advice on this strategy.

[@starshockey11]

@@uscg1381 yep! Last year sold all of our properties in Colorado after coming to the same realization- Operating costs are chewed up simply due to the culture in these areas. Very much a “you owe me” type scenario. Not too mention regulation and appetite to ruin the small business owner and mid sized investor (without realizing we are simply replaced by a massive investor who really doesn’t care about them and will pay them less 😂). Have bought over 2.0 mil worth of property in Georgia and cannot say enough great things. The contractors across the board are incredible. Same for renters. Highly recommend considering Georgia as a place to invest!

[@starshockey11]

@@nellosnook4454 certianly always outliers to the principle. Butttt 60 miles north of Seattle - doesn’t it start to get pretty conservative in the more remote parts of Washington? That’s why I mentioned “regions” not just states. My brother owns in upstate New York. Super blue state but the region of the Adirondacks is super conservative. He has great customer and contractor experience

[@tz1731]

@@starshockey11 Thanks for your insight regarding Georgia. I live in South Florida; however, I would love to make an investment in Georgia. Any additional information would be greatly appreciated. Thank you.

[@mattpergolski4759]

The data set is🗑lol; "Disclaimer: Safety of files uploaded to the BiggerPockets FilePlace cannot be guaranteed. Download at your own risk." What a joke lol

[@kyang162]

So, you want free data and the ability to sue them?