8 Most Affordable Cities for Real Estate Investors
Bigger Pockets recently wrote an article on the eight most affordable cities for real estate investors.
The markets according to BP writer Dave Meyer are:
Meyer’s picks had to meet his definition of affordable and pass some basic test of “investability.”
The city has to have a median home price lower than the median home price for the U.S. as a whole (which is around $400,000 as of this writing).
The city had to be large enough to have good economic prospects and reliable data. I drew from a pool of the 100 largest metros in the U.S.
The city has to have grown in population from 2021 to 2022, according to the U.S. Census. While there are many macroeconomic variables you want to look at when selecting a market, population growth is perhaps the most important. Hint: a lot of them are in Florida.
The city has to have a rent-to-price ratio (RTP) above .6%. RTP is a good proxy for cash flow, and although you’ll likely want to find a deal with an RTP of .75% or higher, if a city averages .6%, it usually means you can find solidly cash flowing deals. When I was doing this analysis, I found that all of the cities with higher RTPs than those on my list had declining populations.
Cross check these with markets that have a high pool of Gen Z Buyers (potential for appreciation?), Top 10 metros homebuyers are going to, and the best states to retire and our favorite picks for affordable real estate investing are Oklahoma City, Jacksonville, Orlando, and Tampa.
Looking for an agent to help with an investment purchase? Head to our Buyers survey.