3 of the Most Affordable Places to Buy Cheap Rental Properties

TL;DR

Explore three affordable and investable U.S. real estate markets.

Transcript

pretty much anyone who wants to participate in the housing market either as an investor or as a homeowner is looking for affordability right now affordability is actually at a 40-year low and with housing prices shooting up over the last couple of years it's harder and harder to find but luckily there are plenty of markets throughout the us that ar... Read More

Key Insights

• Affordability in the housing market is at a 40-year low, making it challenging for investors and homeowners to find reasonably priced properties.
• Affordability does not equate to investability; a market must have strong underlying fundamentals to be considered investable.
• Affordable markets are defined as those with median home prices below $300,000, significantly less than the national average of $420,000.
• Investable markets should offer cash flow opportunities, positive price and rent growth, and have balanced housing market dynamics.
• PropStream is a valuable tool for investors to find motivated sellers, analyze deals, and locate properties in competitive markets.
• Key metrics for investability include rent-to-price ratio, days on market, population growth, and a strong local economy.
• Three recommended markets are L, Texas; Fville, North Carolina; and Oklahoma City, each offering a balance of affordability and investability.
• Oklahoma City presents a promising investment opportunity with a median home price of $238,000, strong job growth, and positive housing market indicators.

Questions & Answers

Q: What is the current state of housing affordability in the U.S.?

Housing affordability is currently at a 40-year low in the U.S., making it increasingly difficult for both investors and homeowners to find reasonably priced properties. This is due to rising housing prices over recent years, which have outpaced wage growth and other economic factors, resulting in a challenging market for those seeking affordable housing options.

Q: How does the video define an affordable market?

An affordable market, as defined in the video, is one where the median home price is below $300,000. This figure is set as a threshold because it is significantly lower than the national median home price of around $420,000, making it relatively more accessible for buyers and investors seeking cost-effective real estate opportunities.

Q: What makes a market investable according to the video?

A market is considered investable if it possesses strong underlying fundamentals, such as cash flow opportunities, positive price and rent growth, and balanced housing market dynamics. Additionally, investable markets should exhibit economic indicators like job growth, low unemployment rates, and population growth, ensuring long-term demand for real estate.

Q: What role does PropStream play in real estate investing?

PropStream is a crucial tool for real estate investors, providing a comprehensive data source to find motivated sellers, analyze deals, and locate properties in any market across the U.S. It offers various filters to search for both on and off-market properties, run comps, and use built-in marketing tools, helping investors make informed decisions in a competitive market.

Q: What are the key metrics used to evaluate investable markets?

Key metrics for evaluating investable markets include the rent-to-price ratio, which assesses cash flow potential, and days on market, which indicates housing market dynamics. Additionally, economic indicators such as job growth, unemployment rates, and population growth are crucial for determining the long-term viability and demand within a market.

Q: Why is Oklahoma City considered a promising investment market?

Oklahoma City is considered a promising investment market due to its median home price of $238,000, which is below the national average, and its strong job growth and low unemployment rate. The market also boasts a balanced housing dynamic with positive population growth and favorable days on market, indicating robust demand and economic stability.

Q: What distinguishes affordable markets from investable markets?

Affordable markets are those with lower median home prices, making them financially accessible to buyers. However, investable markets require additional criteria, such as economic growth, cash flow potential, and housing market stability. While affordability is a component, investability focuses on the market's ability to generate returns and sustain long-term demand.

Q: How can investors use the insights from the video to find real estate deals?

Investors can use the insights from the video to identify affordable and investable markets by analyzing key metrics like rent-to-price ratio, days on market, and economic indicators. Tools like PropStream can aid in finding motivated sellers and analyzing deals, while understanding market dynamics helps investors target areas with strong fundamentals for long-term investment success.

Summary & Key Takeaways

• The video discusses the challenge of finding affordable housing in the current market, highlighting that affordability is at a 40-year low. It emphasizes the distinction between affordability and investability, suggesting that investors should seek markets with strong fundamentals.

• Three U.S. markets are identified as affordable and investable: L, Texas; Fville, North Carolina; and Oklahoma City. These markets offer reasonable home prices, positive price and rent growth, and balanced housing market dynamics.

• The video provides insights into how to identify investable markets using metrics such as rent-to-price ratio, days on market, and economic indicators. Tools like PropStream are recommended for finding motivated sellers and analyzing deals.