Boston is the best at so many things… But when it comes to getting a big fat monthly cash flow return on an investment property… Not so much! Realtor.com did analysis and a ranking of the top Markets for Investors and the results were extremely surprising. 

The Realtor.com article mentions that investor markets each offer investors a unique combination of advantages, but in general, these are affordable markets that see considerable buyer demand and low rental vacancy rates.
Take a guess at what the top market for investors is in the country?
Was Dayton, Ohio on your list? If so then you are a genius. If not, then I can’t blame you. I am not too embarrassed to say that I had to look up where Dayton Ohio was. It is located about an hour from both Columbus and Cincinnati.
Dayton is a mid sized city in Southwestern Ohio that sports a low median home price of $239,000.
The rental vacancy rate in Dayton was just 4.7% in the first two quarters of 2024 which is lower than the national average of 6.6%. And because of these favorable market conditions, investors makeup 13.7% of buyers in the first quarter of 2024 in Dayton.
The top 10 markets for investors are Dayton, Ohio, Rochester, New York in the number two slot, then Cleveland Ohio and Pittsburgh, Pennsylvania in the third and fourth positions. Followed by Knoxville Tennessee, Albany New York and New Haven Connecticut in the fifth, sixth and seventh spots.
New Haven Connecticut. That one surprised me! To finish out the rankings we had Buffalo New York in spot 8 and Grand Rapids, Michigan and Columbus Ohio in the ninth and tenth places.
So what is next for Dayton? Prices are going to rise. It will most likely fall off its top spot. With its combination of affordable housing, increasing demand and low vacancy rates.
Mike Wall, owner of EZ Sell Homebuyers, a We Buy Houses Dayton OH company has been seeing home prices go up steadily as more and more people look to buy. He specializes in working with people who need to sell my home fast as he is a property flipper who buys homes that are in need of repairs.
An issue that Dayton is beginning to see is that big investors are quickly buying up homes. This isn’t just making asset prices rise, but also increasing rental prices in the area as well.
Investors will talk in the term of Cap Rates when analyzing different real estate opportunities. So what is a Cap Rate? The Capitalization rate, or cap rate is a metric used in real estate to estimate the potential return on an investment property. It’s calculated by dividing the property’s annual net operating income by its current market value or purchase price.
Generally speaking a property with a higher cap rate will carry a better return, but that better return comes at the cost of higher risk. In other words an area like Dayton Ohio would have a much higher cap rate then an investment in Boston. The Dayton, Ohio investment will offer investors a much higher cash flow return, but will be a more risky investment in that investors portfolio.
When it comes to investments, it’s important to remember that there is no right or wrong return. It’s just the return and the investment objectives that you are trying to achieve. An older more risk averse investor would most likely look for an investment in an area like Boston that offers a very stable return. An investor who is willing to take on a more risky investment in return for a higher operating return would be looking in areas like Dayton.
To put this in a local perspective. The Back Bay neighborhood will carry a lower cap rate than an investment in Roxbury. The Roxbury investment will provide the investor with a higher operating return.
Do not hesitate reaching out should you have any questions or are thinking about investing in the Massachusetts market or really any market throughout the country. Let’s talk about your objectives and come up with a strategy in order to achieve those objectives.

#investor #market #isnt #Massachusetts..
Jeffrey Chubb
2024-10-25 12:26:00 https://bostonrealestateinvestorsassociation.com/the-best-investor-market-isnt-massachusetts/