NuWire Investor, an online financial news publication, recently released its rankings of the Top 10 Cash Flow Markets for 2008.
Appreciation is often the most significant form of profit for real estate investors, but it is harder to determine and higher in risk. Cash flow alone, rather than any potential for future appreciation, was used in ranking this list.
Rankings were determined based on an adjusted average rent payment for the area according to the rental vacancy rate. This value was compared to the amount spent monthly on mortgage payments and upkeep, including utilities, taxes and insurance. Mortgage payments were estimated based on an average loan and the median cost of a home in the area. Statistics were gathered from U.S. Census data.
Despite a slight population decline in the last few years, Rochester, N.Y., ranked number one because of its affordable housing prices, and low monthly upkeep and mortgage costs. Several Southern cities also made the list, including three from Texas. Texas also has an affordable housing market and many foreclosure opportunities for investors, particularly in San Antonio.
The Top 10 Cash Flow Markets are:
1. Rochester, New York
2. Montgomery, Alabama
3. Birmingham, Alabama
4. San Antonio, Texas
5. Garland, Texas
6. Buffalo, New York
7. Corpus Christi, Texas
8. Shreveport, Louisiana
9. Detroit, Michigan
10. Philadelphia, Pennsylvania