I’ve done a little leg work on this, and initially thought that Texas was going to be good, but the rental market relies too much on the potential buyer pool, and I was looking for a more traditional renters market, with a steady source of renters, and a market less volatile that in soCal. Boston has some lovely buildings, many appear to built as multi-family units, and a reliable source of renters. Buildings are cheaper to buy, rents high, so cap rates are tempting, but it is very seasonal. The downtown apartments and condos, some of which are beautiful, are more expensive and offer smaller returns. Philadelphia is another possible candidate. New York probably has lots to offer, but it’s just too big unless you already know it well. I’ve found that the best judge of current cap rates is listed properties with leases still in place. Redfin seems to provide more of these financial details than some MLS listings I’ve been receiving.
A company called Marcus and Millichap provide free reports. You just have to register http://www.marcusmillichap.com/Services/Research/ They give a brief but useful breakdown of cities’ rental markets.
