Cash Flow Markets With a Median Price Under $200,000
This list is built from the monthly snapshot of the ten cities we track, so it changes when prices do. A city drops off when its median crosses $200,000. The median comes from one investor neighborhood in each metro, which is lower than a citywide average in most of them.
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| Market | Median price | Median rent | Rent / price | Est. cap rate |
|---|---|---|---|---|
| Detroit, MI | $99,999 | $1,250/mo | 1.25% | 10.9% |
| Memphis, TN | $89,900 | $1,095/mo | 1.22% | 10.5% |
| Birmingham, AL | $92,900 | $1,075/mo | 1.16% | 9.9% |
| Kansas City, MO | $115,000 | $1,279/mo | 1.11% | 9.5% |
| Cleveland, OH | $124,900 | $1,299/mo | 1.04% | 8.8% |
| Pittsburgh, PA | $139,900 | $1,285/mo | 0.92% | 7.6% |
| Indianapolis, IN | $135,000 | $1,125/mo | 0.83% | 6.8% |
| Columbus, OH | $150,000 | $1,200/mo | 0.80% | 6.4% |
| Cincinnati, OH | $169,900 | $1,150/mo | 0.68% | 5.2% |
| St. Louis, MO | $159,900 | $950/mo | 0.59% | 4.4% |
Estimated cap rate uses the calculator’s default costs, including a flat 1.1% property tax rate for every city. Local rates differ, so a high-tax city like Detroit has a lower real cap rate than shown, and a low-tax one like Birmingham has a higher one.
Why a price cap matters
A smaller purchase price means a smaller down payment, which is how most first-time investors get started. It also means less to lose if a repair runs over. Rent doesn’t scale down with price, so lower-priced houses tend to show higher rent-to-price ratios. That ratio is the first thing to look at, and the 1% rule is the quick version of the same test. The cap rate column goes one step further and subtracts typical operating costs.
What cheap markets cost you
The lowest-priced cities tend to have the highest rent-to-price ratios, and they tend to have older houses, higher turnover and more repair surprises. A $90,000 house with a $25,000 roof and furnace costs $115,000. Get an inspection and run the full numbers in the deal calculator before you decide a market works.
If you’re buying from outside the US, the state guide for Canadian investors covers the state taxes and landlord rules that sit on top of these price numbers.