The Best Places to Find Cheap Houses for Real Estate Investments

We’re a few years into the housing recovery and, slow as it is, real estate prices are taking a marked upward path. While prices aren’t anywhere near their 2005 highs in most areas of the country, they’ve also climbed well above their 2009-2010 lows. That said, there are some areas of the country where real estate is still an excellent investment. These cities are marked by low prices just starting an upward trajectory, and a strong rental market. If you’re looking for real estate for investments in 2014, be sure to put these cities on your list to check out.

Orlando, Florida

Home to the best theme parks, beautiful beaches and glorious weather, Orlando was one of the hot real estate investment spots of the past housing boom. Thousand of people bought condos — often before they were even built — with the expectation of selling them at a profit within just a few short months. When the bottom fell out, many of those owners were left holding properties they couldn’t sell. Existing home prices continue to fall, but rents are holding steady. Even better, because Orlando is a tourist city, you can pretty much quadruple your expected income by renting out your property by the week during tourist season.

Wichita Falls, Texas

A nearby air force base, low home prices and high median rents make Wichita Falls a great bargain for real estate investors. While many other cities with home prices this low are attracting home buyers, the air force base provides a steady stream of service members who choose to rent rather than buy. You can find three and four bedroom homes for under $100,000, and rent them for nearly $1,000 a month.

Syracuse, New York

Syracuse may not have an air force base, but it does have the next best thing: about 20,000 college students, many of whom need rental housing during the school year. Outside the fluctuating school population, however, city population has stayed relatively stable, keeping existing home prices low. Landlords often rent 3- and 4-bedroom homes or apartments as individual rooms, multiplying their monthly income substantially.

Detroit, Michigan

For all the bad press Detroit has gotten over the past several years, it’s got a strong following with on particular group of investors: foreign Chinese buyers looking for steady income. It’s still possible to buy rental properties for less than $25,000 in Detroit, fix them up and rent them to local residents for regular monthly income. And while the media focuses heavily on the grim realities of a city in bankruptcy, those who live in Detroit are seeing a different reality — a city with a vibrant and growing art and entrepreneurial community expanding from downtown outward. As the resurgence takes hold, expect rents to start moving up the scale.

What to Look For

Interested in investing in real estate closer to home? No one knows your city better than you do. Before you decide to take the plunge consider these factors:

Home pricing —    is it low and rising? It’s a good time to buy.
Rents —  Ideally, you want your monthly rental income to cover your mortgage and provide a little profit.
Vacancy rate — a low vacancy rate in the city suggests that more housing is needed. A high vacancy rate is troubling for investors.
Special factors — are there special factors that make your city attractive to renters? Those might include colleges and tourism, both of which increase the need for rental units.

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