Investment Property: Top Cities Nationwide for Cap Rate & Cash Flow
As big believers in quantitative data, InvestorLoft consistently tracks the numbers behind our site’s listings. We want our members to have access to the most timely data possible to help with their investment property purchase decisions, so we’ll be publishing quarterly results like those in this blog. Forbes.com and Forbes Magazine recently utilized our data in their article The Landlord Game, and we’re now passing on an enhanced version of that data to you! The following numbers were derived by analyzing all of the listings on InvestorLoft and then crunching those numbers a few different ways and under different scenarios (varying down payment amounts, types of residence, etc.).
Note on Cap Rate calculations:
The following is the method by which our cap rate calculations have been derived:CR = ((income – expNotMtg)/PP)*100)
Cap Rate = ((income less expenses not including mortgage)/Purchase Price)*100All results were multiplied by 90% to account for the following variances and arrive at more conservative figures:
Rent:
- Seller entered rent as the first value. If there is none, then we used median rent derived from between 1-5 miles averages.
Expenses:
- Some listings do not have HOA or taxes – the system does not currently estimate these numbers, so the cap rate would be very high in that case. Thus, we estimate numbers for insurance fees, and property management (based on the rent val) in the expenses.
Top Cities Nationwide for Cap Rate – National Totals
(includes both single-family and condo/town homes – multifamily excluded)
Top Cities Nationwide for Cap Rate – Single Family
Top Cities Nationwide for Cap Rate – Condo/Town home
Top Cities Nationwide for Cash Flow – National Totals
(sorted assuming 30% down payment)
Top Cities Nationwide for Cash Flow - Single Family
(sorted assuming 30% down payment)
Top Cities Nationwide for Cash Flow - Condo/Town home
(sorted assuming 30% down payment)
Share this post with your clients and colleagues and look for our Q3 data to be released in October.
Tags: Investment Property, Real Estate Investment, Rental Property
Real Estate Investment listing RSS feed
July 23rd, 2009 at 3:21 pm
I just want to say how much I enjoy this information.
July 23rd, 2009 at 8:56 pm
Really good info you’ve got there. Appreciate it very much.
July 24th, 2009 at 10:58 am
Cap rate for residential properties??
July 24th, 2009 at 11:35 am
@Greg Yes, as the information in the blog lead-in states:
The following numbers were derived by analyzing all of the listings on InvestorLoft and then crunching those numbers a few different ways and under different scenarios (varying down payment amounts, types of residence, etc.).
InvestorLoft only lists residential properties, so yes – the figures above apply to residential ONLY. Great question, though! Thanks for stopping by!
July 24th, 2009 at 1:40 pm
It seems you might want to expand onthe cashflow figures. Overall cashflow leader Miami trounces number 20 St Louis until you look at the price per property. With Miami’s average price nearly double St Louis the figures even out when “apples to apples”. What’s odd is that when prices of homes are “evened up” the cashflow rating should match Cap Rate but they don’t. St Louis trails Miami in cashflow even when multiplying the numbers by the 88% or so Miami beats it in price yet the CR chart shows St Louis ahead. Perhaps loans are cheaper in Miami? It’s the only thing that comes to mind. Maybe I’m missing something?
August 8th, 2009 at 7:49 pm
Excellent data – good job.
Does any one think it is better to use ROI (and not cap rate) in residential real estate?