Investors living in high-cost states such as California or New York often need to look beyond their home market for the first rental property. With almost 20,000 cities in the United States, the task can feel overwhelming. Dave Meyer and Henry Washington of BiggerPockets break the process into a repeatable framework so you end up with roughly three markets that fit both the numbers and your personal situation.
Start with a data-driven shortlist
The first step is to let the numbers do the heavy lifting. By filtering for rent-to-mortgage ratios, job growth, and population increase, a handful of cities repeatedly surface as strong cash-flow candidates. The authors’ recent list of the top 10 cash-flowing markets includes Hartford, Connecticut; Philadelphia; Milwaukee; Louisville, Kentucky; Indianapolis; Columbus, Ohio; Kansas City, Missouri; Dallas; Atlanta; and Chicago. Cash flow here means the revenue left after operating expenses, mortgage, and taxes: enough to generate positive monthly income. Starting with this list reduces the research pool from thousands to ten, a manageable number for deeper analysis.
Filter by personal logistics and strategy
Numbers alone don’t guarantee success. The next layer of filtering asks questions only you can answer. Do you have direct flights to a city, or would you need a 12-hour connection? Meyer admits he avoids markets that require long, indirect travel because he prefers quick site visits. Washington adds that existing relationships (trustworthy agents, reliable contractors, or former colleagues) provide a competitive edge. If you already know someone in Indianapolis or have spent time in Columbus, those markets jump ahead.
Travel convenience
Evaluate how easily you can reach a city. Direct flights, short drive times, and a nearby airport simplify property tours and ongoing management. For investors on the West Coast, cities like Dallas and Kansas City are often more reachable than Chattanooga or remote parts of Georgia.
Strategic alignment
Match the market to your investment style. Long-term buy-and-hold investors look for steady cash flow and stable job markets. Flippers need a supply of quickly renovatable homes and a robust resale demand. Short-term rental operators should verify tourism trends and local regulations. Meyer stresses that the city must support the specific asset class you plan to acquire; otherwise, even a high cash-flow market can feel like a mismatch.
Validate on the ground
Once you have narrowed the list to three candidates, it’s time for a reality check. Meyer recommends buying a plane ticket and spending a few days in each market. During the visit, prioritize three activities: meet potential team members (agents, property managers, local investors), walk the neighborhoods you intend to buy in, and review a handful of listings in person. Seeing a duplex on a Milwaukee street or a single-family home in Louisville helps you gauge the age of the housing stock, typical repair costs, and tenant demand: details that online data can’t fully capture.
Both hosts suggest attending a local investor meetup while you’re there. These gatherings reveal who the “insiders” are, what projects are in the pipeline, and whether the community is vibrant. Washington notes that a city’s vibe (its culture, amenities, and resident satisfaction) affects both tenant turnover and your own willingness to stay engaged. Meyer adds that a positive vibe often translates into smoother interactions with local agents, who are more likely to prioritize serious buyers who have taken the time to visit.
After completing the on-site research, compare the three markets against the same checklist: travel ease, existing connections, strategic fit, housing stock condition, and overall vibe. The market that checks the most boxes becomes your launch pad. By following this systematic approach, you move from a vague list of 10-plus cities to a concrete trio of cash-flowing opportunities, ready for the next step of acquisition.
