The best U.S. cities to invest in a rental property

This episode looks at a recent article (linked below) in the Stessa blog that rates the top 15 US markets to invest in rental property based on a series of metrics. We give our thoughts on the metrics chosen in the study, how relevant we think they are, and note some other market attributes we like to consider when evaluating a market to invest in.   Blog post: https://www.stessa.com/blog/best-cities-to-invest-in-rental-property/  --- Transcripts Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Emil: Hey everyone, welcome back for another episode of The Remote Real Estate Investor. My name is Emil Shour, and I am joined by   Tom: Tom Schneider   Michael: And Michael Albaum.   Emil: And in today's episode, we're going to be talking about a blog posts that was recently published on the Stessa blog titled The best US cities to invest in a rental property. So let's dive into this episode   Alright guys, so we recently published an article on the Stessa blog called The Best US Cities to Invest in a Rental Property. So this is looking at data from 2020 to 2021. And the idea behind it is to help people see which markets have performed the best, obviously not an indicator of which will perform the best in the future but always interesting to look at. And it details 15 Small metros, 15, midsize metros and then the 15 large metros that real estate investors should take note of and so this is a cool article, I want to go through it with you guys get your feedback. Do you agree with the way that the list was come up with how would you look at it as actual rental property investors? So you guys ready?   Michael: Yeah, let's do it.   Emil: I'm going to read from the article and we're going to link to this article in the show notes. So anyone who wants to go check it out and read it in detail can do so. So it says to identify the best locations for buying a rental property, our researchers created a composite index based on five key factors real estate investors consider when evaluating a market. These factors include the gross rent multiplier, recent and forecasts at home price growth, effective property tax rates, and population growth. Data Sources include the US Census Bureau, Zillow and the Department of Housing and Urban Development to improve relevance only locations with at least 100,000 residents and available data from all sources were including the analysis.   So that's all the boring stuff to get out of the way. But so those key factors, right, so So this team of researchers, they create a composite index based on gross rent multiplier recent and forecasts at home price growth, property tax population growth, without diving into like, the actual list yet. What do you guys think? Are those are those factors that you care about as real estate investor A? And B, what do you think is potentially missing from that score? If you were to try to rank a list?   Michael: Yeah, I'm gonna go first, because Tom always leaves me with the scraps!   Tom: My mouth was open, when you sort of hit the button, you hit the buzzer first, go ahead.   Michael: So one metric that I see a lot like gross rent multiplier grm, it's just not a metric that I find very useful. So for anybody listening, gross GRM gross rent multiplier is basically a measure of the gross annual rent as compared to the property purchase price. And so it's just a number, it's a ratio. And usually, it's a decimal, because unless your property is renting for like a crap ton on an annual basis, you're going to be renting it for less than you bought it for. So