Cali Zimmerman

Cash flow is one of the most important considerations investors face when making real estate purchases, particularly now that so many markets across the country are struggling. Those seeking high-income property should take cash flow into account first and foremost when deciding whether or not to buy.

Cash flow refers to the amount of cash coming in relative to the amount going out. In ranking the top 10, potential for future appreciation was not considered; this list is ranked on cash flow alone. While appreciation is often the most significant form of profit for real estate investors, cash flow is easier to determine and lower risk.

Although many elements combine to influence cash flow, one of the most important ones is the surrounding market. Areas with lower home prices are more likely to have positive cash flow.

To determine our top 10 cash flow real estate markets, NuWire adjusted the average rent payment for the area according to the rental vacancy rate before comparing it to the amount spent monthly on mortgage payments and upkeep, including utilities, taxes and insurance. Mortgage payments were estimated based on an average loan—30 years at 80 percent loan-to-value and a rate of 6.5 percent—and the median cost of a home in the area. Statistics were gathered from U.S. Census data.

1. Rochester, New York

2. Montgomery, Alabama

3. Birmingham, Alabama

4. San Antonio, Texas

San Antonio ranked number one on our list of the Top 10 Places to Invest for 2007 and second on our list of the Top 10 Foreclosure Markets for 2007. Home to 1,273,374 people as of 2006, San Antonio retains affordable home prices, with a median of $96,300, in spite of its growing population. Median monthly upkeep is only $374 per month, with an estimated mortgage costing $486.95 per month. The rental vacancy rate for the city is 10.3 percent—on the lower side of this list—and the median gross rent is $678 per month.

http://www.nuwireinvestor.com/articles/top-10-cashflow-property-markets-51396.aspx