We Ranked Every NFL Team’s Real Estate Market and Found the Best Cash Flow Opportunities

Key Takeaways:

– The article discusses the relationship between NFL markets and real estate investment.
– The author uses rent-to-price ratio (RTP) to measure cash flow potential in each market.
– Cleveland has the highest RTP, indicating strong cash flow potential, while San Francisco has the lowest RTP.
– The author also looks at median sales prices in each market, with San Francisco having the highest price and Cleveland having the lowest.
– The author highlights Buffalo and Cleveland as markets with great investment opportunities, citing factors such as affordability, strong economies, and passionate fanbases.
– The article concludes by emphasizing that the choice of where to invest ultimately depends on individual preferences and strategies.

BiggerPockets:

It’s that time of year when you’re either super happy that your team made it to the big game, or you’re frustrated with your team’s performance throughout the season (such as my Panthers) or still recovering from a playoff blowout (I’m talking to you, Cowboy fans). Or you could be an Eagles fan and question your existence after what’s happened over the last 365 days (much to my delight).

At any rate, life goes on, and only one team can win the big game. What we do have more control over, though, is where we place our money in real estate.

Here, BiggerPockets looks at every NFL real estate market, ranking them on a variety of metrics, starting with cash flow potential and ending with my personal take on which markets have the best long-term prospects. 

I’ll start by noting a few exceptions. First, the Rams and the Chargers are both in Los Angeles, and the Jets and the Giants both play in New Jersey. I used NYC metro data, which includes Newark and Jersey City. I, too, believe that the New York Giants should be the New Jersey Giants. 

In addition, many teams, beyond the Jets and Giants, don’t actually play in the city they’re named for. The 49ers, for example, play in Santa Clara, which is more San Jose than it is San Francisco. The Cowboys play in Arlington, the Commanders play in Landover, and so on.

To make things easier and consistent, I used metro data from the city that the team represents in their name. So, for the 49ers, I’m using San Francisco-Oakland data, not San Jose. 

With that cleared up, let’s look at the numbers.

NFL Markets With the Best Cash Flow Potential

To measure cash flow potential, we calculate the rent-to-price ratio (RTP). This is done by dividing the rent price of a market by its median sales price. Ideally, RTPs closer to 1% indicate strong cash flow potential, while values below 0.65% start to get a little iffy.

RTP has fallen in recent years due to rising prices in both the rental market and the sales market, on top of higher interest rates. What that really means is that cash flow is not nearly as easy to come by as it was a decade ago. However, that doesn’t mean it’s impossible to find; every market has somewhere with cash flow potential; you just need to find it. 

Below is the list of all NFL markets sorted by their RTP.

Cleveland leads the list, with a pretty solid RTP of 0.72%. Bottoming out the list is none other than San Francisco, with a paltry RTP of 0.27%. Once again, that’s not to say that San Fran doesn’t have cash flow potential in any part, but you’ll be stretched to find it. Try Oakland, though.

NFL Markets With the Best Prices

A good home price is subjective, but ideally, we’re looking for a place with an “affordable” median sales price with strong long-term growth prospects.

Above, you can see all of the markets sorted by their median sales price. Unsurprisingly, San Francisco tops the list with an extraordinarily high price tag of over $1.1 million. The lowest on the list is Cleveland at $185,000, which explains why it has the highest RTP of all markets.

You’ll also notice that Green Bay has the lowest rent price at $1,000, while the highest in New York at $3,100. A takeaway from this data is that there’s a strong correlation between home prices and rent prices up to $2,000 in rent and $400,000 in sales price. Then, after that, the numbers are scattered, with New York being markedly cheaper in home prices compared to that of San Francisco but having higher rent prices.

It further proves the point that real estate is local, but it also gives you a sense of what to expect at certain price points. I’m sure if we expanded this dataset to include more markets, we’d see a similar trendline.

What Markets I Think Are Poised to Do Well

Most of the markets on this list have plenty of investment opportunities and would be perfectly fine to invest in. However, the big standouts to me are Buffalo and Cleveland.

Cleveland’s high RTP and affordability are major draws, especially since it’s an established city in a region of the country that’s starting to see a little bit of revitalization. Many people begin moving there from the more expensive parts of the country, and Ohio as a state is relatively low risk in regards to weather and insurance costs. Plus, since we’re talking about football, I’d be lazy not to mention that Cleveland has a great sports scene, with not just the Browns but the Cavaliers and Guardians.

Buffalo, on the other hand, actually just topped the list for Zillow’s hottest markets of 2024. Why? It’s got a great economy, affordable prices, a very passionate Bills fanbase, and lots of great investment opportunities. It’s been growing for the last few years, both in terms of population and economics, and it looks like things will continue to move in that direction.

Overall, where you invest comes down to your individual preferences and strategies. Long-term holds would do well in most of the markets, but short-term rentals can work in markets like Tampa just as well. 

Enjoy the game!

Take Your Market Research to the Next Level

Need help finding the right market for your next investment? Dave Meyer created our brand new Picking a Market Worksheet to help investors like you identify and analyze the right locations for their next deals.

Download our worksheet today for quick and easy analysis when researching your next market. 

picking a market worksheet

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

Source link

Property Chomp’s Take:

It’s that time of year when football fans are either overjoyed that their team made it to the big game or frustrated with their team’s performance throughout the season. As we reflect on the ups and downs of the NFL season, it’s also a good time to consider our investments in real estate.

BiggerPockets, a popular real estate platform, recently analyzed every NFL market based on various metrics, ranging from cash flow potential to long-term prospects. The rankings provide insights into which markets offer the best opportunities for real estate investment.

Before diving into the rankings, it’s important to note a few exceptions. Some teams, like the Rams and the Chargers, are located in Los Angeles, while others, like the Jets and the Giants, play in New Jersey. To maintain consistency, BiggerPockets used metro data from the city that the team represents in their name.

When it comes to cash flow potential, BiggerPockets calculated the rent-to-price ratio (RTP) for each market. This ratio is obtained by dividing the rent price by the median sales price. A higher RTP indicates stronger cash flow potential, while values below 0.65% suggest a less favorable outlook. It’s worth noting that rising prices in both the rental and sales markets, along with higher interest rates, have made cash flow harder to come by compared to a decade ago.

Cleveland leads the list with a solid RTP of 0.72%, indicating good cash flow potential. On the other end of the spectrum is San Francisco, with a paltry RTP of 0.27%. While San Francisco may still have pockets of cash flow potential, it’s more challenging to find compared to other markets. Oakland, however, may offer better opportunities in the San Francisco-Oakland metro area.

Next, BiggerPockets examined the markets with the best prices, considering both affordability and long-term growth prospects. Unsurprisingly, San Francisco tops the list with a median sales price of over $1.1 million. Cleveland, with a median sales price of $185,000, is at the other end of the spectrum. The correlation between home prices and rent prices is strong up to $2,000 in rent and $400,000 in sales price. Beyond that point, the numbers become more scattered.

Based on these rankings, two markets stand out as promising investment opportunities: Buffalo and Cleveland. Cleveland’s high RTP and affordability make it an attractive choice. The city is experiencing revitalization, with people moving there from more expensive parts of the country. Ohio, as a state, also poses relatively low risk in terms of weather and insurance costs. Additionally, Cleveland boasts a vibrant sports scene, with the Browns, Cavaliers, and Guardians.

Buffalo, on the other hand, recently topped Zillow’s list of hottest markets for 2024. The city offers a strong economy, affordable prices, and a passionate Bills fanbase. It has been experiencing growth in population and economics, suggesting a positive trajectory for real estate investment.

Ultimately, the choice of where to invest depends on individual preferences and strategies. Most of the markets on the list present investment opportunities, but long-term holds might fare well in many of them. Short-term rentals, on the other hand, could be successful in markets like Tampa.

As football fans gear up for the big game, it’s a good time to consider where to place our money in real estate. The NFL market rankings provide valuable insights for investors looking to make informed decisions. So, enjoy the game and take your market research to the next level with BiggerPockets’ Picking a Market Worksheet to identify and analyze the right locations for your next investment.

Leave a Reply

Your email address will not be published. Required fields are marked *