Best Cities for Cash Flow Rental Properties in 2026

Cash flow is king in [rental property investing](/blog/best-cities-for-rental-income-2026). You want markets where rent significantly exceeds mortgage payments, taxes, and expenses—leaving you with monthly profit from day one.

The [best cash flow cities](/blog/best-cities-for-cash-flow-2026) have affordable property prices, strong rental demand, and rent-to-price ratios above 0.8%. Here are the 15 best cities for cash flow rental properties in 2026.

What Makes a City Great for Cash Flow?

1. Rent-to-Price Ratio (1% Rule)

Monthly rent ÷ purchase price. Higher is better.

Example:

• Rent: $1,500/month
• Price: $180,000
• Ratio: 0.83% (good cash flow)

Benchmarks:

• 1.0%+ = Excellent
• 0.8-1.0% = Good
• 0.6-0.8% = Moderate
• <0.6% = Poor

2. Cap Rate ([Net Operating Income](/blog/net-operating-income-guide) ÷ Property Value)

Measures annual return before financing.

Example:

• NOI: $12,000/year
• Property value: $200,000
• Cap rate: 6.0%

Benchmarks:

• 8%+ = Excellent
• 6-8% = Good
• 4-6% = Moderate
• <4% = Poor

3. Cash-on-Cash Return

Annual cash flow ÷ total cash invested (down payment + closing costs).

Example:

• Annual cash flow: $6,000
• Cash invested: $50,000
• CoC return: 12%

Benchmarks:

• 12%+ = Excellent
• 8-12% = Good
• 5-8% = Moderate
• <5% = Weak

4. Job Growth & Rental Demand

Stable employment = stable tenants = consistent rent.

5. Landlord-Friendly Laws

Fast evictions and reasonable tenant protections.

Top 15 Cities for Cash Flow Rental Properties

1. Memphis, Tennessee

Best overall cash flow city

Memphis consistently delivers the highest cash-on-cash returns in the country. Properties are cheap, rents are solid, and demand is stable.

• Median home price: $185,000
• Average rent (SFH): $1,650/month
• Rent-to-price ratio: 0.89%
• Cap rate: 7.5-9.0%
• Cash-on-Cash return: 10-15%
• Property tax rate: 1.05%
• Eviction timeline: 4-6 weeks
• Job growth: +1.9% (logistics, healthcare)
• Best neighborhoods: Cordova, Germantown, Bartlett, Collierville

Why it's #1: Memphis offers the best combination of low prices and decent rents. Experienced investors can find deals with 1.0%+ rent-to-price ratios. Property management is essential here.

2. Birmingham, Alabama

[Lowest property taxes](/blog/property-tax-by-state) in the nation

Birmingham has dirt-cheap property taxes (0.41%) and affordable homes, making cash flow easy.

• Median home price: $190,000
• Average rent (SFH): $1,600/month
• Rent-to-price ratio: 0.84%
• Cap rate: 7.0-8.5%
• Cash-on-Cash return: 9-14%
• Property tax rate: 0.41% (lowest in U.S.)
• Eviction timeline: 4-5 weeks
• Job growth: +1.7% (healthcare, education, finance)
• Best neighborhoods: Homewood, Mountain Brook (expensive), Hoover, Vestavia Hills

Why it's #2: Ultra-low property taxes mean more profit. Birmingham is stable and affordable, though appreciation is slow.

3. Cleveland, Ohio

Midwest cash flow king

Cleveland has cheap properties and strong rental demand from hospitals, universities, and a stable economy.

• Median home price: $180,000
• Average rent (SFH): $1,550/month
• Rent-to-price ratio: 0.86%
• Cap rate: 7.5-9.5%
• Cash-on-Cash return: 10-16%
• Property tax rate: 1.86% (moderate-high)
• Eviction timeline: 5-7 weeks
• Job growth: +1.3% (healthcare, education)
• Best neighborhoods: Lakewood, Shaker Heights, Parma, Strongsville

Why it's #3: Cleveland offers some of the highest cash-on-cash returns if you buy right. Avoid rough neighborhoods; stick to suburbs.

4. Indianapolis, Indiana

Strong Midwest stability

Indianapolis is a reliable, boring market with consistent cash flow and landlord-friendly laws.

• Median home price: $240,000
• Average rent (SFH): $1,850/month
• Rent-to-price ratio: 0.77%
• Cap rate: 6.5-8.0%
• Cash-on-Cash return: 8-12%
• Property tax rate: 0.81%
• Eviction timeline: 4-5 weeks
• Job growth: +2.0% (logistics, healthcare, manufacturing)
• Best neighborhoods: Carmel, Fishers, Noblesville, Greenwood

Why it's #4: Indianapolis is steady and predictable. Lower risk than Memphis or Cleveland, but also lower returns.

5. Huntsville, Alabama

Hidden gem with government and tech jobs

Huntsville is home to NASA, defense contractors, and a growing tech sector. Strong job market = strong rental demand.

• Median home price: $280,000
• Average rent (SFH): $2,100/month
• Rent-to-price ratio: 0.75%
• Cap rate: 6.0-7.5%
• Cash-on-Cash return: 8-11%
• Property tax rate: 0.38% (ultra-low)
• Eviction timeline: 4-5 weeks
• Job growth: +3.2% (aerospace, defense, tech)
• Best neighborhoods: Madison, Hampton Cove, Harvest, Owens Cross Roads

Why it's #5: Huntsville is the safest high-cash-flow market. Strong jobs, low taxes, and appreciating. Best of both worlds.

6. Jacksonville, Florida

Florida cash flow + appreciation

Jacksonville offers the best cash flow in Florida while still benefiting from population growth and appreciation.

• Median home price: $340,000
• Average rent (SFH): $2,300/month
• Rent-to-price ratio: 0.68%
• Cap rate: 5.5-7.0%
• Cash-on-Cash return: 7-10%
• Property tax rate: 0.91%
• Eviction timeline: 3-5 weeks
• Job growth: +2.7% (logistics, finance, healthcare)
• Best neighborhoods: Ponte Vedra, Mandarin, Riverside, St. Johns County

Why it's #6: Jacksonville is the sweet spot—cash flow plus appreciation. Strong landlord laws and no [state income tax](/blog/states-with-no-income-tax-investing).

7. Cincinnati, Ohio

Stable Midwest cash flow

Cincinnati is similar to Cleveland but safer and more stable. Lower returns but lower risk.

• Median home price: $230,000
• Average rent (SFH): $1,750/month
• Rent-to-price ratio: 0.76%
• Cap rate: 6.5-8.0%
• Cash-on-Cash return: 8-11%
• Property tax rate: 1.46%
• Eviction timeline: 5-6 weeks
• Job growth: +1.6% (healthcare, manufacturing, finance)
• Best neighborhoods: Mason, West Chester, Hyde Park, Blue Ash

Why it's #7: Cincinnati is boring and profitable. Great for conservative investors who want steady cash flow.

8. Kansas City, Missouri

Midwest affordability + stability

Kansas City offers affordable properties, solid rents, and a diversified economy.

• Median home price: $250,000
• Average rent (SFH): $1,800/month
• Rent-to-price ratio: 0.72%
• Cap rate: 6.0-7.5%
• Cash-on-Cash return: 7-10%
• Property tax rate: 1.38%
• Eviction timeline: 4-6 weeks
• Job growth: +1.8% (logistics, healthcare, tech)
• Best neighborhoods: Overland Park (KS), Leawood (KS), Liberty, Lee's Summit

Why it's #8: Kansas City is underrated. Strong economy, affordable prices, and good cash flow. Low drama.

9. Fort Wayne, Indiana

Small city, big returns

Fort Wayne is Indiana's second-largest city and offers better cash flow than Indianapolis at lower prices.

• Median home price: $200,000
• Average rent (SFH): $1,500/month
• Rent-to-price ratio: 0.75%
• Cap rate: 7.0-8.5%
• Cash-on-Cash return: 9-12%
• Property tax rate: 0.85%
• Eviction timeline: 4-5 weeks
• Job growth: +1.5% (manufacturing, healthcare, logistics)
• Best neighborhoods: Aboite, Southwest, Leo-Cedarville

Why it's #9: Fort Wayne is cheap and stable. Great for beginners who want simple cash flow.

10. Columbus, Georgia

Southern cash flow sleeper

Columbus is near Fort Benning (military base) and offers strong rental demand with low prices.

• Median home price: $190,000
• Average rent (SFH): $1,500/month
• Rent-to-price ratio: 0.79%
• Cap rate: 7.0-8.5%
• Cash-on-Cash return: 9-13%
• Property tax rate: 1.05%
• Eviction timeline: 4-5 weeks
• Job growth: +1.4% (military, manufacturing, logistics)
• Best neighborhoods: North Columbus, Midland, Phenix City (AL side)

Why it's #10: Military presence = stable rental demand. Cheap properties and solid cash flow.

11. Little Rock, Arkansas

Cheap entry point

Little Rock offers some of the cheapest properties in the country with decent rents.

• Median home price: $180,000
• Average rent (SFH): $1,400/month
• Rent-to-price ratio: 0.78%
• Cap rate: 7.0-8.5%
• Cash-on-Cash return: 9-13%
• Property tax rate: 0.61%
• Eviction timeline: 4-6 weeks
• Job growth: +1.2%
• Best neighborhoods: West Little Rock, Maumelle, Bryant

Why it's #11: Very affordable entry point. Good for investors scaling portfolios on limited capital.

12. Chattanooga, Tennessee

Scenic + cash flow

Chattanooga has transformed into a tech hub (gigabit internet) while maintaining affordable housing.

• Median home price: $310,000
• Average rent (SFH): $2,000/month
• Rent-to-price ratio: 0.65%
• Cap rate: 5.5-7.0%
• Cash-on-Cash return: 6-9%
• Property tax rate: 0.73%
• Eviction timeline: 4-6 weeks
• Job growth: +2.1% (tech, manufacturing, tourism)
• Best neighborhoods: Signal Mountain, East Brainerd, Hixson, Ooltewah

Why it's #12: Chattanooga is appreciating while still offering cash flow. Great quality of life attracts good tenants.

13. Oklahoma City, Oklahoma

Energy sector stability

Oklahoma City has rebounded from the oil crash and offers stable cash flow with affordable prices.

• Median home price: $230,000
• Average rent (SFH): $1,650/month
• Rent-to-price ratio: 0.72%
• Cap rate: 6.5-8.0%
• Cash-on-Cash return: 7-10%
• Property tax rate: 1.08%
• Eviction timeline: 3-5 weeks
• Job growth: +1.7% (energy, aerospace, government)
• Best neighborhoods: Edmond, Yukon, Moore, Norman

Why it's #13: OKC is stable and affordable. Energy sector provides economic base.

14. Toledo, Ohio

Rust Belt value play

Toledo is rough around the edges but offers monster cash flow for experienced investors.

• Median home price: $160,000
• Average rent (SFH): $1,300/month
• Rent-to-price ratio: 0.81%
• Cap rate: 8.0-10.0%
• Cash-on-Cash return: 10-15%
• Property tax rate: 1.62%
• Eviction timeline: 5-7 weeks
• Job growth: +0.8%
• Best neighborhoods: Perrysburg, Sylvania, Maumee (suburbs)

Why it's #14: High returns but higher risk. Stick to suburbs; avoid inner city.

15. Dayton, Ohio

Ohio's third cash flow city

Dayton is similar to Toledo—high cash flow, higher risk, but profitable for experienced investors.

• Median home price: $165,000
• Average rent (SFH): $1,350/month
• Rent-to-price ratio: 0.82%
• Cap rate: 7.5-9.5%
• Cash-on-Cash return: 10-14%
• Property tax rate: 1.53%
• Eviction timeline: 5-6 weeks
• Job growth: +1.0% (healthcare, aerospace, education)
• Best neighborhoods: Kettering, Centerville, Beavercreek

Why it's #15: Great cash flow if you know the market. Wright-Patterson Air Force Base provides stability.

Cash Flow Calculation Example

Let's run numbers on a typical Memphis property:

Purchase Details:

• Price: $180,000
• Down payment (20%): $36,000
• Closing costs (3%): $5,400
• Total cash invested: $41,400

Financing:

• Loan amount: $144,000
• Interest rate: 7.5%
• Monthly P&I: $1,006

Income:

• Monthly rent: $1,650

Expenses:

• Property tax (1.05%): $158/month
• Insurance: $100/month
• HOA: $0
• Vacancy (5%): $83/month
• Repairs (10%): $165/month
• Property management (10%): $165/month
• Total expenses: $671/month

Cash Flow:

• Rent: $1,650
• P&I: -$1,006
• Expenses: -$671
• Monthly cash flow: -$27 (break-even)

Wait, that's negative! But let's look at annual returns:

Year 1 Analysis:

• Negative cash flow: -$324/year
• Principal paydown: ~$2,400/year
• Appreciation (2%): $3,600/year
• Total return: $5,676
• ROI on $41,400 invested: 13.7%

Even with slight negative cash flow, the total return is strong due to principal paydown and appreciation.

Pro tip: If you buy below market or increase rent by $50-100, you flip to positive cash flow immediately.

Tips for Maximizing Cash Flow

1. Buy Below Market Value

Negotiate hard. Every $10,000 off the price saves $50/month in mortgage payments.

2. Target 0.8%+ Rent-to-Price Ratios

Don't settle for marginal deals. Wait for properties that hit your numbers.

3. Minimize Vacancy

• Screen tenants carefully
• Price rent competitively
• Keep properties in good condition

4. Control Expenses

• Self-manage if local (save 8-10%)
• Bundle insurance policies
• Build a handyman network

5. Increase Rents Annually

3-5% annual increases compound over time.

6. Add Value

• Update kitchens/bathrooms
• Add laundry hookups
• Improve curb appeal

Small improvements can justify $50-150/month rent increases.

Markets to Avoid for Cash Flow

Low Cash Flow Cities (Appreciation Plays):

• San Francisco (0.25% rent-to-price ratio)
• Los Angeles (0.35%)
• Seattle (0.40%)
• Boston (0.45%)
• Austin (0.50%)
• Denver (0.52%)

These cities are great for long-term appreciation but terrible for cash flow.

Final Thoughts

The best cities for cash flow are:

1. Memphis – Highest returns, requires experience
2. Birmingham – Lowest taxes, stable
3. Cleveland – Strong returns, higher risk
4. Indianapolis – Safe and boring (good thing)
5. Huntsville – Best all-around (cash flow + jobs + appreciation)

If you want safe cash flow: Indianapolis, Kansas City, Cincinnati

If you want maximum returns: Memphis, Cleveland, Birmingham

If you want cash flow + appreciation: Jacksonville, Huntsville, Chattanooga

Always run the numbers on individual properties. City-level data is a starting point, but every deal is different. Target 0.8%+ rent-to-price ratios, buy below market, and manage expenses aggressively.

Cash flow gives you [financial freedom](/blog/debt-free-lifestyle). Appreciation builds wealth. The best cities offer both.

Related Articles

• [Using a HELOC as a [Down Payment for Rental Property](/blog/investment-property-down-payment)](/blog/heloc-for-rental-property-down-payment)
• Property Taxes Explained: How They Work and How to Reduce Them
• [Complete Guide to [Rental Property Tax Deductions](/blog/rental-property-accounting-guide) for Landlords (2026)](/blog/rental-property-tax-deductions)