The Best Buy-to-Let Markets in the USA: Five Real Properties, Reviewed

Every list of the best American buy-to-let markets works the same way. A city, a median price, a gross yield. Kansas City 12%. Cleveland 12%. Memphis 10%.

The numbers are usually accurate. They are also close to useless, and I can show you why with five real properties rather than an opinion.

I pulled five listings currently being marketed to out-of-state investors, mostly as turnkey deals. Then I did what I'm paid to do: I lifted the hood and verified the sellers' claims. I got my own insurance quotes and looked up the actual tax bills instead of taking the seller's figures. Then I ran all five through the same running costs analysis using my own numbers, not theirs.

The headline yields spread four percentage points. What actually ends up in your bank account spreads only two. So roughly half the difference you are being sold vanishes when you pay the bills.

And one of them, on a proper net basis, does worse than a real buy to let terraced house in Liverpool.

Where most foreign buyers actually go

This is worth knowing before we get to the Midwest, because almost nobody buying American property from abroad is buying any of this.

The National Association of Realtors published its 2026 figures at the end of July. Foreign buyers spent $45.3 billion on US homes in the year to March. Florida took 20% of them. California 19%. Texas 12%. The median price they paid was $465,000.

So most overseas money goes to three expensive, low-yielding states, at about two and a half times the price of anything in this article. That's not surprising. It's just reflective of buyers actually buying vacation homes, or part-lifestyle, part-investment properties.

Florida and Texas also strip investors of the tax breaks that owner-occupiers get, which I will come back to. I talk about the Florida holiday home investment pitch specifically in what British investors get sold in the USA.

The Midwest is not glamorous. Nobody buys a rental in Kansas City for the view. But if you are buying for income, that is where the numbers work best. I have already compared real like for like buy to let properties from the UK and US in is buy-to-let in the USA a good investment.

My bias, before the numbers

I source property in Kansas City and Cleveland. I have teams there, managers I have used for years, contractors I trust. If you buy in either city through me, I get paid.

Both of them come out on top in the table below. I know exactly how that looks, so let me deal with it now rather than hope you don't notice.

Five properties is not a study. It's five properties on five streets in one month, and a different five would produce a different answer. I have also been harder on Cleveland than on anywhere else in the risk section, because it is one of mine and because it deserves it.

For Detroit, Memphis and Indianapolis I am an outsider. I have never owned a property in any of them. What I did was pull real listings, get real insurance quotes and check the public tax records, which is exactly what I would do for a client thinking about one.

That is the position I am writing from. Somebody reviewing other people's deals, not selling you my own.

The five properties

All real, all currently marketed, addresses withheld.

Four of the five are offered to out-of-state investors as turnkey rentals. The Liverpool property is a genuine three-bed terrace I used for an earlier comparison, and it is here so you have something familiar to measure against. The full ten-year model behind it is in buy-to-let mortgages in the USA.

On those numbers you would buy Kansas City or Cleveland, and you would be reasonably pleased with Detroit.

Now look at what happens when you pay the bills.

What they actually net

Same assumptions for all five. Five per cent vacancy, eight per cent management, five per cent maintenance, plus the real property tax and the real insurance quote for each property.

Headline yield against what it actually nets

Ordered by net yield, so the orange bars step down while the navy ones do not. Liverpool has the shortest headline bar of the six and the third tallest net bar. Same assumptions as the table above.

Two things jump out.

The Liverpool terrace had the worst headline yield of all six and finished third. It beat Detroit, Memphis and Indianapolis. Not because Liverpool is a better investment, but because it has no annual property tax and costs £300 a year to insure.

And Detroit went from third to fourth, ending up behind a British terraced house. That is before its tax bill catches up with its sale price, which I will come to. Once it does, Detroit nets about 3%.

Look at Kansas City and Cleveland too. Identical price. Identical rent. Identical headline yield. And a $436 a year difference in what they net, entirely because Cleveland costs more to insure.

That is the whole point of this article. When two properties look identical on every number a listing gives you, the thing that separates them is real world operating costs that aren't in the listing.

The one thing to remember: the headline yield is the number the seller gives you. The net yield is the number that ends up in your bank account. Nobody will work out the second one for you, and if they do, it's probably a very optimistic number based on unrealistic assumptions.

The two costs British investors never see coming

There is a reason the gap between headline and net catches British buyers out, and it is not carelessness. It is that two of the biggest costs simply do not exist in the UK in the same form.

Property tax. In the UK your tenant pays council tax and you, as the owner, pay nothing annually on the asset. Your Liverpool terrace has an annual property tax bill of zero. In America you pay it every year, occupied or empty. On these five properties it ran from about $1,130 to $2,686.

Two warnings about it.

The rates you find online are calculated for owner-occupiers, and investors often do not get the same treatment.

Michigan is the worst example. Owner-occupiers there get a discount that landlords do not, so the same house costs a landlord roughly a third more in tax. Indiana, Florida and Texas all work the same way, giving homeowners breaks that rental owners lose.

And the bill can jump after you buy. The Detroit property in my table shows $1,130 a year on the listing. I looked it up. Its assessment reset when it sold, and it is taxed as a rental with no homeowner discount, which puts the real figure at roughly $3,100. The city currently values it at about $75,000 while it sold for $160,000, so if the valuation catches up, the bill goes to something like $6,600.

Insurance. Your Liverpool terrace costs perhaps £300 a year. These properties came in between $1,171 and $2,210, so roughly four to seven times more.

The reason surprises people: American insurance is priced on what it costs to rebuild the house, not what you paid for it. One of my quotes covered $314,000 on a property costing $175,000. Older wood-framed houses cost a lot to rebuild, and in cheap markets the rebuild figure can be nearly double the price.

Which is why the seller's number is worth checking. On the Indianapolis property the seller's pro forma said $780 a year. I got a quote on a comparable three-bed house at a near-identical price in the same city. It came back at $1,647.

One more thing worth asking about. Not all cover is equal. Some policies pay to rebuild with new materials; others pay the depreciated value of what was lost, so a fifteen-year-old roof settles at a fraction of the cost of a new one. My four quotes came back on four different bases. Ask which one you are getting, in writing.

Why every one of these markets is cheap

Here is the part the yield lists leave out. None of these properties is cheap by accident. Every one of these markets has something wrong with it, and if you do not know what it is, you are not investing, you are guessing.

Memphis has one of the highest violent crime rates in the United States, several times the national average on FBI figures. That shows up in your insurance, in your tenant pool and in how long a vacancy takes to fill. It also had the highest property tax of the five, and the highest total running cost.

Detroit has been rebuilding for two decades and parts of it are genuinely working. But the tax system there is a trap for out-of-state buyers, as the property above shows, and the insurance market takes a dim enough view of the city that my quote had to be placed with a specialist rather than a mainstream insurer. That tells you something the yield does not.

Cleveland is one of mine, and here is its problem. The housing stock is old, mostly timber-framed, and expensive to insure and maintain. The city and its metro area population have been broadly flat for years after decades of decline, which is better than falling but is not growth. More detail in investing in Cleveland real estate, and a real financed purchase there in this Cleveland duplex case study.

Indianapolis was the most expensive property in my table and the lowest yielding. You pay 31% more than Kansas City for the same $1,800 of rent. Indiana is a reasonable state to own in, but that particular listing was priced like a market I would expect more from. In my opinion, it's C class risk with B class pricing.

Kansas City, my other preferred market, is plain. Boring, average, unremarkable. It has no story, no regeneration narrative, nothing to put in a brochure. That is exactly why I like it and it is also why nobody writes excited articles about it. I learned to prefer dull the expensive way, which I have written about in how I nearly went bankrupt buying US rentals. More on the market in investing in Kansas City real estate, and a real client purchase there in Ronald's case study, including the appraisal that came in $16,000 below the contract price.

And the ones not in the table. Toledo property is cheap enough that it falls below the standard I buy to, which is a different objection from Toledo being a bad city. Cheap stock also finances badly, which I have set out in DSCR loans under $100,000. St Louis I have no verified numbers on. Birmingham, Alabama is not really the Midwest and I know least about it. If I put them in a table I would be guessing, and there is enough guessing in this corner of the internet already.

Why I will not rank them

I could put a number one at the top of this article and it would get more traffic. I am not going to, and this is why.

You can buy the same three-bed, two-bath, thousand square foot house on one street in Kansas City and do very well. People want to live there, the neighbours maintain their houses, the rent holds, your tenant stays four years.

Two streets over, the identical house is the worst decision you will make this decade. Same city. Same specification. Roughly the same price. Constant turnover, damage, arrears, and a property nobody wants to buy from you when you have had enough.

That is true in every one of these markets, and it gets truer the cheaper the market is. At the very cheap end you are usually looking at housing voucher tenancies too, which brings its own set of questions I have covered in is Section 8 a good investment.

So when somebody tells you a city is good, they have told you almost nothing. The city sets your running costs, which is what most of this article has been about. The street sets your outcome, and no article, including this one, can tell you about the street.

Which leads somewhere slightly awkward for an industry built on market rankings. The thing that actually determines whether this works is not which city you pick. It is whether the people you rely on are any good. Whoever chose the house, whoever renovated it, whoever manages it, whoever tells you what the street is really like. Get those people right in a mediocre market and you will do better than getting them wrong in a good one.

What I would actually check

Five things, and none of them require expertise. Just asking.

• The actual tax bill on the actual property, from the county or city, not the listing. And ask when it was last valued and whether that valuation is about to change. If the city thinks the house is worth far less than you are paying, expect the bill to rise.
• Your own insurance quote in writing. Not the seller's estimate. With the coverage amount and the type of cover stated on it.
• What the property rents for now, on a signed lease. Not a projection.
• What was actually replaced in the renovation, not painted over. Roof, plumbing, wiring, heating. My due diligence checklist covers the rest.
• And a photograph up the street in both directions, dated. If nobody can send you that, nobody has been there.

If you want to run the numbers on a specific property, the free tools in my investor starter kit will size the deal, the cash you need to close and the reserves it should carry.

The bottom line

Headline yields in the American Midwest cluster between 9% and 12%. After costs, the same five properties clustered between 6% and 8.5%, and the order changed. One of them ended up placing behind a terraced house in Liverpool.

Both of the costs that did the damage are ones you have never paid as a British landlord. You have never had an annual property tax bill on a rental and you have never paid four figures to insure a modest house. So the two numbers most likely to decide your return are the two you are least equipped to check, and the person selling you the property knows that.

None of which makes these bad markets. Kansas City and Cleveland have been good to me and I still buy in both, and my wider reasoning on choosing markets is in the markets I buy in and why. But I would much rather you bought well in a city I have nothing to do with, having checked the tax record and got your own quote, than bought in Kansas City because I told you the yield was 12%.

Remember, investing is a game of probabilities. Check what it costs to hold. Then go and look at the street.