Each rung inside a 15 minute radius, or follow the better numbers across the metro?

Before you pick a radius, check the zoning and rental rules in each place you're considering. Some cities require rental registration or an inspection when a house converts from owner-occupied to rented, and a handful license short of that but still charge a fee and set a schedule. That varies by municipality, not just by state, and it can turn a 40 minute house into a 40 minute house plus an annual inspection you have to be present for.

255 on 1,800 versus 340 on 2,050 isn't close on the ratio and you know it. The commute is the honest objection. An hour a day for a year is 250 hours, and if you'd rather have those hours than the 85k of basis difference, that's a real answer, just say it out loud.

I've been mapping the same thing for six months and I've noticed I keep widening the radius as an excuse to not buy. Every week there's a better ratio one more exit out. If I don't fence the search, I never sign anything.

@pike that's the trap. I look at small rural markets and the ratios out there make the east side look expensive, and I still haven't bought, because the ratio was never what was stopping me. @wren, the thing to test on the east side is whether rents there have moved at all in five years. Cheap and flat is a different asset than cheap and rising, and price to rent alone won't tell you which one you're standing in.

Does the answer change if you plan to hand it all to a manager eventually anyway? Genuinely asking, because if management is coming in year six either way, the self-management argument for a tight radius is only worth five years of savings.

It changes the renovation side, @beacon. Anything I do on a house 40 minutes out costs more, because I'm not dropping in twice a day and my scope creeps when I can't see it. On a house near me I catch the plumber cutting into the wrong joist. On the far one I find out at the walkthrough and eat 3,000. That gap is real money every occupancy year, since you'll be doing work while you live there.

From the management chair, spread out is fine and clustered is cheaper. What actually costs you is being spread across different rent tiers, since the 1,800 house and the 2,600 house need different screening, different turn standards, and honestly different vendors. Five houses in three neighborhoods at similar rents is easy. Five houses across three tiers is three little businesses. Also, most managers will quote you the same percentage either way, so the savings from clustering land in your pocket only while you self-manage.

Everyone I've watched raise money later was clustered, because the story is simpler and the comps are the same comps. Not relevant at rung two, but it's the reason I'd cluster.

The thing I hadn't considered is that in this strategy the radius decision is also a decision about where you live for a year at a time, and I'm still figuring out where I fit in that. That's a life question wearing a spreadsheet.

@plumb said the part I was circling. @wren, I'd add one number to your comparison: the east side house at 255 rents for 1,800 today, but what does the payment look like when you're the one living in it with 3.5 percent down and mortgage insurance on top? Your own housing cost during the occupancy year is part of the ladder's math, and the cheaper house probably wins there too, which strengthens the spread-out case more than the ratio does.