Real estate investors scouring affordable metros in search of bargains they can rent out at a healthy profit margin are reshaping those markets — and small-scale landlords continue to crowd out larger players.

The US investment landscape is increasingly divided: In high-priced Western and coastal states, such as Montana and California, deep-pocketed aspiring landlords are willing to pay up to 35% above the median sales price in anticipation of high returns, according to the latest Realtor.com® Investor Report Midyear Update .

On the other end of the spectrum, in more affordable Heartland states such as Michigan, Maryland, and Wisconsin, investors are zeroing in on the lower end of the housing market, sometimes paying less than half of what a typical homebuyer would.

“Even

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