Best Cities to Invest in Real Estate with Rental Property Growth

InvestingReal Estate

Many real estate investors seek out these top housing markets with rental properties that have a high median home price to rent ratio. All the cities listed below have a healthy real estate market to purchase low-cost investment properties in areas where rental income is quite high.

Boise

Boise, Idaho Cityscape
Boise, Idaho Cityscape

You might not expect this, but Boise is continually seeing increased investment property values across the board in home purchase price and rental demand. However, not many people know that Boise is a record-setter, as one of the best real estate investment options in the US.

The balance between the limited supply and big requests is pumping up prices for all types of properties. Recently, the real estate market in the US has scored No.2 place in the top American real estate markets for 2022, according to Realtor.com.

This takes into account the forecasts for the current year, meaning the expected growth both in home sales (amounting to 12.9%) and in prices (forecasted to reach a 7.9% increase).

Compared to 2020, average housing prices in the Boise Metro area and Ada County increased $75,000 settling in at a median of $575,000. The appreciation rate also boomed in Boise, up 11% since last year.

Spokane

Spokane, Washington Riverfront Park
Spokane, Washington Riverfront Park

Being one of the hottest real estate investment markets in the US, for several years, you could expect Spokane to keep following the same increasing investment trend for 2022, also. Accordingly, the average sale price reached this year at the $430,000 level, which shows an extra $90,000 compared to the last year’s $340,000 average landmark.

Spokane is mostly a niche property market, as two-thirds of its houses are single-family type. The most sought-after areas in 2022, are the north side (north of Garland street) followed by Perry District, which experiences fast growth, the Spokane Valley, and the Liberty Lake area.

Keep in mind that specialists considered the Spokane market to be in a rebalancing period, due to the increase in mortgage rates and a slight decrease in sales number, in general.

Indianapolis

Indianapolis, Indiana Cityscape
Indianapolis, Indiana Cityscape

With over 2.1 million inhabitants, Indianapolis is the 14th largest city in the US, and the 2nd largest in the Midwest,. This city presents itself as an affordable real estate investment, with growing job opportunities, numerous competitive schools, and universities, sports clubs, and attractions, metropolitan house prices around $240,000, and rent fees around $1,400.

After years and billions of dollars invested in rehabilitation and modernization, there’s no wonder Indianapolis has gained a good position among the most desired cities to live in. They city resides in one best real estate markets in Indiana and has great downtown core. Another benefit of living in Indianapolis is the reduced living costs, which are under the national average.

Columbus

Columbus, Ohio Cityscape At Night
Columbus, Ohio Cityscape At Night

Another city with a great real estate market is Columbus. The average sale price goes up to $175,000, which is very affordable, even when using a real estate investor line of credit. Buying a home in Columbus Ohio is something within the reach of any average-income household. The real estate market here is steadily increasing, whereas the population growth registers a slow, yet continuous increase. Under these circumstances, the real estate value during 2021, registered an encouraging 8% growth.

Property buyers mainly focus on the older, well-established neighborhoods in Columbus, as well as on the older houses which, however, are well renovated. Since the offer for these families dedicates, to reliable homes are limited, you can expect the prices to always move up.

The average rental fee goes to $1,250. However, keep in mind that the request for Columbus houses is not equally distributed all over the city, since there are big differences between one area and the other when it comes to the lifestyle and building quality. Columbus also has neighborhoods that are very poor economically, and offer lower rental fees for low income.

The best deals in Columbus can be found in Grandview Heights, North Linden, Italian Village, Near East Side, Olde Towne East, Downtown Columbus, Upper Arlington, and Franklinton.

Tampa

Tampa Bay, Florida Cityscape
Tampa Bay, Florida Cityscape

Second after Miami, on Florida’s west coast, Tampa city, or Tampa Bay is one of the best cities to buy real estate. It’s a busy and crowded city with over 3.1 million inhabitants. Average home sale prices in Tampa are around $325,000, whereas the monthly rental income can reach $2,000 per month.

The weather is attractive, as it is constantly moderate during the whole year round. There are numerous entertaining resources in Tampa, like the Busch Gardens, the Tampa Zoo, sports activities, and professional teams in many sports branches.

Opportunities for real estate investment here are really good due to a big increase in population numbers, and the extended job opportunities in many diverse fields. Tampa is one of the fastest growing cities, leading to strong growth in real estate values. This trend is expected to continue during 2022, and 2023, which translates into a good appreciation.

Their metropolitan area is ranked among the best growth in the US, with an economy of over $169 billion. Not only job increase is of interest for the Tampa investors, but also the healthcare system and the financial one are seeing considerable improvements. Tampa is the home of four of the Fortune 500 businesses, and over 19 companies that have an overall revenue of $1 billion.

Property held in Florida has property taxes lower than in many other parts of the country. The US average real estate tax is 1.08%, whereas the Florida taxes only reach 0.98%.

Dallas

Dallas, Texas Cityscape
Dallas, Texas Cityscape

Situated in northern of Texas, Dallas has is the fourth most populated metro area in the United States. The average rent is $1,700 and median sales price for housing is $340,000.

Real estate investing has skyrocketed of late with Dallas expanding to recently due to the several large corporations moving their headquarters here. Among them are businesses operating in the aviation and aerospace, oil and gas, manufacturers, as well as 43% of the high-tech Texan companies.

There is also high rate of job growth in Dallas and Dallas-Fort Worth with work opportunities available at prestigious companies such as Bank of America, American Airlines, Baylor Scott & White Health, Dallas ISD, Texas Health Resources, and Lockheed Martin Aeronautics.

Dallas downtown is a very attractive location, with a dense concentration of bars, bistros, restaurants and shopping centers, and numerous cultural and artistic locations and events. This city also hosts some of the most famous American sports teams, the Dallas Cowboys (NFL), Dallas Mavericks (NBA), Texas Rangers (MLB), Dallas Stars (NHL), FC Dallas (MLS), and Dallas Wings (WNBA).

For Rental Income

The Austin real estate market really shot through the roof last year with median rent growth on one-bedroom unit rising a shocking 120%. The next nearest riser was Long Beach, California at 62%, but the housing market here is quite expensive and you’d need a heavy cash flow or a hard money loan to buy investment property in the area.

An increase in home values in other big metropolises drove rising rents in places Jersey City (48%), New York City (45%), as well as, Freemont, California (43%).

Some other high-risers in the single-family rental market were Lexington, Kentucky (41%), Durham, North Carolina (39%), Cincinnati, Ohio (38%), and Montgomery, Alabama (37%). The key factors here are rental real estate is much cheaper than in larger city while rental market is still high enough to ensure to maintain a healthy return on investment.