Best Market to Buy Investment Rental Single Family Homes

Final updated on January 6, 2022

There are a lot of people today who would like to invest in existent estate, simply prices in the city they alive in are too high, or the returns are too low.

The proficient news is that with long-altitude real estate investing, y'all tin can discover plenty of places to purchase rental belongings where prices are low and cash flow is stiff. Well-nigh of these places have the aforementioned things in common, including good job markets, ascent rents, and increasing property values.

In this article, we'll look at 30 places where rental property could be a great investment, and give yous some important tips on long distance real estate investing.

What makes a identify favorable for rental holding?

When you lot invest in rental holding to agree over the long-term, it's important to look at the large picture and take into business relationship the growth and demand for rental holding in different real estate markets in the U.Southward.

Here are some of the cardinal criteria that many investors believe can make a place good for rental holding:

• Home value and median toll indexes published by the National Clan of Realtors (NAR) and Zillow because higher housing prices can betoken a potent demand for rental belongings
• Growth in housing prices year-over-twelvemonth and projected future price increases indicate how much property could capeesh.
• Historical annual growth in rents is a source used to help predict time to come increases or decreases.
• Rent index indicates whether rent increases are faster or slower than the rate of aggrandizement, and too shows the supply and demand atmospheric condition for rental housing.
• Unemployment, job growth, and population growth rates indicate how strong the local economy is and the potential demand for housing.
• Median age of residents, with markets having a large percentage of Millennials and Generation Z (people born subsequently 1997) residents often being the all-time places to own rental property.
• Cap rate (also known as rental yield) measures the charge per unit of return yous receive from income property in different markets, although markets with high returns may non always be the best if economic conditions are declining.
• Gross rent multiplier (GRM) compares gross rental income to property price, and the lower the GRM the quicker you will be able to pre-pay the mortgage own the belongings free and articulate.

30 places to consider buying rental property

Based on those criteria, here are some attractive places to consider when y'all are thinking about buying rental property. The domicile value information comes from Zillow as of Nov 2021, rent statistics for a iii-bedroom dwelling house come from Zumper as of January 2022, the job and population growth statistics from DataUSA.io compare 2018 to 2019, and population and x-year population growth (2010 vs 2020) is from the U.S. Census Bureau:

Albuquerque, New Mexico

• Home value: $277,530
• 1-year price growth: 18.9%
• Median rent: $ane,690
• ane-year rent growth: 21%
• Task growth: 1.9%
• Population: 564,559
• Population growth 1-year: 0.05%
• 10-year population growth: iii.4%

Arlington, Texas

• Dwelling house value: $289,787
• 1-twelvemonth toll growth: 23.nine%
• Median hire: $1,993
• ane-twelvemonth hire growth: 18%
• Job growth: -5.5%
• Population: 394,266
• Population growth one-twelvemonth: 0.2%
• 10-twelvemonth population growth: seven.ix%

Atlanta, Georgia

• Home value: $359,314
• 1-twelvemonth toll growth: 17.4%
• Median rent: $2,274
• one-yr rent growth: 23%
• Job growth: 2.1%
• Population: 498,715
• Population growth 1-year: 1.viii%
• x-year population growth: 18.7%

>> Browse Atlanta rental properties

Birmingham, Alabama

• Home value: $95,589
• 1-yr price growth: 23.5%
• Median rent: $1,153
• 1-year hire growth: 5%
• Job growth: 1.8%
• Population: 200,733
• Population growth ane-year: 0.1%
• 10-year population growth: -v.4%

>> Browse Birmingham rental backdrop

Boise, Idaho

• Home value: $519,081
• ane-year toll growth: 35.half-dozen%
• Median rent: $i,995
• 1-year hire growth: 14%
• Job growth: one.98%
• Population: 226,115
• Population growth 1-twelvemonth: 0.81%
• 10-year population growth: fourteen.6%

Charlotte, Northward Carolina

• Home value: $343,760
• 1-year toll growth: 25.0%
• Median rent: $one,770
• 1-yr rent growth: 11%
• Job growth: 3.4%
• Population: 874,579
• Population growth one-year: 1.5%
• 10-yr population growth: nineteen.6%

>> Browse Charlotte rental backdrop

Cincinnati, Ohio

• Domicile value: $215,291
• 1-year cost growth: 17.0%
• Median rent: $1,525
• ane-twelvemonth rent growth: 8%
• Task growth: i.4%
• Population: 309,317
• Population growth one-year: 0.four%
• 10-year population growth: iv.2%

>> Scan Cincinnati rental properties

Cleveland, Ohio

• Home value: $97,865
• 1-year toll growth: 23.7%
• Median rent: $1,050
• one-year rent growth: 0%
• Job growth: one.2%
• Population: 372,624
• Population growth 1-year: -0.vii%
• x-yr population growth: -6.ane%

>> Browse Cleveland rental properties

Colorado Springs, Colorado

• Abode value: $451,498
• 1-year price growth: 27.eight%
• Median hire: $1,995
• i-year hire growth: sixteen%
• Task growth: 3.0%
• Population: 478,961
• Population growth 1-year: 1.2%
• x-year population growth: 15.0%

Columbia, Due south Carolina

• Home value: $188,892
• one-yr price growth: xix.9%
• Median rent: $1,300
• 1-yr hire growth: viii%
• Job growth: -0.5%
• Population: 136,632
• Population growth ane-year: -0.01%
• Population growth 10-year: five.7%

>> Browse Columbia rental properties

Columbus, Ohio

• Dwelling value: $219,064
• 1-year toll growth: 17.5%
• Median rent: $1,650
• i-year rent growth: 14%
• Job growth: 4.5%
• Population: 905,748
• Population growth i-yr: 1.6%
• 10-twelvemonth population growth: 15.1%

>> Browse Columbus rental properties

Dallas, Texas

• Home value: $290,564
• i-year cost growth: 20.0%
• Median rent: $2,325
• 1-year hire growth: 16%
• Job growth: 0. 01%
• Population: 1,304,379
• Population growth 1-yr: -0.1%
• 10-year population growth: eight.9%

>> Scan Dallas rental properties

Des Moines, Iowa

• Home value: $176,730
• one-year cost growth: 13.9%
• Median rent: $1,295
• one-year rent growth: half-dozen%
• Job growth: 0.9%
• Population: 214,133
• Population growth 1-year: -0.1%
• ten-year population growth: 5.3%

Detroit, Michigan

• Home value: $63,449
• one-year price growth: 37.6%
• Median rent: $1,100
• 1-year rent growth: 12%
• Chore growth: 4.7%
• Population: 639,111
• Population growth i-twelvemonth: -0.four%
• ten-year population growth: -ten.five%

>> Browse Detroit rental properties

Grand Rapids, Michigan

• Home value: $235,544
• 1-twelvemonth price growth: sixteen.8%
• Median rent: $i,500
• 1-yr hire growth: seven%
• Job growth: two.4%
• Population: 198,917
• Population growth ane-yr: 0.vii%
• x-year population growth: 5.8%

Greenville, Due south Carolina

• Home value: $259,184
• ane-year cost growth: 15.5%
• Median rent: $1,660
• 1-twelvemonth rent growth: 19%
• Job growth: i.93%
• Population: 920,477
• Population growth i-year: 1.53%
• 10-twelvemonth population growth: 16.5%

>> Browse Greenville rental properties

Houston, Texas

• Abode value: $241,052
• 1-twelvemonth price growth: 17.vi%
• Median rent: $ane,925
• 1-year rent growth: 17%
• Job growth: -0.nine%
• Population: 2,304,580
• Population growth 1-year: -0.4%
• x-year population growth: 9.8%

>> Browse Houston rental properties

Huntsville, Alabama

• Dwelling house value: $253,036
• i-year cost growth: 23.6%
• Median rent: $1,495
• ane-year rent growth: 17%
• Job growth: 1.3%
• Population: 215,006
• Population growth 1-yr: 3.ane%
• 10-twelvemonth population growth: xix.4%

>> Browse Huntsville rental backdrop

Indianapolis, Indiana

• Dwelling house value: $199,900
• i-year price growth: 18.3%
• Median hire: $1,425
• one-yr rent growth: 12%
• Job growth: 0.i%
• Population: 887,642
• Population growth 1-year: 0.7%
• Population growth 10-year: 8.2%

>> Scan Indianapolis rental backdrop

Jacksonville, Florida

• Home value: $264,271
• one-yr toll growth: 25.2%
• Median hire: $ane,800
• ane-yr hire growth: 19%
• Job growth: one.half-dozen%
• Population: 949,611
• Population growth i-year: 0.8%
• 10-year population growth: 15.six%

>> Browse Jacksonville rental properties

Kansas City, Missouri

• Domicile value: $209,238
• 1-year cost growth: 17.8%
• Median hire: $1,495
• ane-yr rent growth: twenty%
• Population: 508,090
• Job growth: two.four%
• Population growth i-twelvemonth: 0.vii%
• 10-twelvemonth population growth: x.5%

>> Browse Kansas Metropolis rental properties

Memphis, Tennessee

• Home value: $134,721
• 1-year price growth: 20.7%
• Median rent: $i,545
• one-year rent growth: 39%
• Job growth: 2.5%
• Population: 633,104
• Population growth 1-year: 0.ane%
• x-twelvemonth population growth: -2.one%

>> Browse Memphis rental properties

Orlando, Florida

• Home value: $325,415
• 1-year price growth: 21.iii%
• Median rent: $ii,168
• 1-yr rent growth: 24%
• Job growth: 0.1%
• Population: 307,573
• Population growth 1-year: 0.half dozen%
• Population growth 10-year: 29%

>> Browse Orlando rental properties

Pittsburgh, Pennsylvania

• Abode value: $222,884
• 1-twelvemonth price growth: 14.5%
• Median rent: $i,650
• i-yr hire growth: half-dozen%
• Job growth: 3.ii%
• Population: 302,971
• Population growth ane-yr: -0.three%
• ten-year population growth: -0.9%

>> Scan Pittsburgh investment properties

Raleigh, N Carolina

• Home value: $396,232
• one-year toll growth: 28.8%
• Median rent: $1,761
• 1-yr rent growth: 11%
• Task growth: -2.43%
• Population: 474,708
• Population growth i-yr: 0.89%
• 10-year population growth: 15.8%

>> Browse Raleigh rental properties

Salt Lake City

• Domicile value: $573,564
• 1-year toll growth: 24.1%
• Median rent: $1,998
• 1-year rent growth: 18%
• Task growth: 3.0%
• Population: ane,232,696
• Population growth 1-twelvemonth: 0.83%
• 10-year population growth: fifteen.1%

San Antonio, Texas

• Abode value: $243,114
• 1-twelvemonth price growth: 20.5%
• Median hire: $1,725
• one-year rent growth: 15%
• Job growth: 4.i%
• Population: 1,434,625
• Population growth one-year: 1.0%
• ten-year population growth: 8.1%

>> Scan San Antonio rental backdrop

Seattle, Washington

• Abode value: $888,202
• i-yr price growth: 11.2%
• Median rent: $3,100
• 1-year rent growth: xv%
• Chore growth: one.79%
• Population: three,979,845
• Population growth one-yr: one.0%
• x-year population growth: 17.5%

St. Petersburg, Florida

• Habitation value: $311,107
• one-year price growth: 29.7%
• Median rent: $2,500
• i-year rent growth: 28%
• Task growth: 1.6%
• Population: 258,308
• Population growth one-yr: 0.1%
• 10-year population growth: ii.3%

Tampa, Florida

• Home value: $354,100
• 1-year price growth: 29.3%
• Median rent: $2,325
• 1-year rent growth: 30%
• Job growth: 3.4%
• Population: 384,959
• Population growth one-year: 1.vii%
• Population growth 10-year: 14.7%

>> Browse Tampa rental properties

Why practise rents go along rising?

Even during a recession, rent in many real estate markets across the U.S. keeps rising, although sometimes at a slower step over the short-term.

According to Rentonomics, since 1960 rents have consistently increased in the U.S., fifty-fifty during periods when real median household incomes have declined. During the 60 year period between 1960 and today, there have been viii recessions. Yet, throughout those troubled times, rents still continued to rise.

Here are some of the reasons why residential rents continue going up year after yr:

• Demand from tenants at lower hire prices and income segments, such equally workforce housing rented to teachers, police, and service workers.
• Housing prices have become increasingly unaffordable, creating more demand for rental property.
• Recent multifamily construction over the past few years has focused on luxury living for high-income earners, instead of building badly needed rental holding for the middle market.

Merely maybe the biggest reason why rents in the U.South. keep ascension is because of Millennials. Millennials (currently betwixt 26 – 40 years former) make upwards the largest percentage of renters beyond the U.Southward.

Even though this demographic is nearing their prime earning years, many are "planning to hire forever" due to the flexibility that renting offers and the hidden costs of homeownership.

Biggest challenges of owning rental holding

Although the demand for rental holding keeps growing - right along with rents - owning rental property equally an investor isn't ever easy. While there are enough of benefits to investing in income holding, including cash flow and preferential revenue enhancement treatment, in that location are some challenges to be aware of as well:

• Finding good rental property at affordable prices.
• Hiring a nifty local property management visitor.
• Maintaining positive cash period with cost-effective repairs.
• Increasing ROI through strategic value add piece of work that increases income.
• Knowing which existent estate markets offer the highest potential returns.
• Locating turnkey unmarried-family houses that are cash flow positive the 24-hour interval escrow closes.

Final thoughts

There are a lot of factors that go into making a place slap-up to buy rental holding in. Instead of focusing on merely one or two metrics, it'south a good idea to compare and contrast unlike real estate markets to one some other.

Other metrics to employ when deciding which rental property markets to invest in include neighborhood ratings, school rankings, criminal offence rates, vacancy rates, concern-friendly government, and if landlord-tenant laws favor you or the renter.

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Source: https://learn.roofstock.com/blog/best-places-to-buy-rental-property

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