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20 Best Cities To Invest In Real Estate In 2019

Real estate remains an appealing asset class for investors because of the opportunity to earn recurrent income from rentals. If the market dynamics are optimal, your monthly rental income can fully offset the expenses associated with servicing your mortgage. Interest rates remain low and so debt is still cheap. If you can access credit, or otherwise have money to invest, consider real estate and purchase a rental property. It is imperative that you do your research and choose the best cities to invest in real estate in 2019.

How To Choose Best Places To Invest In Real Estate In The World?

Best Cities To Invest In Real Estate

You may be located anywhere in the world, the basic principles of real estate business remain unchanged – you want to choose those places for your investment properties where the return-on-investment is high. To maximize the returns from your real estate investment you want to buy property in places with the following features:

  • High rental occupancy: Check how much of the available housing stock in an area is vacant;
  • High rentals relative to your mortgage repayments: The more of your mortgage you can cover from rentals, the better; and
  • A low tenant default rate: The last thing you want is to buy property in an area when tenants frequently miss rent payments.

Market timing also matters, some cities are exceptional rental prospects, but there are very few houses for sale.

20 Best Places To Invest In Real Estate In 2019

Best Cities To Invest In Real Estate In 2018

We looked at data and examined trends from across the US to bring you this list of the 20 best places to invest in real estate in 2019.

1. Dallas, Texas

Median rental per month: $1,800

Dallas stands at the 1st position. Dallas is a buyer’s market, with over 3000 listings weekly. The strong availability of housing stock and high rental rates relative to the house price make it an accessible market to invest. The Dallas real estate market offers a wide range of investment properties; you just have to find your tenants to rent out the property. Hiring a local property management company can help in finding tenants for your rental property in Dallas.

You should think of investing in Dallas real estate because it has a very diverse economy so there is a niche for people of every income level. It is estimated that 340 people move to Dallas-Fort Worth every-day.

Dallas has the lowest home ownership rate in the country, with renting more affordable than buying. The demand for rental units has increased 14% over the last year, so it’s the perfect opportunity to invest in Dallas real estate. The Metro area is growing and its expected that at least 20000 new homes in this area and in Dallas a total of 50000 new single-family homes and 50000 apartments.

2. Houston, Texas

Median rental per month: $1,550

Houston is the second best city to invest in real estate in 2019. This city is the home of the US oil and gas industry and offers perennial employment opportunities. These strong macroeconomic factors continue to the power the Houston housing market. The average home is valued at $412,000. The rental income of $1,550 is relatively low given the property valuations.

However, what makes Houston a strong investment destination is that it has a very active real estate market. Volumes of trade are high and housing stock moves fast. This means it is fairly easy to exit investments and find a buyer for your home. You may also take a look at – Top 6 Reasons To Invest in Houston Real Estate in 2019.

3. Atlanta, Georgia

Median rental per month: $1,500

Atlanta, GA is the 3rd best city to invest in real estate in 2019. Atlanta, GA offers attractive buying prospects for the savvy rental property investor. The city’s population has grown by over 14 percent in the last decade. This increasing population is driving the housing demand.

Should you buy investment properties in the Atlanta Real Estate Market? Located in the state of Georgia, the city of Atlanta is a hotpot for any type of real estate investmentAtlanta has shown promising population growth and employment, which are two signs of a healthy real estate market.

Atlanta is Georgia’s capital and economic center. It is considered as one of the 10 most productive states that contribute to USA’s GDP annually. As the city continues to go through an economic boom, prices of properties in Atlanta are forecasted to increase in the following years. People will want to beat out the competition and purchase soon if they’re looking to develop a successful career, surrounded by a diverse community, especially for today’s youth.

4. Orlando, Florida

Median rental per month: $1,599

Orlando, FL is at the 4th position in the list of best cities to invest in real estate in 2019. Orlando is a tourism and entertainment favorite, because of this it remains a strong real estate investment destination. Investors have a choice of targeting the long term residential or holiday markets with their properties. Both offer strong returns.

While improving Orlando real estate market and flourishing tourism are two of the most important reasons behind Orlando’s economic stability, these two industries have a lot to gain from the successful economy. This expansion is related to the growing population and job opportunities in this city, this translates to more rental income and tourism leading to better economy for the city.

5. Spokane, Washington

Median rental per month: $1,250

Spokane stands at the 5th position. With a population of only 213,000 people, Spokane is small, but it is a rising real estate hot spot. House prices are relatively cheap compared to much of the country at a median price of $199,900 that offers fantastic mortgage coverage. Data from Zillow shows that the Spokane’s housing market is hotter than Seattle’s for first time in six years. Spokane homes are selling faster than Seattle homes.

One reason to buy Spokane rental properties now instead of waiting is because prices are appreciating so fast. For example, home values increased by more than 10% in 2018. For the average $200,000 home, the value went up $20,000. The median home price increased from $220,000 in 2017 to roughly $260,000 in 2018.

According to Neighborhoodscout.com, single-family detached homes are the single most common housing type in Spokane, accounting for 65.75% of the city’s housing units. Real estate appreciation rates in Spokane’s have tracked to near the national average over the last then years, with the annual appreciation rate averaging 0.23% during the period.

6. Boise, Idaho

Median rental per month: $1,400

Boise is at the 6th position. Boise is a full city, home to more than 200,000 people. Nor is that the entirety of the Boise housing market, since Boise has suburbs. The Boise-Nampa metropolitan area is home to over 700,000 people. This metro area includes Boise, Nampa and Meridian.

Boise home values have gone up 15.3% over the past year and the Boise real estate market forecast is that they will rise 1.8% within the next year. The median list price per square foot in Boise is $184, which is higher than the Boise City Metro average of $164. The median price of homes currently listed in Boise is $310,000. The median rent price in Boise is $1,400, which is higher than the Boise City Metro median of $1,395.

One of the attractions of the Boise real estate market is the sheer number of affordable large single family homes. You could find a four bedroom home for around $200,000, roughly $100,000 below the national average, several years ago. With increasing demand, homes are still a deal at around $250,000.

7. Tampa, Florida

Median rental per month: $1,495

Tampa, FL is at the 7th position in the list of best places to invest in real estate in 2019. With a population of more than 4 million, Tampa, FL is not only an attractive metropolitan area but is also one of the most frequently visited tourist destinations. There are a number of economic and development prospects attached to this market and Tampa, FL was described as one of the hottest real estate markets in the US in 2018.

There’s a tremendous amount of pent-up demand for entry level single family homes in the real estate in Tampa FL. The median home value in Tampa is $221,500 on Zillow. Tampa home values have gone up 9.8% over the past year and their Tampa real estate market prediction is that they will rise 5.3% within the next year.

8. Austin, Texas

Median rental per month: $1,695

Austin, TX is at the 8th position in the list of best places to invest in real estate in 2019. The Austin housing market has gained a lot of steam, with home values almost doubling since 2010. The Austin real estate market isn’t as big as Dallas, San Antonio or Houston.Austin is only the fourth largest city in the state. However, the Austin housing market is sizable – it is the eleventh largest city in the U.S. as of this writing, and it is the center of a large metro area.

Austin has come up as another tech hub in last 5 to 6 years. There are tons of high paying tech jobs moved to Austin in last couple of years. As Austin is a young city by many standards, Millennials will be the largest buying force in Austin 2019 and this trend should continue in 2020.

This is going to be more attractive for the areas being close to neighborhood amenities and close by shopping & hang out spots. Real estate industry experts think that there is a no bubble. Austin’s economy is strong, and varied. Overall there is a huge scarcity of homes for sale in Austin. It just hasn’t kept up with the pace of people moving here.

9. Las Vegas, Nevada

Median rental per month: $1,460

Las Vegas, NV is at the 9th position. Las Vegas has experienced several booms in its history. And it saw an incredible real estate bust during the Great Recession. Las Vegas’ recover hasn’t made the same headlines as the 50% or greater declines in home values did a decade ago. Yet its recovery shouldn’t keep investors away. For savvy investors, the Las Vegas real estate market is both stable and predictable. In 2018, the Las Vegas housing market was the hottest in the United States.

The Las Vegas real estate market is entirely brimming with new businesses. It’s friendly business environment is  propping up the economy and helping towards the positive Las Vegas real estate market trends for 2019. The new businesses are propping up at a much faster rate than the national average. Las Vegas home values reported the highest year-over-year gains in home values, totaling a 13 percent increase, according to the S&P’s Corelogic Case-Shiller Index in 2018 (the leading measure of U.S. home prices).

10. Boston, Massachusetts

Median rental per month: $2,895

Boston is at the 10th position in the list of best places to invest in rental real estate in 2019. Greater Boston is still an expensive place to buy a house, but the years of relentless price increase may be nearing an end. It’s too soon to know if this trend is a blip or is the Boston housing market heading towards some stability.

However, the new investors should always consider cheaper markets for investment. Because of the large number of students, college and university faculty, it is a no brainer for savvy investors to invest in a rental property in Boston. A rental property in Boston is guaranteed to get a lot of demand from tenants – whether an apartment or a condo or a single family home. In fact, any investment property is likely to get rented out fast.

Strong demand plus limited inventory and limited space to grow will guarantee appreciation of any property you buy in the Boston real estate market. While 2019 will see home prices across the country increase between 2% and 6%, Boston will be at the upper end of that range. This is only a continuation of the steady property increases seen since the 2008 property crash.

11. Chicago, Illinois

Median rental per month: $2,895

Chicago ranks 11th in the list of best places to invest in rental real estate in 2019. Chicago is the third largest metropolitan area in the U.S, almost three million in Chicago and another ten million in the surrounding metro area. Chicago has a large population, diverse economy, and a stable market. It is home to 32 Fortune 500 companies. It has high private sector employment. And due to a number of factors, Chicago Real Estate Market is one of the best rental real estate markets in the US.

Over 50% of the population rents. The large population of renters means that rental income for properties is far better than you’d see if you invested elsewhere in the country. Schaumberg reported slowing sales simply due to tight supply according due to data from the Chicago Association of Realtors; this drives many people forming new households or moving into the area to rent at whatever the market will bear.

12. Columbus, Ohio

Median rental per month: $1,075

Columbus ranks 12th in the list of best places to invest in rental real estate in 2019. is The average residential property in Columbus sells for $159,500. This means that the rental yield is high. Buyers should choose their neighborhoods carefully though as the $1,075 rental is not distributed evenly across the city.

Some neighborhoods remain economically depressed, and so will attract lower rental incomes and make poor investment choices.

13. Seattle, Washington

Median rental per month: $2,595

Seattle ranks 13th in the list of best cities to invest in real estate in 2019. Seattle offers strong economic prospects and a buoyant labor market. This means that rental occupancies are expected to remain high. The city’s population has grown consistently over the last few years with families drawn to the city’s lifestyle. The housing prices have doubled in the past five years, growing twice as fast as the national average since 2016.

Seattle’s tech landscape and real estate market are rapidly evolving. Google just upped the size of its new Seattle campus. Facebook has been on a hiring spree in the Seattle area, particularly for its virtual reality arm Oculus, which is growing fast in Microsoft’s backyard of Redmond.

GeekWire reported on new HQ leases for top Seattle startups Rover and Outreach. Other companies continue to grow and that will pick up any slack. Tech has blown up Seattle. For the past 5 years we have seen 50% price growth in this market which has priced out many middle class buyers.

Seattle has long been second to Silicon Valley, but its strong economy, diverse population, and better regulatory climate are bringing refugees from California and migrants from around the country and world to live here. Regardless of the area’s weather, the Seattle housing market’s outlook can only be described as sunny.

14. Denver, Colorado

Median rental per month: $2,100

Denver ranks 14th in the list of best places to invest in real estate in 2019. Rentals in this city have been gradually increasing over the years. This consistent growth has been driven by a buoyant economy creating jobs. Tourism is also high, driving strong returns in the holiday rental market.

Jobs are a major reason why people move to Denver in the first place. The area’s unemployment rate is less than 3%. In fact, Denver’s unemployment rate has been well below the national average for years. That explains why Denver is one of the top cities for in-migration, attracting people from all over the state as well as the country.

You don’t want to invest in the Denver housing market and end up losing money because the neighborhood is going downhill. Conversely, areas slated for redevelopment will almost certainly go up. And Denver has known and planned for areas of redevelopment. Downtown Denver saw multiple infill projects downtown ten years ago. Redevelopment is planned around Elitch Gardens today.

15. Lakeland, Florida

Median rental per month: $1,212

Lakeland, FL ranks 15th in the list of best places to invest in rental real estate in 2019. The Lakeland FL real estate market was ranked fifth among major metro areas in early 2018. In 2019, it moved into the number-one position in the Realtor.com ranking. According to Realtor.com, the home sales in the Lakeland, FL area would rise by 5% in 2019, while home prices would go up by 7.4%.

While the Lakeland FL real estate market is cheaper than Orlando and Tampa, it is not a good overall value given the lower average wages of its residents. That explains why U.S. News and World Report gave the city an index score of 5.5 out of ten. This is due to the average resident earning around $23,000 a year, several thousand less than the U.S. average. Median household incomes are no better.

The median household income in Lakeland, Florida is around $40,000, more than ten thousand dollars below the national average. This creates strong demand for Lakeland rental homes, especially those that low income residents can afford.

16. Ocala, Florida

Median rental per month: $1,100

Ocala, FL ranks 16th in the list of best places to invest in rental real estate in 2019. Ocala is home to around sixty thousand people, though the real Ocala housing marketincludes the broader metropolitan area that’s home to more than three hundred thousand people. Ocala is interesting for its population density given how rural the surrounding area is.

The Ocala real estate market is buoyed by several nearly recession proof industries. The large number of retirees here creates significant demand for medical professionals and caregivers. The horse-centered community offers a number of good paying jobs to trainers, veterinarians and animal caregivers. There are several manufacturers in the area such as mobile home manufacturers and an EMS vehicle maker.

This is why Ocala not only has a 4% unemployment rate but a much more stable job market than cities in Florida dependent on tourism. Another factor affecting the demand for Ocala rental properties is that half the people who live in the county commute to more expensive surrounding areas to work.

17. Durham, NC

Median rental per month: $1,450

Durham, NC ranks 17th in the list of best places to invest in rental real estate in 2019. The Durham housing market has made considerable improvements since the housing bubble burst. Only two years after the market crash in 2008, Durham was considered as one of the few favorable locations to invest in the real estate.

With a strong population growth and a solid economy, the rental demand in Durham, North Carolina is continuously increasing. Durham real estate typically performed stronger than the U.S. average due to the popularity of the Triangle area among new and out-of-state residents, as well as investors.

Rents in downtown Durham grew by 10% or more in 2016 and 2017, though an influx of new apartments in the area helped it cool down to the single digits. Rent for the average one bedroom apartment in Durham hit $1100 a month in January, 2019. This is a 7% increase over 2018 figures. Two bedroom apartments increased about 6% to $1350 a month. Single family homes, of course, rent for much more.

18. Birmingham, Alabama

Median rental per month: $850

Birmingham, AL ranks 18th in the list of best places to invest in rental real estate in 2019. The Birmingham AL real estate market continues to take steps in the right direction in 2019. Single family rental homes are the single most common housing type in Birmingham AL real estate, accounting for about 60% of the city’s housing units. Property appreciation rates are so strong in Birmingham real estate market that despite a nationwide downturn in the housing market, Birmingham AL real estate has continued to appreciate in value much faster than most other top performing real estate markets in the US.

There has been a distinct trend of people moving to the largest metropolitan area in the region in order to find the greatest opportunities. The Birmingham area is home to more than 1.2 million people. LendingTree ranked the Birmingham area as one of the least competitive real estate markets in the country. There were more potential buyers than sellers, forcing many would-be home owners to rent instead.

19. Raleigh, North Carolina

Median rental per month: $1,395

Raleigh ranks 19th in the list of best places to invest in rental real estate in 2019. The Raleigh metropolitan area – the city and its surrounding suburbs – account for about one and a half million people. Recent forecasts and predictions for the Raleigh housing market suggest that home prices will continue rising in 2019. To consider the prospects of investing in the Raleigh NC real estate market, we’ll focus on factors that matter to investors instead of citing the many high quality of life metrics and awards the city receives that draw new residents to the area.

About a third of Americans rent their homes. In the Raleigh NC real estate market, the rate is 43%. This is partially due to the large student market, but it is also fueled by young people moving here for work. That explains why downtown Raleigh rents grew 9% in 2018. It also explains why you can rent out a studio for $900 a month and one bedroom apartments for a thousand dollars a month.

20. Colorado Springs, Colorado

Median rental per month: $1,500

Colorado Springs ranks 20th in the list of best places to invest in rental real estate in 2019. Colorado Springs real estate has continued to appreciate in value faster than most of the markets in the US. Conditions in the Colorado Springs real estate market seem to be in a sustainable, upward direction and show no signs of slowing down. The single-family home market in Colorado Springs is stabilizing a little bit. Inventory is rising and prices are increasing at a slower pace. The local economy is strong and mortgage rates remain low.

The Colorado Springs real estate market is notable for how affordable it is compared to many other cities in the Rockies. The median home price is around $260,000, and the median rent is roughly a thousand a month. That is about 10% higher than the national average, but the average price of a home in Denver passed half a million dollars in 2018.

In short, you can buy two homes in Colorado Springs for the price of one in Denver. The double digit price gains in Denver will push people to Colorado Springs, as well, since relatively few earn the $90,000 a year income needed to afford the average Denver home.

Foreign Investment In US Real Estate 

Foreign individuals and corporations are free to purchase residential or commercial real estate in the United States. In 2013, foreign buyers made up about 7% ($92.2 billion) of transactions in the $1.2 trillion U.S. real estate market (Source: Wikipedia).

The annual survey of the Association of Foreign Investors in Real Estate ranked San Francisco, which had been one of the top five global cities since 2011, at 11th place, and Washington, D.C., at 25th from 15th place last year.  Furthermore the survey revealed that New York City is no longer the only No. 1 city in the US that appeals to foreign investors; that title is now shared with Los Angeles, which tied with New York in this latest survey.

5 Best Cities For Foreign Investment In United States Real Estate 2019

According to the latest survey of the Association of Foreign Investors in Real Estate (AFIRE), the United States was deemed the number one country for planned real estate investment in 2019 and the 5 best cities for foreign investment in United States real estate (CRE) are:

  • Los Angeles (tied with New York, #2 last year)
  • New York (tied with Los Angeles, #1 last year)
  • Seattle (#4 last year)
  • Washington, DC (#6 last year)
  • San Francisco (#5 last year)

With 58% of respondents’ votes, the US remains the country considered the most stable for real estate investment, and 86% said they plan to maintain or increase their investment in US real estate in 2019.

Residential Properties Purchased by Foreign Buyers in United States

According to a recent report by NAR, Chinese buyers have been the top foreign buyers of U.S. residential property for three straight years, hitting a record high.

The below data has been taken from the report published by NAR (National Association of Realtors).

2017 Profile of International Activity in US Residential Real Estate

  • Foreign buyers purchased $153.0 billion of residential property from April 2016—March 2017,
    an increase from $102.6 billion during the previous 12-month period (April 2015—March 2016).
    The dollar volume of foreign buyer purchases accounted for 10 percent of the dollar volume of
    existing home sales, an increase from the eight percent share during the previous period.
  • Foreign buyers purchased 284,455 residential properties, an increase from 214,885 during the
    previous 12-month period. The number of units purchased made up five percent of existing
    home sales, an increase from the four percent share during the previous period.
  • Foreign buyers who primarily reside outside the United States (non-resident foreign buyers)
    accounted for 42 percent of all foreign buyers, while recent immigrants and foreign buyers who
    reside in the United States on work, student, or other visas (resident foreign buyers) accounted
    for 58 percent. This composition is about the same as that of the previous 12-month period.
  • The average price of properties purchased by foreign buyers was $536,852, more than the
    average price of $277,733 of all U.S. existing home sales.3 The median price of properties
    purchased by foreign buyers was $302,290, also more than the median price of $235,792 of all
    U.S. existing home sales.4
  • China remained as the top origin of foreign buyers ($31.7B), followed by Canada ($19.0B), the
    United Kingdom ($9.5B), Mexico ($9.3B), and India ($7.8B). The bulk of buyers from China,
    India, and Mexico were resident buyers, while most buyers from Canada and the United
    Kingdom were non-resident buyers.
  • Although foreigners purchased property nationwide, five states accounted for 54 percent of total
    residential property purchases: Florida (22 percent), Texas (12 percent), California (12 percent),
    New Jersey (four percent), and Arizona (four percent).
  • Nearly half of foreign buyers purchased the property as a primary residence.
  • Most non-resident foreign buyers made an all-cash purchase (72 percent), while a smaller
    fraction of resident foreign buyers paid all-cash (35 percent).

For the new foreign real estate investors, it is important to know that in the United States, real estate listing information is shared by agents using multiple listing services and consumers can access that same information using real estate sites such as Zillow. Each state in the US has its own set of rules regarding the purchase of real estate, including the type of purchase contract used, the method of closing the sale and even the duties and titles of the individuals involved.

Make the most of your investment dollars in 2019 by investing in real estate. Our analysis of the 10 best cities to invest in real estate is based on trends in rental occupancy, income, and tenant default rates. We also examined the availability of houses to buy in each city.


References:

https://www.realtor.com/news/trends/20-hottest-markets-real-estate-u-s-february-2018
https://www.forbes.com/sites/samanthasharf/2018/01/03/housing-outlook-2018-six-predictions-from-the-experts/#4edb79e44066
https://www.cbre.us/research-and-reports/2018-U-S–Real-Estate-Market-Outlook
https://www.trulia.com/real_estate/San_Francisco-California
https://fortress.wa.gov/esd/employmentdata/reports-publications/regional-reports/county-profiles/spokane-county-profile
https://www.zillow.com/san-diego-ca                                                                                                http://www.afire.org


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