Best Places To Invest In Real Estate
We will look at some of the best places to invest in real estate in 2022 in this article. Real estate remains an appealing asset class for investors because of the opportunity to earn recurrent income from rentals. If market conditions are favorable, your monthly rental income can fully offset the costs of mortgage servicing. Interest rates remain low, so debt remains affordable. Record-low mortgage rates and a scarcity of available inventory kept the US housing market strong in terms of buyer demand in the past two years. The strong housing demand is still driving prices insane despite the higher mortgage rates in 2022.
The US housing market remains a hot seller's real estate market, with annual price growth reaching record highs and inventory continuing to fall. Because it's a seller's market, expect a bidding war if you're looking for a new house in 2022. If you are an investor, you must crunch the numbers to determine the best cities to invest in real estate in 2022. During the pandemic, prospective homebuyers around the United States are paying top dollar for homes, with remote employees and their desire for more lavish homes fueling the market.
And, while home values in the United States are expected to rise by only 2.9 percent in 2022, at a notably more moderate pace, buyers will continue to face a seller's market, according to Realtor.com. For as long as there is a lack of homes for sale, the balance of would-be owners unable to find affordable entry-level housing will be predisposed to transition into single-family rentals. That means rental demand will continue to increase in 2022.
Affordability challenges will keep prices from advancing at the same pace we saw in 2021 even as ongoing supply-demand dynamics mean prices continue to grow nationwide. Zillow’s home value forecast expects annual home value growth to begin a gradual cooldown late this spring. It forecasts 14.9% growth over the next 12 months.
Many regions of the country are experiencing huge booms in demand and the price of homes is rising sharply as a result — higher than the rate of inflation. That has made many homes unaffordable for their potential buyers. All these factors are influencing more and more people to choose to rent a home instead of buying one or to stay in their rental longer than they had originally hoped. This has resulted in favorable data in the single-family rental market, which is primed for investment opportunities in 2022.
According to the National Home Rental Council's market index, the single-family rental market remains robust as renters flock to the suburbs. If you can access credit, or otherwise have money to invest, consider real estate and purchase a single-family rental property. However, you must do thorough research to choose the best places to invest in real estate in 2022. All real estate is local so you much understand the local factors that can affect your investment in the future. Choosing single-family rental homes for investment is a great option. They provide an affordable and flexible option to meet the needs of families and individuals in search of quality housing.
“The single-family rental sector is having its moment,” according to Arbor's newly-released Q3 2020 Single-Family Rental Investment Trends Report. The pandemic boosted outward migration from big cities to suburbs, which further boosted the demand for single-family homes. Rent collections have remained stable, new demand has hit generational records and rents have seen upward pressure, according to the report.
That's good news for the future of single-family rental investors. Single-family rental starts totaled 40,000 units in the last 12 months. While down slightly from pre-pandemic levels, it shows the activity in the market. SFRs offer a 6% to 8% cap rate, much higher than a typical apartment investment. SFR cap rates ticked down to 6.5% in the third quarter of 2020, down 18 bps from the prior quarter. However, Arbor's report has a positive outlook on the sector for 2022.
It says that the asset class was the best positioned to grow through the pandemic. However, it also warned that landlords still have hurdles ahead in terms of rent collections and the ongoing pandemic that has hurt the economy. According to the Census Bureau, in the third quarter of 2020, single-family rentals had an average 95.3% occupancy rating, a 100 basis point increase from the first quarter of the year. This is the highest occupancy rate since 1994 for single-family rentals. The data reflects both rising user demand and landlords prioritizing tenant retention.
For comparable owner-occupied single-family housing units, occupancy rates sat at 99.1% in the third quarter — the second-highest reading on record, topped only by the immediately preceding quarter, measured at 99.2%. This demand could lead to a shortage of single-family rental homes. However, recently investors and developers have shown a renewed commitment to operating and developing these properties. Invitation Homes and Rockpoint Group recently formed a $1 billion joint venture to acquire and operate single-family rentals in the Western US, Southeast US, Florida, and Texas.
Through the joint venture, Invitation Homes will provide investment, asset management, and property management services. In addition, RangeWater just launched an $800 million platform to build and operate single-family rental communities in the sunbelt region. It shows that the interest of investors in single-family rental homes has risen to a great extent during this pandemic.
Large investors are gravitating toward it. As of now, institutional investors account for only 2 percent of the 90-million unit market, according to NHRC. This is meager as compared to the US multifamily sector, where more than 50 percent of ownership is held by institutional investors. Hence, the single-family rental market remains an emerging market for both individual and institutional investors.
How To Choose Best Places To Invest In Real Estate In The World?
You may be located anywhere in the world, but the basic principles of the 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.
Real estate investing requires in-depth research. Market timing also matters as some cities have exceptional rental income prospects, but a very tight inventory. In that scenario, it becomes very difficult to find and close a deal that fits your investment criteria. Therefore, you need to act fast and wisely.
Don't take any uninformed decision without evaluating the fundamentals of the real estate market you intend to purchase in – is it growing, stable, or declining? Are you planning for the short-term capital gains or the long-term buy and hold? To make it easy for you, we recommend contacting an investment counselor who can help you to invest in some of the best real estate markets in the United States.
Here Are the 21 Best Places to Invest in Real Estate in 2022 & 2023
If you're considering a real estate investment in the coming year, there are a few markets worth investigating further due to anticipated price increases. We looked at data and examined trends from across the US to bring you this list of the 21 best places to invest in real estate in 2022. Here are the best places to invest in real estate and buy rental properties. They all have their own set of qualities and disadvantages, but many of them are less expensive than the national average.
1. Boise, Idaho
Bosie stands at the 1st position for real estate investment. It has a record of being one of the best long-term real estate investments in the U.S. The supply and demand dynamics continue to drive home prices up in Boise. The Boise housing market was ranked as the #1 in the U.S., by Realtor.com’s metro level housing forecast for the year 2020. Their main criteria were based on the combined yearly percentage growth in both home sales (0.3%) and prices (8.1%) expected in 2020 among the top 100 largest markets in the country.
Home prices are soaring and breaking records despite the coronavirus pandemic. Persistently tight inventory in the entire Boise Metro Area housing market, coupled with historically low 30-year fixed mortgage rates are keeping the demand high, which in turn is pushing home prices up in this region. Housing prices in Boise have risen sharply as Ada County's median home sale price exceeds $500,000. The real estate appreciation rate in Boise in the latest quarter was around 4.53%, which equates to an annual appreciation rate of nearly 20%.
Top Reasons Why Boise is One of The Best Places to Invest in Real Estate
- Population and Job Growth Triple Than National Average.
- Strong population growth.
- Job growth is 2-3 times the national average.
- Low cost of doing business.
- Low unemployment rate at 3.5%.
- Forbes ranked #6 for most job growth.
- 1-year appreciation forecast of 15-20% (Boise Metro).
- Despite high appreciation, home values are expected to hold because demand for the market appears to be strong.
2. Houston, Texas
Houston is one of the all-time best places to invest in real estate. This city is the home of the US oil and gas industry and offers perennial employment opportunities. Greater Houston is Texas' fifth-largest metro region, with over 7 million residents, and its population continues to expand at a rate nearly double that of the rest of the country. It is home to 53 Fortune 1000 businesses, putting it in third place behind New York and Chicago as the most concentrated city.
These strong macroeconomic factors continue to 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 Reasons To Invest in Houston Real Estate.
Top Reasons Why Houston is One of The Best Cities to Invest in Real Estate
- Houston is the #1 Market in the US for Job Creation.
- Housing real estate is affordable.
- 4th largest city in the US.
- 5%-20% below the current fair market value.
- 12 Month ‘No Vacancy’ Guarantee.
- 12 Month Home Warranty.
- $75,000 average purchase price.
- Median rental per month: $1,550.
- 1-year appreciation forecast of 10-15% (Houston Metro).
- Its unemployment rate is far below the national level.
- It’s home to more Fortune 500 headquarters than anywhere in America except for New York.
- Massive international trade gives another big job boost to the rapidly growing city.
3. Dallas, Texas
Dallas is another good place to invest in real estate in 2022. The strong availability of housing stock and high rental rates relative to the house price make it an accessible market to invest in. 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 homeownership 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 it's expected that at least 20000 new homes in this area and Dallas a total of 50000 new single-family homes and 50000 apartments.
Top Reasons Why Dallas is One of The Best Places to Invest in Real Estate
- Population Expected to Double in Next 15 Years
- Dallas is one of the leaders in the U.S. for employment and population growth.
- 52.9% of Dallas rents vs. 33% nationally.
- Newly remodeled REOs (2004 or newer).
- Properties 5% – 15% below market value.
- 3-year appreciation forecast of 10-15%.
- Demand for housing has surged over the last year.
4. Las Vegas, Nevada
How can we miss Las Vegas on our list of best places to invest in real estate? Las Vegas has experienced several booms in its history. And it saw an incredible real estate bust during the Great Recession. Las Vegas’ recovery 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. Throughout 2019, the Las Vegas housing market was the hottest in the United States.
The Las Vegas real estate market is entirely brimming with new businesses. Its friendly business environment is propping up the economy and helping toward the positive Las Vegas real estate market trends for 2021. 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). Now is a great time to invest in Las Vegas rental properties.
Top Reasons Why Las Vegas is One of The Best Cities to Invest in Real Estate
- Las Vegas is the most populated city in the state of Nevada and the 28th-most populated city in the United States.
- The current metro area population of Las Vegas is 2,699,000, a 2.98% increase from 2019 – Macrotrends.net.
- The Las Vegas Valley as a whole serves as the leading financial, commercial, and cultural center for Nevada.
- A diversified economy is driven by health-related, high-tech, and other commercial interests.
- The primary drivers of the Las Vegas economy are tourism, gaming, and conventions, which in turn feed the retail and restaurant industries.
- Mining constitutes the mainstay of the region’s industrial sector.
- Most of the manufacturing plants are concentrated in the communities of Henderson and North Las Vegas.
- No state tax for individuals or corporations, as well as a lack of other forms of business-related taxes, have aided economic growth.
- Construction is also a significant component of the economy.
- The government is the metropolitan area’s single largest employer.
- The low unemployment rate of 3.5% as of Dec 2019 – U.S. Bureau of Labor Statistics.
- Rising rents.
- The average rental income from an apartment in Las Vegas is $1,107, a 5% increase compared to the previous year.
- The average condo or townhome costs nearly 200,000 dollars, and their prices increased 11 percent.
- Currently, Las Vegas is a sizzling seller's real estate market in the United States.
5. Atlanta, Georgia
Atlanta, GA is also one of the best places to invest in real estate. Atlanta offers attractive buying prospects for savvy rental property investors. 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 hotspot for any type of real estate investment. Atlanta 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 one of the 10 most productive states that contribute to the 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.
Top Reasons Why Atlanta is One of The Best Places to Invest in Real Estate
- Atlanta is one of the Top Rental Markets in the U.S.
- Newly rehabbed properties with tenants.
- Properties start at $70,000.
- Median rental per month: $1,500.
- Up to $750/mo in cash flow.
- 500 people move to Atlanta every day!
- 2 million more people are expected by 2030.
- 1-year appreciation forecast of 10-15% (
- Atlanta has a growing economy that is 8th in the nation for GDP and is home to a wide variety of businesses that includes Fortune 500 companies.
- The relocation of payment processing giant NCR is expected to bring more than 3,500 jobs to the metro Atlanta region.
6. Orlando, Florida
Orlando, FL 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 the 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 a better economy for the city.
Top Reasons Why Orlando is One of The Best Places to Invest in Real Estate
- Orlando is the fourth-largest city in Florida and the state's largest inland city.
- It is the center of the Orlando metropolitan area, with a population of about 2.5 million.
- Third-largest metropolitan area in Florida.
- Ranked #2 In America’s Fastest-Growing Cities – Forbes.
- Orlando's real estate has been one of the best long-term investments throughout the last decade.
- It has appreciated by 43.67% over the last 10 years.
- The median home value is around $260,000.
- Strong renter’s market.
- Median rental per month: $1,599.
- Over 60% of the population rents.
- Strong economic and job growth.
- Orlando is a major industrial and hi-tech center employing thousands of people.
- The low unemployment rate of 2.5% in Dec 2019 – U.S. Bureau of labor statistics.
- Currently, Orlando is a sizzling hot seller's real estate market in the United States.
7. Tampa, Florida
Tampa, FL is also on the list of best places to invest in real estate in 2022. 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 several economic and development prospects attached to this market and Tampa was described as one of the hottest real estate markets in the US in the past year. There’s a tremendous amount of pent-up demand for entry-level single-family homes in Tampa. The median home value is $251,287 (on Zillow).
The Tampa housing market is growing steadily, prices are still low and properties have a good chance for a strong appreciation in the coming years. Home values have gone up 5.3% over the past year. There is less than 2-month of the available inventory in the entire Tampa metro area – down almost 21.4% over last year. This is one of the key factors in rising home prices. The benchmark for a balanced market (favoring neither buyer nor seller) is 5.5 months of inventory. Anything lower than 5.5 months of inventory is traditionally a sellers’ real estate market.
Top Reasons Why Tampa is One of The Best Places to Invest in Real Estate
- The prices of residential properties in Tampa are growing at a fast pace.
- Affordable Real Estate.
- Median Home Price in Tampa is around $250,000.
- Median Rent is $1,600.
- Currently, Tampa is a red-hot seller's real estate market in the United States.
- Tampa, Florida’s cost of living is 5% lower than the national average.
- Investors can buy properties at lower rates right now and rent them out to new residents of the city to improve their cash flows.
- Tampa has the headquarters of four Fortune 500 companies which makes it a moderately attractive city for work and economic growth.
- The influx of people into Tampa is especially occasioned by the fact that it is one of the fastest-growing job hubs in the country.
- The healthcare, education, and transportation facilities in Tampa are also impeccable.
8. Spokane, Washington
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 around $265,000 that offers fantastic mortgage coverage. Data from Zillow shows that Spokane’s housing market is hotter than Seattle’s for the first time in six years. Spokane homes are selling faster than Seattle homes. For renters in Spokane, the good areas are mostly on the north side (north of Garland street). Perry District is growing faster than many other parts of Spokane. Spokane Valley and Liberty Lake are also desirable neighborhoods and are growing rapidly.
One reason to invest in Spokane real estate now instead of waiting is that prices are appreciating so fast. For example, home values increased by more than 13% in 2019. 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 ten years, with the annual appreciation rate averaging 0.23% during the period.
Top Reasons Why Spokane is One of The Best Cities to Invest in Real Estate
- It is the economic and cultural center of the Spokane metropolitan area.
- The second second-largest city in Washington by population.
- It is a beautiful city to live in.
- Spokane has a system of over 87 parks and includes six neighborhood aquatic centers.
- It has several trendy, walkable, and revitalized neighborhoods with good walkability and local shops.
- Spokane's diversified economy includes mining, forestry, agribusiness, high-tech, and biotech sectors.
- Affordable real estate.
- Buyers are giving up on pricey markets like Seattle and Portland and heading to Spokane where the median listing price is $220,000.
- Rising Rents in Spokane.
- Median rental per month: $1,295.
- Owners of both single-family homes and rental property are seeing good returns.
- It is fast becoming a popular choice for homebuyers looking for a nice & attractive place to live.
- Currently, Spokane is a red-hot seller's real estate market in the United States.
9. Chicago, Illinois
Chicago is also on our list of the best places to invest in real estate. Chicago is the third-largest metropolitan area in the U.S, with almost three million in Chicago and another ten million in the surrounding metro area. Chicago has a large population, a diverse economy, and a stable market. It is home to 32 Fortune 500 companies. It has high private sector employment. And due to several factors, Chicago is one of the best real estate markets for investing in rental properties for sale. Over 50% of the population rents.
The large population of renters means that rental income from a Chicago investment property is far better than you’d see if you invested elsewhere in the country. The average rent for a one-bedroom apartment is roughly a thousand dollars. Two-bedroom apartments in Chicago cost an average of 1300 dollars a month. Rental rates for Chicago rental properties are appreciating more slowly than average, increasing at 0.9 percent a year. This is one-third less than the 1.5 percent rental rate increase in 2019 for the country as a whole. The average house in Chicago sits on the market for 50 to 55 days. However, hot homes can sell in just two weeks.
Top Reasons Why Chicago is One of The Best Places to Invest in Real Estate
- Chicago was ranked first in the 2018 Time Out City Life Index (Time Out Group).
- Strong Rental Market – Over 50% of the population rents.
- Fully renovated single-family homes with great ROI.
- Solid blue-collar areas with high rents.
- High private sector employment.
- On the UBS list of the world’s richest cities.
- Often rated as having the most balanced economy in the United States.
- Ranked seventh in the entire world in the 2017 Global Cities Index.
- Home to 12 Fortune Global 500 companies and 17 Financial Times 500 companies.
- Strong economic and job growth.
- Affordable Real Estate.
- Rising rent prices.
- The median rent per month is $1,761.
- 2% increase in Chicago’s government employment between November 2018 to November 2019 (Bls.gov).
10. Austin, Texas
Austin, TX is also on our list of best places to invest in real estate. 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 the last 5 to 6 years.
There are tons of high-paying tech jobs moved to Austin in the last couple of years. As Austin is a young city by many standards, Millennials will be the largest buying force in Austin in 2021, and this trend should continue in the coming years. 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 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.
Top Reasons Why Austin is One of The Best Cities to Invest in Real Estate
- Austin has a strong economy.
- The low unemployment rate of 2.7%.
- Growing population.
- It is the 11th most populated city in the U.S. and the 4th most populated in Texas.
- Affordable Real Estate.
- Rising rents.
- The median rent per month is $1,750.
- Currently, Austin is a red-hot seller's real estate market in the United States.
- You can get investment properties in the price range of $200,000 to $250,000.
- Austin has a record of being one of the best long-term real estate investments in the U.S. over the past 10 years.
- Last December, the median home price increased 8% year-over-year to $405,093.
- The Austin real estate appreciation rate in the last quarter was around 1.7%, which amounts to an annual rate of 6.8%.
11. Columbus, Ohio
Columbus is also on the list of the best places to invest in real estate. The residential property in Columbus sells for a median price of $174,109. This means that the rental yield is high. The cost of buying a home is well within the reach of an average household income. The Columbus Ohio housing market is seeing steady growth due to slow population growth. Between 2013 and 2018, property values have increased. In the past year, they increased a whopping 8.4%. There is a great demand for older, renovated homes in established, walkable neighborhoods. The limited supply of family-friendly homes in these areas is driving up their prices.
Buyers should choose their neighborhoods carefully though as the $1,250 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. You can find great deals in neighborhoods like Franklinton, Near East Side, Olde Towne East, Downtown Columbus, Italian Village, Upper Arlington, North Linden, and Grandview Heights.
Top Reasons Why Columbus is One of The Best Cities to Invest in Real Estate
- Currently, Columbus is a red-hot seller's real estate market in the United States.
- Very affordable real estate.
- The median price in Columbus is $174,109.
- Large rental market.
- The median rent is $1,250, which is lower than the Columbus Metro median of $1,300.
- Ohio is landlord-friendly, so that's good for owning a rental property.
- Columbus, Ohio is considered a “Rust Belt” city that’s unique for a rebound.
- It enjoys unemployment rates of around 4%, but this is phenomenal compared to the surrounding area.
- The lower cost of living attracts residents who earn just as much here as in Chicago but don’t have to pay as much for things.
- The sheer variety of colleges in the area means that investors can rent to the large population of students in Columbus without worrying about their property values rising and falling based on the popularity of a flagship school.
12. Lakeland, Florida
Lakeland, FL also enters the list of the best places to invest in real estate in 2022. The Lakeland FL real estate market was ranked fifth among major metro areas in early 2018. In the past year, it moved into the number-one position in the Realtor.com ranking. 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 a strong demand for Lakeland rental homes, especially those that low-income residents can afford.
Top Reasons Why Lakeland is One of The Places to Invest in Real Estate
- Lakeland is a principal city of the Lakeland–Winter Haven Metropolitan Statistical Area.
- It is the largest city on Interstate 4 between Orlando and Tampa.
- Lakeland is a transportation hub.
- In the past few decades, tourism, medicine, insurance, transportation, and music have grown in importance.
- More than 22,000 people moved to the Lakeland-Winter Haven metropolitan area from July 1, 2017, to July 1, 2018, according to the U.S. Census Bureau.
- The 3.2% annual population increase earned it the fourth spot on U.S. Census's Top 10 Metropolitan Areas in Percentage Growth list.
- Affordable Real Estate.
- Single-family detached homes are the single most common housing type in Lakeland.
- Studio apartments are the smallest and most affordable for rental rates.
- With a median house value of $155,796, house prices in Lakeland are solidly below the national average.
- Lakeland's appreciation rates in the latest quarter were at 1.45%, which equates to an annual appreciation rate of 5.94% (Neighborhoodscout.com).
- The average rent for an apartment in Lakeland is $1,084, a 4% increase compared to the previous year (RENTCafe).
- Currently, Lakeland is a red-hot seller's real estate market in the United States.
13. Ocala, Florida
Ocala, FL finds itself on the list of the best places to invest in real estate in 2022. Ocala is home to around sixty thousand people, though the real Ocala housing market includes 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. A large number of retirees here creates significant demand for medical professionals and caregivers.
The horse-centered community offers several good-paying jobs to trainers, veterinarians, and animal caregivers. There are several manufacturers in the area such as mobile home manufacturers and EMS vehicle makers. 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.
Top Reasons Why Ocala is One of The Best Cities to Invest in Real Estate
- As of the 2019 census, Ocala's population, estimated by the United States Census Bureau, was 60,786, making it the 49th most populated city in Florida.
- It is the principal city of the Ocala, Florida Metropolitan Statistical Area.
- In the last decade of the twentieth century, the greater Ocala area had one of the highest growth rates in the country for a city of its size.
- The median household income is around $37,442.
- Ocala is also a great city to live in for families. The median age is about 38.7.
- When you buy real estate in Ocala you are investing in an area that is situated between three huge cosmopolitan centers, namely Tampa, Orlando, and Jacksonville.
- With a median house value of $162,607, house prices in Ocala are solidly below the national average.
- The average annual real estate appreciation rate over the past decade has been around 2.28%.
- The average rent for an apartment in Ocala is $1,071, a 4% increase compared to the previous year when the average rent was $1,032 (RENTCafe).
- Currently, Ocala is a red-hot seller's real estate market in the United States.
14. Birmingham, Alabama
Birmingham, AL also ranks in our list of the best places to invest in rental real estate in 2022. The Birmingham AL real estate market continues to take steps in the right direction. 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 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 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 homeowners to rent instead.
Top Reasons Why Birmingham is One of The Best Places to Invest in Real Estate
- With an estimated 2019 population of 209,403, it is the most populous city in Alabama.
- Birmingham is the seat of Jefferson County, Alabama's most populous and fifth-largest county.
- The Birmingham-Hoover Metropolitan Statistical Area is the most populous in Alabama.
- Being home to several colleges and universities, Birmingham has a large pool of student renters.
- Strong and diversified economy.
- Birmingham is a leading banking center and a powerhouse of construction and engineering companies.
- Very affordable real estate.
- With a median home price of $64,840, house prices in Birmingham are solidly below the national average.
- The average rent for an apartment in Birmingham is $968, a 3% increase compared to the previous year (RENTCafe).
- Currently, Birmingham is a red-hot seller's real estate market in the United States.
15. Durham, North Carolina
Durham, NC is also one of the best places to invest in rental real estate in 2022. 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 real estate. With 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 by about 6% to $1350 a month. Single-family homes, of course, rent for much more.
Top Reasons Why Durham is One of The Best Cities to Invest in Real Estate
- Durham is one of the best places to live in North Carolina.
- It offers residents a dense suburban feel and most residents (about 52%) rent their homes.
- With a median home price of $256,993, Durham real estate prices are well above average cost compared to national prices.
- The U.S. Census Bureau estimated the city's population to be 278,993 as of July 1, 2019, making it the 4th-most populous city in North Carolina,
- Also, the 79th-most populous city in the United States.
- Durham is also a national leader in health-related activities, which are focused on Duke University Hospital and many private companies.
- Duke University and Duke University Health System are also Durham's largest employers
- Being home to several colleges, universities & research centers, Durham has a large pool of student renters.
- The median household income is $54,284 and per capita income is $32,305.
- The average rent for an apartment in Durham is $1,181, a 3% increase compared to the previous year (RENTCafe).
- Durham has a track record of being one of the best long-term real estate investments.
- Average annual home appreciation rate of 4.03%.
- Currently, Durham is a seller's real estate market in the United States.
16. Charlotte, North Carolina
Charlotte is also one of the best places to invest in rental real estate in 2022. The Charlotte metropolitan area or Metrolina has experienced rapid population and job expansion. One reason for this is the city's business-friendly environment. The homebuyers in the Charlotte area have dealt with a persistent seller’s market, which has shrunk inventory and driven up home prices.
Last year was the fifth consecutive year of home price gains in the Charlotte real estate market. However, record-low unemployment and low-interest rates have led the buyers to still find a home in this region. Until March 2020 the real estate sales were going steady in the entire Charlotte Metropolitan Statistical Area. 3,630 homes were sold in March, which is a year-over-year increase of 4.9%.
As you can see the Charlotte real estate market isn’t cooling off as yet. Charlotte is a hot market for investors whether they want to renovate and flip, buy to hold and rent or invest in multi-family properties. Charlotte’s real estate appreciation rate in the latest quarter was around 0.52% which equates to an annual appreciation rate of 2.10%. You can choose to market your home to potential buyers. Any homeowner looking to cash out and sell off their property should do it in the current phase. It is better to avoid the price decline phase that will accompany the coming correction.
Top Reasons Why Charlotte is One of The Best Places to Invest in Real Estate
- Affordable real estate.
- The median home price is $252,438.
- Charlotte's home values have gone up 5.3% over the past year.
- Charlotte's appreciation rates in the latest quarter were at 0.52%, which equates to an annual appreciation rate of 2.10%.
- The average rent for an apartment in Charlotte is $1,259, a 6% increase compared to the previous year.
- The Median household income of a Charlotte resident is $53,274 a year.
- It is one of the best places to live in North Carolina.
- Ranked one of the best places to live in the United States for 2019, according to U.S. News & World Report.
- The Queen City is 34th in the best places to retire.
- It offers residents an urban-suburban mix feel and most residents own their homes.
- The city has a mixture of owners and renters, with 52.07% owning and 47.93% renting.
- The city is the cultural, economic, and transportation center of the Charlotte metropolitan area, whose population ranks 23rd in the U.S.
- Charlotte has become a major U.S. financial center with the second-most banking assets after New York City.
- Between 2018 and 2019, Charlotte saw a 2.3 percent increase in jobs.
- Currently, Charlotte is a seller's real estate market in the United States.
17. Colorado Springs, Colorado
Colorado Springs is also on the list of the best places to invest in rental real estate in 2022. Colorado Springs real estate has continued to appreciate 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 $320,000, and the median rent is roughly $1,600 a month. 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 very few earn $90,000 a year, which is the income needed to afford the average Denver home.
Top Reasons Why Colorado Springs is One of The Best Cities to Invest in Real Estate
- The median home price is $323,194.
- Home values have gone up by 7.6% over the past year.
- Currently, it is a red-hot seller's real estate market in the United States.
- Single-family detached homes are the single most common housing type in Colorado Springs.
- Colorado Springs's appreciation rates in the latest quarter were at 1.18%, which amounts to an annual appreciation rate of 4.80%.
- The average rent for an apartment in Colorado Springs is $1,191, a 6% increase compared to the previous year.
- The Median household income of a Colorado Springs resident is $54,228 a year.
- Colorado Springs had a 5.5-percent gain in nonfarm jobs between December 2017 and December 2018, which ranked fourth out of 388 metros, according to a survey from the U.S. Bureau of Labor Statistics.
- It was ranked as the fifth-best city in the United States to find a job in 2019, according to a survey released by Wallethub.com.
- In 2018, U.S. News & World Report ranked Colorado Springs and the most desirable place to live in the U.S.
- Currently, Colorado Springs is a sizzling hot seller's real estate market in the United States.
18. Denver, Colorado
Denver also makes the list of the best places to invest in real estate in 2022. 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%. 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 investment properties 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.
Top Reasons Why Denver is One of The Best Places to Invest in Real Estate
- Growing population – It is the 19th-most populous city in the nation.
- The current metro area population of Denver in 2020 is 2,827,000, a 1.33% increase from 2019 – Macrotrends.net.
- Ranked as a Beta world city by the Globalization and World Cities Research Network.
- In 2016, Denver has named the best place to live in the United States by U.S. News & World Report.
- Denver is in the top 10% nationally for real estate appreciation.
- 3.8% 1-yr forecast till Feb 2021.
- The average number of days on market is 83.
- Colorado has had the lowest rate of mortgage delinquencies in any state.
- A third of the Denver metro area rents.
- Denver South is home to 7 Fortune 500 companies.
- Denver was named 6th on Forbes Magazine’s “Best Places for Business and Careers.”
- A low unemployment rate of 2.3% as of Dec 2019 – U.S. BLS.
- The average rent for an apartment in Denver is $1,674, a 3% increase compared to the previous year.
19. Raleigh, North Carolina
Raleigh is also on the list of best places to invest in rental real estate in 2022. 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 2021. 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.
Top Reasons Why Raleigh is One of The Best Cities to Invest in Real Estate
- Raleigh is considered one of the best cities to live and work in the US.
- The median home price is $290,270.
- Raleigh home values have gone up by 2.9% over the past year.
- Currently, it is a seller's real estate market in the United States.
- Single-family detached homes are the single most common housing type in Raleigh.
- Raleigh's appreciation rates in the latest quarter were at 1.31%, which amounts to an annual appreciation rate of 5.34%.
- The average rent for an apartment in Raleigh is $1,238, a 6% increase compared to the previous year.
- Between 2017 and 2018 the population of Raleigh, NC grew by 1.19% and its median household income grew from $64,660 to $65,695, a 1.6% increase.
- The Raleigh, North Carolina area is the highly-rated area in the country for information and technology job opportunities. It is second to Austin, Texas, which ranks #1.
- Raleigh & Durham have lower unemployment rates than the national average and the region's annual average income is above the national average.
20. Phoenix, Arizona
Phoenix is also on the list of best places to invest in rental real estate in 2022. It is becoming a top destination for people living in high-cost areas like Los Angeles & Seattle. The Greater Phoenix area was also predicted to be among the top housing markets in the year 2020. Phoenix's housing market started so strong in 2020 that only something as drastic as the ongoing pandemic could have impeded the real estate sector. The year started with an extreme shortage of houses for sale, and an increasing number of sales over the asking price of property owners.
In January, many experts expected moderate growth and moderate price appreciation in 2020. In March, Metro Phoenix’s median home price hit a record of $302,500. The median sales price in Maricopa County for Q1-2020 was $309,990, up by + 12.7% from last year. Even in the times of the Covid-19 pandemic, the sales prices in the Phoenix housing market are not declining. The favorable living conditions have, furthermore, comforted real estate investors and buyers to invest in Arizona real estate market.
Top Reasons Why Phoenix is One of The Best Places to Invest in Real Estate
- There are several other reasons to consider investing in Phoenix real estate.
- Affordable real estate.
- The median home price is $269,175.
- Phoenix home values have gone up 8.0% over the past year.
- Currently, it is a red-hot seller's real estate market in the United States.
- Phoenix's housing market has been one of the highest appreciating communities not only in Arizona but in the nation as well.
- Its more reasonably priced housing, lower cost of living, available workforce, and stable climate forecast a growing economy and stronger housing growth.
- Prices are up 17.8% since two years ago and 145% since prices bottomed out in May 2011.
- The national economy is super strong and the number of people moving into Phoenix is finally strong again after tanking during the Great Recession.
21. Seattle, Washington
Seattle too makes our list of one of the best places to invest in real estate for those who can afford it. 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.
Top Reasons Why Seattle is One of The Best Places to Invest in Real Estate
- Ranked as 10th in the nation in overall prospects of the “Emerging Trends in Real Estate 2020” – By Urban Land Institute.
- They describe Seattle's real estate as “in expansionary mode” and the report was jointly produced with PwC consultants.
- According to Mashvisor, the decreasing home values in Seattle demonstrate the real estate market is restoring balance and returning to a healthy state.
- The average rent for an apartment in Seattle is $2,169, a 6% increase compared to the previous year – RENTCafe.
- 176,400 or 54% of the households in Seattle, WA are renter-occupied while 147,046 or 45% are owner-occupied.
- According to many experts, Seattle remains one of the top places to invest in real estate.
- It may be very expensive, but Seattle's demographics & economy make sure that it remains a profitable and popular real estate market in the nation.
- More people move to Seattle each year.
- The U.S. Census places Seattle fourth for growth among the 50 biggest U.S. cities.
- Seattle is a great city for families to start and grow, with a lot of quality public schools and lush green scenery.
- It has a diverse mix of neighborhoods to choose from – from tree-lined streets to urban condos and townhomes.
- Seattle's one of the greenest cities in the U.S.
Now that you know where to invest in real estate, it's time to figure out how to do it properly. One of the best investments you can make is in income-producing rental properties, but only if you know what you're doing. We can help you succeed by avoiding risk and boosting profit by researching top real estate growth markets.
Contact us if you're seeking the best real estate investment opportunities in 2021. We are a provider of turnkey real estate – with properties as far south as Florida to as far north as Michigan. Here is a link to some of the best real estate markets where we have investment properties for sale.
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 is tied with New York in this latest survey.
5 Best Cities For Foreign Investment In United States Real Estate
According to an old 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 and the 5 best cities for foreign investment in United States real estate (CRE) are:
- Los Angeles (tied with New York)
- New York (tied with Los Angeles)
- Washington, DC
- San Francisco
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.
Residential Properties Purchased by Foreign Buyers in the United States
According to a report published in 2017 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).
- 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 the 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 2021 by investing in real estate. Our analysis of the 20 best cities to invest in real estate was based on the most recent housing market trends, rate of appreciation, rent prices, job growth, economy dependencies, quality of life, etc. Please note that real estate prices are deeply cyclical because their demand side is impacted by economic cycles. Much of it is dependent on factors you can’t control. A recent example is COVID-19 which has impacted our economy. Therefore, many variables can potentially impact the value of real estate and some of these variables are impossible to predict in advance.