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21 Best Cities to Invest in Real Estate 2022 | Norada

May 9, 2022 by Marco Santarelli

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

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 8^th 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)
Seattle
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 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 the real estate and some of these variables are impossible to predict in advance.

References:

https://www.zillow.com
http://www.afire.org
https://www.neighborhoodscout.com
https://www.rentcafe.com
https://en.wikipedia.org
https://fortress.wa.gov/esd/employmentdata/reports-publications/regional-reports/county-profiles/spokane-county-profile

Single Family Rental Homes vs Multi-Family Investing in 2022

February 22, 2022 by Marco Santarelli

A single family home is a standalone property on its own lot. Investing in a single family home is basically investing in a house or a condo to rent it to a single tenant. One of the simplest definitions of single family rental property investing is getting paid for what you own, rather than just paying to own it. It has a few pros and cons attached to it but it depends on your expectations from the property.

Usually, people tend to buy a property in a low-budget or affordable locality and revamp it to attract new tenants. Investing in single family rental homes gives the investors the liberty to determine their profits in many ways. Some of the advantages of buying single family rental properties are huge tax write-offs, a passive rental income, and a long-term capital appreciation of properties.

Single-family rental homes are easy to buy and hold for new real estate investors. Investing in them can deliver immediate returns, plus the long-term appreciation of the asset. It is a great way to save for your retirement as this type of real estate investment becomes a good source of regular passive income. The discrepancy between the number of renters and landlords in the United States is increasing every day.

Investors find real estate investing viable for many reasons. Unlike stocks, real estate is a tangible asset. Investors choose real estate because they can touch and feel the asset, and also watch it appreciate over time. They see single family rental homes as a way to improve monthly cash flow and diversify their investments.

Single-Family Homes vs. Multi-Family Properties: Which Investment is Better?

Single-Family Homes vs Multi-Family Properties

Both single and multi-family rental homes are good investments. They definitely lead to a positive cash flow, but there are differences between both investments. Single-family rental homes are affordable and have higher appreciation. You can get suitable tenants and maximum exit strategies with single family rental property investment.

On the other hand, multi-family rental properties give you high rent, maximum vacancies, and rent depends on the landlord as it is not subject to economic factors. So let’s begin by talking about the advantages of investing in multifamily properties.

Single-Family vs. Multi-Family: The Scalability Factor

The first thing that investors think about when it comes to multi-unit or multi-family properties, those that are five units and above, which could be 50, 500, or more, is that you can scale faster. And there is some truth to that. And this is the big thing that Grant Cardone talks about. I know Grant he’s been on my show. I’ve been on his ask the pros show a couple of years ago.

You know, the whole thing about scaling faster is that you can complete one transaction and end up with, let’s say 20, 30, 50 units in one purchase under one roof typically, but it could be multiple properties. But the idea is that you have fewer closing costs. Although the closing costs are significantly higher and a little more complex when you’re purchasing multi-unit properties or multi-family properties of that scale.

You’re definitely going to be paying a lot more in terms of the appraisals, the inspections, the complexities of it, etc, but it’s still one transaction. And so if you’re getting one loan for that purchase, you essentially have fewer total transactions. So there’s some simplicity in that, but there’s greater complexity in the purchase or the transaction itself, but you can scale faster.

Now, this is assuming everything else is equal, meaning that you are starting with the same investment capital that could be, you know, 200, 500,000, a million dollars as your down payment versus using that same amount of capital to purchase single-family homes or duplexes or fourplexes, but something in the residential space.

So with the same amount of investment capital, it’s fewer transactions, but in terms of the number of units, you can do it either way, but that is the general argument. And sometimes the number one advantage of going the multifamily route over single families or duplexes and fourplexes is that you can scale quickly. And so there is truth in that, just understand that it’s not what you are hearing at face value, meaning that you can scale faster period, full stop.

End of story. It’s not exactly like that. You have to understand the other complexities and dynamics that are involved with the purchase of a multi-family property. And also realize that the lending side of this is a little bit different. They’re going to take a much closer look at you, but they’re certainly going to scrutinize the property.

That's because they’re typically qualifying the property just as much, if not more than you personally. After all, they’re looking at the property as a business and they want to make sure that the revenue or the cash flow from that property is more than enough. A higher enough metric that it can service the debt, something they call DSCR or debt service coverage ratio, which is often about 1:2. So that’s the first thing you can scale quickly.

Economies of Scale With Multi-Family Properties

The second benefit of the multi-family property has to do with economics, which economists or professional investors refer to as economies of scale. So when you have more units or more apartments under one roof, you are essentially sharing in the cost of upgrades to the common areas or the mechanicals such as the boiler hot water tank or roof.

And that cost is spread across all, whatever 20 units, 30, 50 units in that building. So it might be a very expensive repair, a 20, $30,000 roof repair, but you’re dividing that 20 or $30,000 roof repair amongst, let’s say 20 units in the building. So you have the economies of scale. You have mechanicals and items that are shared as common or common areas amongst all the residents and the units in the building. So that reduces the overall cost on a per-unit basis.

That doesn’t necessarily mean it’s cheaper than the equivalent repair in a single family home. It actually could be a lot more expensive, but the thought there is that it probably will last longer as well, being in a commercial building. Although that's not always true, what you often have are one item, one repair, one location, maintenance issues, and inspections are all done at that same place.

People are not being dispatched to different locations because you have different properties in different locations around a market. Property management may be completely localized. You may have an onsite property manager. If the building is large enough, usually that’s, you know, 50 to a hundred units.

And above is when you start to have resident managers. If you have a property management company and they’re looking after, let’s say 20 units at a building versus 20 single-family homes or duplexes peppered around the city, it adds some simplicity, but I would argue that it doesn’t matter. At the end of the day, if you’re working with a property management company that’s managing multiple properties in different locations within a market, that’s what they’re doing for many clients, that’s just built into their business model.

And that’s part of what they do, where there is saving with apartment complexes. And multi-family units are often in the management fees with multi-family properties. It’s not uncommon to have management fees in the 4 or 5, 6, 7% range of that monthly gross rental income that’s collected. Whereas with single-family residences, the street rate, as I say in air quotes is 10%.

But the reality is, is that often, and especially with the property management companies that we work with, uh, in many markets and often that rate is often 8%, sometimes nine and even sometimes 7%. So I don’t know what the average is, but I would guess that the average is probably around 8% as far as the management fee. And especially if you have more than one property with a property management company. So that’s also a negotiable item.

So keep that in mind, but there is a saving because of, again, the economies of scale with multi-family properties, especially as they become much larger, meaning a hundred units and above, it’s not uncommon to have a management fee of around four or 5% on the low end 6, 7% on the higher end. And you know, that doesn’t mean a lot if you have a small number of units, but it does add up if you are talking about large-scale properties.

Higher Monthly Cash-Flows in Multi-Family vs Single-Family Homes

Another advantage of multifamily properties has to do with supposedly higher monthly cash flows. Again, this is an arguable point because it assumes that all else is equal, but it doesn’t necessarily mean that you have higher cash flow. The basis of this argument by a lot of investors is that if you have, let’s say hypothetically, a 10 unit apartment complex, and you have two vacancies, you’re essentially 20% vacant or 80% occupied. However, you want to look at it.

So if you have a vacancy, you don’t have essentially a hundred percent vacancy in that property compared to a single family home where you’re a hundred percent vacant. Well, that is true, but that’s also an unfair comparison. And I see this and I hear this all the time. What they fail to do is compare your portfolio, not just the property. Sure. If I have a single-family property, it’s one property compared to a 10 unit apartment complex, which is still one property.

If I have one vacancy in each of them, it’s the difference between a hundred percent vacant with a single-family home versus being 10% vacant on the 10 unit apartment complex. Those are true statements, but it’s really not taking the true situation into account because I may have 10 single-family homes in that market versus having one 10 unit apartment complex in that market.

And if I have one vacancy with the apartment complex and one vacancy in my portfolio of 10 single family homes, I have the same thing. I have one vacancy, one unit is empty on both ends. So I really have the same overall occupancy of 90%. So I think this is where people are not being completely truthful in the comparison between multifamily and single-family. So a vacancy is a vacancy and it doesn’t matter where it happens. You have to look at what is my total portfolio size, and then you can make a fair comparison.

Return on Investment in Single-Family Homes vs Multi-Family

Another thing to keep in mind is that the ROI, the return on investment on multi-family properties typically, and especially today, and has been this way for the last several years is actually not as attractive. In fact, it’s usually lower with multi-family properties than single-family homes. And one of the main reasons for that is that capitalization rates on multi-family properties have been compressed over the years.

They’re hard to find very few people are selling them and the people who are wanting to buy them are chasing after them with a lot of competition. And because of that, it’s driving the prices up pretty much across the board, all around the country. So multi-family properties have become more and more expensive because of the high and growing demand that a lot of apartment buyers and syndicators are chasing after. That’s also somewhat true with single-family homes, but more so with multi-family properties.

And the fact is, is there’s just far fewer of them. So as you get larger and scale larger, the number of units in the property, the fewer and fewer and fewer there are of them. So your monthly net cash flow is just one part of the equation when you’re factoring in what your total return on investment is, but keep in mind that your ROI, your cash on cash, and your rate of returns on multi-family properties are typically, and more than likely going to be lower with all else being equal, same market, same types of things.

Also, when you have larger multifamily properties, you have a common area inside and outside of the building, aside from the shared mechanics and the roof, and whatever else. And that usually means that you’re going to find more wear and tear on these common areas and these common mechanics that are in the property. So your upkeep and maintenance are probably going to be higher and that’s just an added cost. So you have to factor that into the equation as well.

Financing Single-Family Homes vs Multi-Family Properties

Now, when it comes to financing multi-family properties, lenders will take a more rigorous approval process. So they’re going to look at the property and they’re going to look at the trailing 12 and 24 months of cash flow of rental income of tax returns. They’re underwriting that property as if it was a business.

And they look at it as a business and social due, but it is sometimes, and maybe often easier to finance a loan for a $10 million apartment complex than it is to finance a single family home. And the main reason for that is really just the cash flow that comes from the property.

Again, a multifamily property is considered a business in the eyes of a lender, whereas a single-family home, even though it may be a rental property and you are truly getting a non-owner occupied loan for that property as if it was a rental property, which is, and will be the lender still looks at the larger multifamily property as a business.

And so they’re going to underwrite it from a cash flow perspective. That’s the most important thing to them. They’re going to look at you as well. They’re going to consider other things like the market value of that property, but they’re going to look at its financial performance because they care about the cash flow and its ability to service the debt, which is what they’re extending to you to make that purchase. So they think of it as a safer bet because of the cash flow. That’s really the bottom line for them figuratively.

And literally, the other thing too, is that multi-family properties, the value is based on the income that it generates, what is essentially known as the NOI or net operating income, which is all income minus all expenses, not including the debt service. And so that’s the number that they hyper-focus on to make sure that it meets their underwriting criteria to be able to service that loan ongoing basis, even with some vacancy.

So property values will change with multi-family properties based on the net operating income. Whereas single-family homes will be based on whatever the real market value is of that property based on the comparables in the area that can be determined from an appraisal. So that’s the thing about financing.

It can be easier, but keep in mind, these are larger loans with larger down payments and not necessarily as attractive terms as single-family, residential properties last but not least. There’s the concept of house hacking. If you are purchasing a multifamily property, whether it’s 10, 20 units, 30 units, 50 units, a hundred units, you can do this also with a duplex or four-plex by the way. But the concept of house hacking is that you live in one of the units and you rent out all the other units. And so this reduces minimizes or eliminates your housing costs for the month.

So your rent or mortgage payment is essentially covered by the operations of the business or that property. So this is a, you know, a nice concept and a great way to get started for many people who are just getting started and they have a minimal down payment, or they want to actually live and manage the property and learn from the experience.

Well, they’re purchasing, they’re usually first property, but sometimes it could be even their second or third as they start to stair-step and grow their portfolio and move from one to another after two years or so because the tax benefits are there on the capital gains by living in a property for two years or more. So that can be a great benefit for those people who are looking to get started with their first property. And it’s easy to do with a two to four-unit property.

You can still call that a multi-family property, less likely to be able to do that with a large multi-family property, especially if you’re just getting started because you just don’t have the experience. And lenders will look at that. Okay. Now let’s take a look at the advantages of single-family rentals. So first and foremost, and this is going to be pretty obvious is that they are less expensive.

A single-family residential property can range from, let’s say, send the 80,000 on the low end to about 150 to 200,000 on the high end. And I’m just looking at the 20 or so markets that we’re in right now. So if you’re purchasing a single-family, residential property, there’s a wide range of prices because there’s a wide range of markets and neighborhoods within those markets. So the thing with multi-family properties is that a lot of things are going to cost more compared to a single-family home.

The other thing too is the down payments are going to be much smaller with single-family homes. So I always like to use a hundred thousand dollars property as an example, just because the numbers are easy to calculate, but with a conventional loan, you need 20% down for your down payment and that’s $20,000.

So that’s simple math, a hundred thousand dollars property, but when you compare that to a multiunit property or multi-family property, let’s say there are 20 units, and those are a hundred thousand dollars each. Well, now you got a $2 million property. However, your down payment is typically going to be 25 to 30% down.

That’s just what commercial lenders are going to require as far as that financing is concerned. So it’s a much larger amount, both in terms of price and percentages. It can add up pretty quickly because you’re looking at a minimum of 5% and probably 10% more in terms of percentages as far as the down payment.

So you got to keep that in mind, you’re looking at potentially $500,000 as a down payment on that $2 million property. So it’s not as easy to get started unless you have deep pockets. A lot of investible capital. Another thing to keep in mind is what the lenders require as a cash reserve to cover expenses or payments if needed, then they’d call these reserves.

And with a single-family home, it could be as little as two or three months’ worth of mortgage payments. Whereas with commercial property and a commercial loan, you will probably need six to as many as 12 months of reserves to qualify for that financing. So it’s considerably more in terms of what you need to have in the bank to show the lender after you’ve closed, that you’re able to be liquid enough to weather through any kind of storm that comes up.

Another thing with commercial real estate loans is that they typically have higher interest rates. And it’s often about two and a half percent higher plus or minus. It could be two to 3%, but about two and a half percent higher. On average, the terms are just less attractive. And there are also far fewer banks that you can choose from in order to get that type of loan.

And the main reason for that is because there’s a much smaller secondary market out there for them to take that mortgage and sell it off with conventional financing. Often these loans are sold right away like right after you closed, they’re already put into a package and sold onto the secondary market. So the lender can essentially reload their warehouse line or their capital to make the next mortgage loan. So the financing is a little more difficult and it’s not as widely available or abundant it’s out.

There there are many lenders out there, but certainly not as many as in the residential space last but not least in the process of getting financing, you are going to need to provide the last two years of financials and the rent rules for the property. As part of the qualification. You don’t need to do this with single family homes, because it really just comes down to your ability to qualify for that mortgage.

And I should mention that also with multifamily purchases, the lender is going to want to see that you have at least some prior property management experience, whereas again, with single family homes, you don’t need that. So the down payments are lower. The rates are lower, the financing terms are more attractive because you can get 30 year fixed rate loans. You can just lock it right in. You don’t need to show property management experience.

And often you’re not the one managing your own property. Anyway, you don’t need to show financials on the property like two years of tax returns or two years of rent rolls. So there are many advantages on the financing side.

Single-Family Homes Have Higher Liquidity

So when we say, you know, it’s less expensive to get started, it’s not just about the purchase price. It’s also about the down payment and the terms and the financing overall, by the way, appraisals are also much more expensive on commercial property. But again, you know, it goes back to the concept of economies of scale.

It’s much more expensive, but you’re also rolling out that appraisal across whatever 20 units, 30 units, or more the second advantage of single-family homes. And this is something I actually debated a couple of times with grant Cardone is the liquidity. There’s a greater ability to sell, resell, even purchase single-family homes.

It’s just a much, much larger, more liquid market real estate in general, as an asset class is not very liquid. It just, isn’t, it’s a little bit slow to buy and it’s potentially much slower to sell a property, but the smaller, the number of units right down to the single-family home, which is one unit that is the quickest property to sell in the residential space or the real estate space.

So it’s just an easier product to sell because they are less expensive and there’s a lower barrier to entry and you have a much wider pool of potential buyers. So it’s not just real estate investors that are buying and selling homes or real estate in general. But when it comes to single family homes, you have a large pool of wanting to be home buyers, people who want to buy and live in their own home, not necessarily rent the property.

The Higher Demand For Single-Family Homes

So when you think about the buying pool, it’s the largest with single-family homes, and then it gets smaller and smaller as you go up to duplexes, triplexes, fourplexes, and on up. So obviously you can’t compare a 500 unit apartment complex and the size of the buying pool for that compared to a single family home, it’s a vast difference.

And this was my whole argument with rent. And he just, as of the belief that he can sell a 500 unit apartment building much faster than I can sell a single family home. And that debate didn’t go too far. I think I clearly made my point and I’m sure he knows I’m right, but whatever growing demand is also another advantage of single-family homes. And I’ve talked about this on and off on the podcast here for quite a long time, the fastest-growing segment of the single family space happens to be single family rentals.

It’s just incredibly high in demand. They are selling very quickly. And if you’re working with one of our investment counselors here, you will know that we do have inventory. There is a pipeline, but they do come and go and they go under contract fairly quickly, but that’s a common problem around the country. It’s not just unique to us. It’s just the way it is.

So single family rentals have been outpacing, even single family, home sales, especially multi-family housing. So that’s one thing is just demand is strong. And it’s growing. According to the US Census, they estimated in a recent report that the number of single rentals in the US grew by 31% in the 10 years following the housing crisis of 2007. So that period of 2007 to 2016, had an increase in single family rentals by 31%, you compare that to the growth in the multi-family space, which is five units.

And above it grew by a healthy 14%, but you can see that single family rental demand grew by more than twice, as much as multifamily. So there’s strong demand and growing demand for single family homes, which is good for you from an appreciation perspective and a liquidity perspective, as well as the future demand for those properties in terms of rentals, sales, and price growth.

Also adding to this upside is that single family rentals traditionally have less tenant turnover compared to multi-family properties. And I’ll talk about this a little bit further here in a moment, but I just want to quickly say that another study that came out from the Urban Institute, put out a forecast showing that demand is very strong and continues to grow, especially from the millennial demographic, because they’re now entering that age when they want to start, not only buying their first home but having kids and the demand on new household formation is very strong and increasing.

So the desire for those single family homes is just increasing year-over-year. So that’s creating economic pressure and it’s just driving more demand for single family homes and rental homes. And that doesn’t mean demand is not there for multi-family properties. It’s just incredibly strong for the single-family from a diversification perspective.

Building a Diversified Portfolio With Single-Family Homes

Rental markets, as you know, are local dynamics. The economics are predominantly local. So what happens in one market is different than what happens in another market. So it’s easy or maybe easier to build a real estate portfolio. That’s geographically diversified because if you follow kind of my rule of thumb of three to five properties in three to five markets, you could quickly or relatively quickly build a portfolio of three, five houses, or even duplexes or fourplexes, but three to five single family homes in one particular market.

That makes sense for you from an investment perspective and then move to another market, geographically different, usually in another state where you continue to build your portfolio, adding another three to five properties there, because you’re dealing with single units, it’s easy to diversify geographically.

Whereas if you take that same investment capital that you use to build up that portfolio diversified across three to five markets and put it into one, let’s say a 20 or 30 unit apartment building, you’re stuck to one market you’re rooted there with all your units. And the only way to diversify geographically is to have additional investment capital where you can now start to acquire other properties, whether single families or multi-families in other markets in other States.

So it’s just easier to grow and diversify your portfolio in multiple markets using single family homes. And I guess anytime I say, single family homes here, I’m also adding in duplexes and fourplexes. I think you got that by now.

Single-Family Homes Have Low Vacancy & Tenant Turnover

So the final point I want to make is the benefit of single family homes is that both anecdotally and statistically, they have lower tenant turnover. And I saved this till last because to me, this is probably one of the biggest advantages. And one of my favorite things about single family rentals is the lower tenant turnover. For me, that is critically important because I am all about having long-term tenants. I want to have tenants that are on at least a one-year lease, ideally a two-year lease.

I don’t need anything longer than that, but I want them to stay and be happy where they live and, you know, enjoy the property, enjoy the neighborhood and keep renewing their lease for as many years as possible. Because the bottom line again, figuratively and quite literally is that tenant turnover is expensive.

It’s costly. It takes money and time. You know, there’s a cost to a turnover and there’s downtime. So here’s lost rental income. So I don’t want the lost rental income. I don’t want to pay my property manager all too often for that turnover because they’re going to make a fee on that turnover. And they also have to take the time where it’s vacant to clean repair, any damages, take care of wear and tear market, and show the listing, you know, screen applicants.

So, you know, you may only have a downtime of three, four days in a really hot market, but just assume that it’s probably going to take two weeks or maybe three. And so you’re going to have a month of vacancy plus the first month, or maybe the first half months of rent going to the property manager as the cost of that turnover.

It’s not the cost of the turnover, but it’s the lease-up fee. So, but that’s not going in your pocket. That’s going to your property manager for the service of turning over that property and releasing it. So turnovers are costly. It’s actually probably the biggest cost in owning property and your budget for this, of course.

So it’s not like it’s a surprise expense. Your budget for maintenance and repairs and your budget in your performance for vacancy and turnover. So you’ve already factored it in, it’s baked into the cake, you’ve accounted for it, but the less turnover you have, and that’s my point, the less turnover you have, the more consistent and predictable your cash flow is.

And that’s your short-term gain. Your long-term gain is equity, growth, and appreciation, but the short-term gains are monthly and annual cash flows. So I want to keep that going as much as possible, as long as possible. So this is the big thing for me is the lower turnover, the tenant turnover, one person or company that I like to follow is John Burns real estate consulting.

So I know John Burns and some of his data shows that 52% of single-family residential renters are families. You compare that to multifamily residential properties and that’s 30%. So that 30% are people who are more likely to be under the age of 35. And if you look at that demographic closely, you will find that they are for many reasons more transient.

They don’t tend to stay as long. For many reasons, it could be jobs, friends, getting a girlfriend, getting engaged, getting married, moving up, moving down when you’re dealing with apartment and apartment residents or dwellers that profile. And that demographic is just more transient.

It’s just normal. There’s nothing wrong with it. It just is what it is. The average single-family, residential tenant stays for three years. That’s average. I’ve had tenants stay for five-plus years. So it’s not uncommon to have a very long-term tenant, but the average SFR or single-family residential tenant stays for three years. And that’s roughly double the average apartment tenure, which is roughly about one to one and a half years.

And also another interesting little fact is that single-family, residential tenants often will stay five or six years as long as you’re not above-market rent. If you’re at, or just below fair market rent, they have a good deal in other words, and they know they have a good deal and you’ve got a house in a great neighborhood and it’s safe, clean, functional.

It is not uncommon to have people stay five, six years, or more. It’s not unheard of in the single-family, residential space and over time, that just means a considerable cost saving. So that’s just money in your pocket. I think it’s well worth it. Single-family homes are easy to acquire, easy to understand, easy to repair, easy to address, easy to fix, easy to deal with, easy to show.

There are just a lot of benefits. In my opinion, if I’m sounding pretty excited about this last bullet point of having lower tenant turnover, it’s because I really am. I think this is a big deal and I don’t think enough people talk about, you know, how important it is and how beneficial it is.

Advantages of Buying Single-Family Rental Properties

Buying single family rental properties has a lot of advantages such as forced savings for retirement, tax benefits, increase in wealth, stable income, and long-term capital gains. Single-family homes have the widest market appeal. In a softening marketplace, real estate that houses jobs (retail, office, etc.) will generally show rental weakness before the real estate that houses people (single-family homes). Changes in job indicators give investors in single-family homes opportunities to re-position faster than investors in commercial property can.

Single-family homes have lower rates of vacancy (downtime) than commercial properties because there are more potential renters for a single family home than there are for a gas station or a big box store. Single family homes have the most attractive financing terms available. Single family homes will never become technologically obsolete. What technology could replace the need and desire for a place with four walls and a roof where humans sleep at night?

Contrast this with an investor who buys a retail center and then internet shopping and a slow economy makes this retail center obsolete. Corner video stores are being replaced by Netflix and streaming movie downloads. Movie theaters are being replaced by home entertainment systems. Soon you may see gas stations becoming technologically obsolete because of major changes in the ways we travel and fuel our vehicles.

At the very least, gas stations of the future will require expensive retooling that will erode years of profits for the owner. Although real estate is relatively illiquid, single-family homes typically sell faster and have more liberal access to financing than any other type of real estate. Single family homes can be purchased with cheap, fixed-rate financing, with a thirty-year amortization and a 20-25% down payment.

Apartments will usually be financed at a higher interest rate and require 30% down, plus you’ll pay a large premium to get an interest rate that is fixed longer than 5 years, and you’ll have an amortization period of 20 – 25 years. If a house and an apartment unit generate an equivalent net operating income, the house will provide superior cash on cash return due to the better financing available for single family homes.

There are two general approaches to single family property investment – Fix and flip investing and buy and hold strategy. Each approach has its advantages and disadvantages, depending on whether the investor is aiming for short-term or long-term capital gains.

Buy And Hold Strategy

Buy and hold real estate investing is the process of acquiring real estate, particularly rental property, to own and profit from over a long period of time. Buy and hold real estate is a great way for investors to diversify their investment portfolios and achieve financial freedom.

Fixing and Flipping

Fix and flip involves buying real estate, repairing or renovating it, and then reselling it for a profit. On the other hand, the buy and hold strategy is often referred to as buying and holding rental property. The investor buys and holds the property with the expectation that it will generate dividends through rental income. Fix and flip real estate strategies often require a lot of work because repairing or renovating a house usually takes months.

It is also considered a bit riskier, especially for new investors venturing into real estate. Nevertheless, fix and flip investments are lucrative because the investor can earn huge profits after reselling the property. You may not earn so much as a flip, but investing in a rental property is a permanent income. You don’t have to deal with any problems or tenants if you don’t want to. It's easy to hire a property management company and you can work the numbers in before you purchase the property.

Single Family Homes Can Be Purchased in ‘Bite Size’ Portions

Using the ‘bite size’ investment strategy with single family homes gives you flexibility in your tax and estate planning as well as making it easier to harvest equity. If you want to cash out some of the equity in your real estate portfolio, you can sell or refinance one or two single family homes rather than liquidate an entire apartment building.

The same ‘bite size’ concept applies to income taxes. For example, offsetting a stock loss with a real estate gain could result in ‘tax-free’ real estate profits. Please note, income taxes are a very specialized subject. I am not a tax professional. Always consult your tax advisor.

The income tax benefit from depreciation strongly favors single family homes over commercial property. Single family homes can be depreciated over 27.5 years while commercial property is depreciated over 39 years. The shorter depreciation schedule of single family homes can be a great boost to an investor’s initial cash flow.

Avoid all vacant land investments! These take specialized skills to manage, are difficult and expensive to finance, and are very hard to sell. I know many people who have made huge profits buying and selling vacant land, but vacant land is not hassle-free and it definitely does not cash flow! Making money investing in vacant land requires a lot of skill or a lot of luck.

Vacant land takes money out of your pocket for taxes, maintenance, and liability insurance while it produces no revenue. If you are a new or part-time investor, just avoid vacant land. Many people call vacant land “the alligator” of real estate investing because it slowly eats away all of your savings.

A word on buying condominiums: Don’t! While a condo may give you cash flow, it is never a hassle-free investment. I’ve spent years of my life developing, owning, and managing condominiums. I HATE THEM! The only winner in the world of condominiums is the developer who originally sells the condo to the general public.

Condos come with the huge, wasteful expense of a Home Owners’ Association (HOA). These collective management groups have different names depending on the location of the property and are sometimes called Property Owners’ Association (POA) or the ominous-sounding Horizontal Property Regime. Cooperatives (co-ops) are legally very different beasts than condominiums, but they are all hideous investments.

Overpaid vendors
Restrictions on property usage
HOAs are run by an untrained volunteer board
HOA dues are variable
Your neighbor's failure to pay means you pay
Lower rent and higher operating costs
Higher costs of financing
The inability to get condo financing can decimate condo values
Non-volunteerism/Double management expense

These negative factors apply to all types of condos: retail condos, office condos, storage condos, residential condos, but none of these factors apply to my favorite cash flow investment… single-family rental homes!

8 Single-Family Homes

Purchase Price: $100,000 x 10 houses = $1,000,000
Net Operating Income at 8% CAP = $80,000
25% Down payment = $250,000
Cost of 75% Financing (@ 5% 30-year fixed) = $48,312
Positive Cash Flow = $31,688
Cash on Cash Return = 12.7%

16 Unit Apartment Building

Purchase Price: $62,500 x 16 units = $1,000,000
Net Operating Income at 7% CAP = $70,000
30% Down payment = $300,000
Cost of 70% Financing (@ 7% int. only) = $49,000
(25 year fully amortized payment $59,369)
Positive Cash Flow = $21,000
Cash on Cash Return = 7%

Forced Savings for Retirement

One of the top advantages of buying a single family rental property is that it is a great way to save for retirement. A single family rental property is a good source of regular passive income. The rent is often used to pay off the mortgage for the property. Once the mortgage has been fully paid, the landlord has the choice of whether to hold the rental property for a monthly check or sell it for a lump sum profit.

Tax Benefits

Rental property owners also have significant tax benefits, which is one of the advantages of buying a single family rental property. The IRS allows tax deductions for property tax, repairs, and ordinary and necessary expenses for managing the rental property. Costs of supplies and materials, as well as maintenance and repairs needed to keep the property in good condition, are also deductible. The biggest benefit is writing off depreciation, which can save you thousands each year in taxes.

Long-Term Capital Gains

Single-family rental property investors purchase properties to rent them out, with the expectation that the property value will increase in the long term. Landlords can sell their single family rental properties at a profit when the market conditions are right. This is especially profitable for real estate investors who leveraged their rental property investments.

Investment With Leverage

You can buy a single family rental property with a 20-25% down payment and a mortgage loan for the balance. In other words, you get a $100,000 investment for a $20,000 cash payment which means you are using a relatively small percentage of your funds to make the purchase. For the leverage to work in your favor, the real estate prices in that location should not decline. In real estate markets where prices fall significantly, homeowners can end up owing more money on the house than the house is actually worth. With good credit, it is not difficult to get financing for a rental property. ‘

A Tangible Investment

A single family rental property is a tangible asset unlike financial investments such as stocks, bonds, mutual funds, and other financial instruments. You can call it your own and it lets you have better control over it. You can sell it whenever you want to.

Stable Income

Unlike the stock market, the real estate market is not prone to sudden and extreme fluctuations in price. Certain factors such as population growth and growing demand for housing and rentals ensure that the investment you make on a single family rental property will be a profitable one.

Increase In Wealth

Real Estate is the best avenue for long-term investment for the accumulation of wealth with minimum risks involved. No other asset increases wealth the way real estate does. Real estate is a powerful wealth-building tool that has made millions of individuals millionaires over a period of time. Appreciation of a property is one of the biggest ways to increase your wealth as a real estate investor. You can do it by choosing the right properties in the right market and managing them the right way.

With the current real estate market conditions in the US, now is a great time to invest in single family rental homes. Compared to the low yields in stocks and bonds, rental properties are a good source of regular monthly income. For investors wanting to diversify their portfolios, tapping into this market with the help of a good realtor or turnkey provider can provide higher ROls.

There are factors to consider when choosing a real estate market for single family rental property investing, such as population and employment growth, and an increase in house values. When buying single family rental properties located in a different city or state, investors also research purchase prices, taxes, and housing regulations. Other investors also look at the percentage of the population that is renting. For instance, D.C., New York, and California have the most renters, in terms of percentage of the population.

So let me just wrap this up by quoting something from a recent Zillow article. And I’ll just quote right from the article here. It says among young adults, renters of single-family homes have always tended to move less often than apartment renters and single-family home rentals are one of the fastest-growing market segments. Uh, unquote. So there you have it.

I hope this has been helpful for all of you again, you know, I just need to compare single-family to multifamily rental properties as fairly as possible. But like I said, I have a preference and I have a little bit of a bias, but I’m not saying that one is bad and I’m not saying one is better than the other.

It really comes down to your personal criteria and your investing goals. But you also have to consider what is your investment budget? What is your investible capital? What is your access to financing and what do you qualify for? And last but not least, you need to ask yourself what is my risk profile.

And especially if you’re thinking about single-family investing, you know, let us help you put that strategy together because it’s probably a very good fit for you. And my team of investment counselors is certainly here to help you. Norada Real Estate Investments helps take the guesswork out of real estate investing. By researching top real estate growth markets and structuring complete turnkey real estate investments, they help you succeed by minimizing risk and maximizing profitability.

Click on the link for the complete list of investment properties for sale in the various real estate markets of the U.S.

The Important Tax Benefits of Real Estate Investing

February 21, 2022 by Marco Santarelli

If you are planning on increasing your wealth, the best investment to deal with is real estate. Investing in real estate has some incredible tax benefits. Other benefits are an increase in property value due to appreciation and good cash flow in the form of rental income. It is easy to find the lists of these tax benefits of real estate investing, like the ability to deduct nearly every expense associated with the real estate or how to qualify to exclude from your income all or part of any capital gain from the sale of your main home.

However, it is equally easy for someone to inflate or conflate various tax benefits given by the IRS. Investors dealing in real estate get the maximum tax benefits in the name of deductions, which we'll discuss in detail. Deductions that are accounted for can be depreciation, property tax, repairs, or any other form of expenses. These breaks in taxes are helpful to a lot of people dealing with real estate as their full-time business. Let’s look at the top tax benefits of investing in real estate using hard numbers. This is the basic introduction to how tax benefits in real estate work.

The average home in the United States costs around 220,000 dollars. Yet many people don’t need a three or four-bedroom single-family home. Nor should you pay that much for an investment property. A good rule of thumb for investors is to pay no more than 70 percent of the ARV or After Repair Value of the property.

We’re going to use a property purchased for 130,000 dollars. This may be a small starter home in an average neighborhood or a full-sized home in a working-class neighborhood. The house would then be worth around 185,000 fixed up if we were going to pay cash for the repairs. You don’t want to overpay for the property.

Determine how much the property would rent for it after repairs.
Divide that by the property value.
You want a 1 percent rate of return at a minimum.
This means that if you can rent the property for 1600 dollars a month and have 300 dollars a month in expenses, your net revenue is 1300 dollars a month.
On a 130,000 dollar starter home, this is a 1 percent ROI and makes it a good deal.
If the property costs 130,000 dollars now but requires 20,000 in repairs, it probably isn’t worth it unless you’re going to sell it soon to capture the increased equity.
Don’t forget to factor in expenses like property management fees, property taxes, and insurance if you’re going to hold onto the property in addition to expenses like the mortgage.

Tax Benefits of Real Estate Investing

Suppose you want to buy a 130,000 dollar house with 20 percent down. That means the down payment is 26,000 dollars. This results in a mortgage of 104,000 dollars. We used a mortgage calculator assuming a 104,000 dollar mortgage at 5 percent over 30. This results in a monthly payment of 558 dollars a month. As a real estate investor, your mortgage interest becomes tax-deductible, while payments toward the principle are not. This makes nearly all of the roughly six hundred dollar house payment a business expense you can write off.

Because you put 20 percent down on the property, there is no PMI or private mortgage insurance.

However, property insurance will be tax-deductible, too. Homeowner's insurance ranges from 1 to 2 percent a year. If we assume a 1 percent homeowner's insurance policy, the premiums are 1200 to 1300 dollars a year. Property management fees are tax-deductible business expenses. If the rent on our 130,000 investment property is 1300 dollars a month, you’ll pay roughly 130 dollars a month or 1560 dollars a year for someone else to collect the rent.

All the costs associated with property acquisition can be written off. This list includes title insurance, legal fees, real estate agent commissions, transfer taxes, back taxes, and closing costs. Don’t be afraid to hire a real estate attorney if it helps you avoid major mistakes. The cost of asking a professional about the tax benefits of investing in real estate is tax-deductible, too.

Property taxes vary wildly across the country. Some states lack a property tax, while the rate may be negligible on rural properties. The average property tax rate in the US is 1.2 percent. This translates to a $1,560 property tax bill for homeowners. Unfortunately, that’s factoring in the homestead exemption property tax investors don’t get.

Assume a $2,000 to $2,400 a year property tax bill. The property taxes you pay offset the potential income taxes you would owe if your real estate properties are held by an LLC. Or they’re treated as a business expense for you as a private investor, reducing the taxable income you’ll owe on the property. Note that you’ll still enjoy the same tax benefits of real estate investing if it is held in a private LLC as held in your name.

What Are Tax Benefits of Real Estate Investing?

Everyone pays property taxes, but how much tax you pay can be reduced by utilizing certain tax breaks available in real estate. Let's now discuss each of these tax benefits in detail and how to use them to maximize your savings.

Depreciation

What is Depreciation?

One of the greatest tax deductions real estate investors enjoy is depreciation. Like any other asset residential real estate is also an asset that breaks down over time. Depreciation is a deduction taken on materials that break down. The IRS uses depreciation to acknowledge that an asset wears down over time. It is like an allowance given for exhaustion or wears and tear of the property, including a reasonable benefit for obsolescence. Depreciation is charged in different years for residential and commercial property. For residential properties, it is calculated in 27.5 years, and for commercial, the same is 39 years.

It is an incredible benefit given by the IRS to real estate investors. Even though anything that breaks down on the property can be deducted, we all know that property values generally go up over time. Therefore, depreciation on real estate is often known as a “phantom deduction” because although we deduct the cost, the actual loss never really occurs.

How is Depreciation Calculated?

Depreciation is charged by the method named (MACRS) Modified Accelerated Cost Recovery Method. In MACRS the residential rental property and structural improvements are depreciated over 27.5 years, while appliances and other fixtures are depreciated over 15 years. Whatever is the cost of your residential property (excluding the cost of the land), it will be spread out over 27.5 years and deducted every year.

Note that you can only depreciate the building, not the land.

For simplicity’s sake, we’ll say the land is worth 30,000 dollars while the house is worth 100,000 dollars, which will be spread out over 27.5 years.

This means you would divide $100,000 by 27.5 = 3636.36. Hence, you can deduct $3636.36 every single year for the next 27.5 years on your investment property.

And that much of the profits from the property are shielded from income taxes because it is offset by the presumed losses from depreciation. This is separate from the tax-deductibility of actual repairs like replacing the roof or dead air conditioner.

If you made major improvements to the property, such as the fixer-upper scenario, those improvements are included in the depreciation. If you bought the house for 130,000 dollars and made repairs and renovations that made it worth 180,000 dollars, you have an additional 50,000 dollars of cost basis to use for depreciation purposes.

Note that minor repairs like a new hot-water heater or patched roof don’t count in depreciation.

Important Tips About Using Depreciation as a Tax Benefit in Real Estate

Depreciation will start the moment the property is officially available for occupancy.
This means depreciation doesn’t start the day you bought the property but the day you started trying to sell it or find a renter.
Conversely, it means you can claim depreciation even if the property is vacant for several months.
Depreciation ends if you sell it, exchange it or retire it from service as a rental property.
For example, you can’t claim depreciation if you move into it and make it a permanent residence.
The catch in depreciation as a tax benefit of real estate investment is that when you sell the property, that entire deducted amount may be taxed at a 25% rate, in addition to any other capital gains taxes.
However, if you didn’t make money on the sale, then IRS will not tax your old depreciation amount.

Lower Capital Gains Tax

Capital gains are the profits you make when you sell a property. One of the tax benefits of real estate investing is that there are lower taxation rates on your capital gains. The gains that investors get from selling their investment property for sale are termed capital gains which are of two types as mentioned below.

Low tax rates on capital gains are an advantage if you build your long-term investment strategy around strategically selling real estate for growth or living expenses. Generally, in all tax brackets, capital gains taxes are considered better than the equivalent income tax on your ordinary income.

Short-Term Gains: The gains that are received from investment properties that are held for less than one year are called short-term gains. Investors have to pay tax according to the bracket under which they fall. There is no special tax benefit in real estate for short-term capital gains.
Long-Term Gains: The gains that are received from investment properties that are held for more than one year are termed long-term capital gains. The tax rate is lower in the long-term capital gains because of which investors prefer the latter over the former. The long-term capital gains tax is either 0%, 15%, or 20%, depending on what income tax bracket you are in.

1031 Exchange

As a real estate investor, you can use this tax code called 1031 Exchange to sell a property and use the profit to buy a new one that is of equal or greater value. In this way, you can defer paying taxes until that next property is sold or you can opt for another 1031 Exchange. When you choose to sell your property, you are required to pay taxes for your capital gains.

With the help of section 1031 of the Internal Revenue Code, you are permitted to postpone paying taxes when you reinvest those gains in another property. IRS considers that you are exchanging your old property for another real estate property. This is one such type of swap in which there is no tax paid; it is deferred legally.

Here are some of the factors which the 1031 exchange must meet.

The property which has been replaced and the property or properties bought in its place must have the same or greater value.
The IRS requires that you identify the property you plan to buy within 45 days and you also must close on that property within 180 days.
The properties included in the transaction must be similar. A real estate property cannot be exchanged for some other type of asset, such as a real estate investment trust (REIT).
The exchanged properties should be used for any productive purpose in business such as for investment.
Any cash or property received through the transaction that is not considered like-kind property is considered boot and is subject to taxation. Therefore, you can touch the cash. You must use an intermediary who will hold onto the cash while you wait to close on the new deal. If you do want to take out some of the profit, that amount will be taxed.

No FICA Tax

The Federal Insurance Contributions Act helps in the splitting of tax between the employee and the employer, and the rate of tax is 15.3%. If you are self-employed and have no employer, you are responsible for the full 15.3%, which is known as Self-Employment Tax. Now you might be thinking what is the tax benefit here for real estate investors?

The US Government does not currently look at rental real estate as a job or self-employed business. Therefore, a rental property income is not generally taxed as “earned income” and does come under FICA. Remember, it depends on how you earn from real estate. If you own a holding company and draw a salary, you would come under FICA.

Tax Benefits From Refinancing Your Mortgage

Refinancing is also considered one of the tax benefits of real estate investment. Exchanging your old mortgage with a new one at a new interest rate is known as Refinancing your Mortgage. Refinancing provides the borrower with fresh money at lower interest rates due to which the homeowner can lower his/her monthly payment amount.

As he/she obtains the loan at a lower rate of interest and consolidates all the debts, he/she now has to pay only one loan amount, which is obtained at a lower rate of interest and is left with some cash in hand. You don’t need to pay taxes on this. You’ll need to pay taxes when you sell the property, but you can use that money right now with no tax at all. The cash in hand after refinancing is non-taxable.

How Do You Take Advantage of These Tax Breaks?

The simplest approach is to document all of your expenses from property repairs to ongoing maintenance to insurance to taxes. Track one-time expenses like the cost of listing it for rent or sale. Your accountant will total up these expenses to determine your total business expense write-off. More importantly, what you pay your attorney or accountant to manage your business is also a tax-deductible business expense. The costs of acquiring and fixing up a property occur on a case-by-case basis.

Let’s jump to the tax calculations for the second year of ownership. We’ll use conservative estimates, though you might keep costs down.

Property taxes – $2000 a year

Depreciation – $4000 a year

Mortgage interest – $6000 a year

Property management – $1560 a year

Repairs – $2000 a year

Insurance – $1300 a year

Legal and tax preparer fees – $500 a year

That totals up to $16,860 a year in expenses. We already estimated an income of $1,300 a month every month or $15,600 a year. In this case, you’d owe no income tax on the property. If you were charging $1,500 a month in rent, you’d pay a little more in property management fees but only have to pay income taxes on $2,000 a year. In reality, you’re clearing closer to $6,000 a year, because you aren’t paying for the property’s depreciation. Know that these are rough, back-of-the-envelope calculations regarding the tax benefits of real estate investing. The costs and benefits of owning a particular property should be done on a case-by-case basis.

How Can You Lower Your Tax Bill as a Real Estate Investor?

Hold the property for more than a year to reduce capital gains taxes on the property’s appreciation. This makes a fix and rents a better strategy than flipping houses. You could even buy run-down properties, fix them up, manage them for 13 months, and then sell them to another investor. Just don’t get yourself classified as a dealer instead of an investor, because the self-employment category will double your FICA taxes.

Another option is owning the property as a legal liability corporation. You can receive the profits from the LLC, but you are personally shielded from lawsuits. You have some control over when you sell the property or pay the property taxes. Run the numbers. You might want to delay paying the property tax bill until January next year to offset the profits if you had a major repair bill this year.

If you sell the property, you’ll owe capital gains taxes. A like-kind exchange under Section 1031 of the tax code allows you to defer paying these taxes. Always work with a good real estate tax advisor to handle such a rollover. Another option is selling the property to the tenant or another investor under an installment deal. It lets you write off the value of the property with each installment, though you run the risk of only owning half a house if they default.

In theory, you can reduce your tax bill by borrowing against properties you own to buy new properties rather than selling them, too. On the other hand, you don’t want to pay more for repairs, services, or financing to get a tax write-off. For example, you’re not saving money if you pay the bank an extra 1000 dollars to get a 250 dollar tax write-off.

Set up a dedicated home office that you only use for work. Then you can deduct part of your mortgage and utilities as a business expense. Get organized. For example, you should keep track of mileage and travel costs, so you can include them as business expenses on your taxes. Document what you pay to attend real estate investing seminars or software you buy to run your business.

For simplicity’s sake, set up a bank account that is only used for managing rental properties. Rent is deposited into the account, and you only pay expenses for the rental properties out of that account. Then you don’t accidentally try to write off personal home repairs. However, this approach does make it difficult to write off a home office.

Concluding Thoughts on Tax Benefits of Real Estate Investment

Real estate investing enjoys many tax benefits. It is one of the most tax-advantaged investments compared to other investments. It depends on the investors and how they utilize these investments to the best of their advantage. It requires careful planning and effort to maximize your tax deductions while remaining in compliance with the complex regulations involved. One can attain financial freedom by learning the right way to invest in the real estate industry. It is wise to hire a good CPA or tax expert who will save you more money than they cost. They will help you in plotting your tax strategy because the US tax code is quite complex and it is difficult to understand all the rules and regulations.

Tax Benefits of Real Estate: Places Where You Can Reap Maximum Benefits

Here are some of the best states in the U.S. for owning a property. This list takes into account median home values as well as state and local tax rates, including income tax rates, and property taxes as a percentage of market value or assessed tax value (whichever is applicable). If you buy a property or live there, it’s an excellent investment. We have listed each state's effective property tax rate, median home value, and calculated annual taxes on median home values —for an easier understanding of these tax rates.

The tax rates have been taken from Smartasset.com and median values have been taken from Zillow.com.

1. Alabama

Alabama has both a low tax rate and home prices that are well below the median home value in the U.S. For residential property, the assessed value is 10% of the appraised (or market) value. So, for example, a home with an appraised value of $100,000 would have an assessed value of $10,000. We have taken the median home value as an assessed value without any exemptions.

Median Home Value: $143,072
State Income Tax Rate: 2% – 5%
Avg. Effective property tax rate: 0.42%
Annual Property Taxes: $600

2. Nevada

Nevada's average effective property tax rate is just 0.69%, which is well below the national average of 1.08%. There are numerous tax districts within every Nevada county. County Assessors are required to reappraise all property at least once every five years. The assessed value is equal to 35% of that taxable value. Thus, if your County Assessor determines your home’s taxable value is $100,000, your assessed value will be $35,000. Tax rates apply to that amount. We have taken the median home value as a taxable value without any exemptions.

Median Home Value: $309,730 (Zillow)
State Income Tax Rate: 0%
Avg. Effective Property Tax Rate: 0.69%
Annual Property Taxes: $2,137

3. Florida

The state of Florida's average effective property tax rate is 0.98%, which is slightly lower than the U.S. average of 1.08%. Property tax rates are applied to the assessed value, not the appraised value. The most widely claimed exemption is the homestead exemption. Let’s say you have a home with an assessed value of $100,000. The first $25,000 would be exempted from all property taxes.

The next $25,000 (the assessed value between $25,000 and $50,000) is subject to taxes. Then, the next $25,000 (the assessed value between $50,000 and $75,000) is exempt from all taxes except school district taxes. Finally, the remaining $25,000 is also taxable. We have taken the median home value as an assessed value without any exemptions.

Median Home Value: $252,309
State Income Tax Rate: 0%
Avg. Effective Property Tax Rate: 0.98%
Annual Property Taxes: $2,472

4. Louisiana

Louisiana has the third-lowest effective property tax rate of any U.S. state. Only Alabama and Hawaii residents pay less on average than residents of Louisiana. For residential property in Louisiana, the assessed value is equal to 10% of the market value. So if your home has a market value of $100,000, your assessed value would be $10,000. It offers a homestead exemption on the first $7,500 of the value of a person’s primary residence (does not apply to city taxes). We have taken the median home value as an assessed value without any exceptions.

Median Home Value: $170,388 (Assessed Value)
State Income Tax Rate: 2% – 6%
Avg. Effective property tax rate: 0.52%
Annual Property Taxes: $886

5. Texas

The average effective property tax rate in Texas is 1.83%, well above the national average of 1.08%. A property appraisal is done annually by county appraisal districts. Tax payments are based on the current market value of a property. However, some exemptions help lower property taxes in Texas. Most popular are homestead exemptions which reduce property taxes for all homeowners by removing part of their home's value from taxation. Only a homeowner's principal residence qualifies for it. It exempts at least $25,000 (for school districts) of a property’s value from taxation. We have taken the median home value as the current market value with Homestead Exemptions of $25,000.

Median Home Value: $211,199
State Income Tax Rate: 0%
Avg. Effective Property Tax Rate: 1.83%
Homestead Exemptions: $25,000
Annual Property Taxes: $3,407

You can also click on this link to read our blog on how to be a successful real estate investor. This blog will teach you how to succeed in your first real estate investment, going with a moderate pace, learning much, and being ready to leave any enticing opportunity that comes your way.

REFERENCES

Median home values
https://www.zillow.com

Effective tax rates
https://smartasset.com

Tax advantages
https://www.investopedia.com/articles/investing/060815/how-rental-property-depreciation-works.asp
https://www.fool.com/millionacres/taxes/real-estate-tax-deductions/top-5-tax-advantages-real-estate-investing
https://www.usatoday.com/story/money/personalfinance/2017/04/16/comparing-average-property-taxes-all-50-states-and-dc/100314754

How to take advantage or maximize tax benefits
https://www.moneycrashers.com/lower-taxes-real-estate-investor
https://www.homeunion.com/how-to-claim-real-estate-taxes-and-deductions
https://smallbusiness.chron.com/calculate-value-investment-property-4122.html
https://finance.zacks.com/much-spend-investment-property-vs-potential-rental-income-10487.html

Investing In Rental Property For Beginners 2022 | Norada

February 21, 2022 by Marco Santarelli

Investing in a rental property means buying a property that can generate an income in the form of rent. There is no doubt that rental property investment can be a great way for beginners to generate positive cash flow every month. However, many people still find it challenging due to expenses typically associated with traditional real estate investments including property management and renovation works. In this article, we'll give you an overview of how rental property can easily be bought as a turnkey investment.

It is a well know fact get started in real estate investing can be very tricky and overwhelming. In recent years, the solution to this problem has emerged under the so-called turnkey rental properties. Why did investing in turnkey rental property become so popular? The answer is because, on top of all of the advantages it entails, investing in rental properties offers an ideal solution to investors' biggest problem: Headache. Turnkey rental properties allow investors to sit and enjoy their passive cash flows while someone else does all the hard property management work for them.

Rental Property Definition (Turnkey)

A rental property, also called ‘turnkey', is a real estate property that is fully rehabilitated, functional, and ready to use. It is usually managed by a third-party property management company whose aim is to make the real estate investing process as simple as possible for you as an investor so that all you have to do is to “turn the key”. This type of property is highly appreciated by new real estate investors who have little experience in rehabilitation, or even seasoned investors who simply prefer to have someone else do the analysis and renovation for them.

Is Rental Property A Good Investment?

Should you invest in rental properties? Real Estate is a proven wealth-building vehicle. The most common form of real estate investing, the “buy and hold strategy” involves purchasing a property and renting it out for an extended period of time. Essentially, a “buy and hold investor” seeks to create wealth by renting the property out and either collecting monthly cash flow or simply holding the property until it can be sold for profit in the future.

Among the advantages of this strategy is that during the time that you hold the property and rent it out, the mortgage is paid down every month, decreasing your principal balance and increasing your equity in the rental property. Investing in rental properties can generate passive income, significant tax benefits (being an income property), and build equity from price appreciation over the years.

Real estate is the only investment vehicle that you can live in or rent to produce income. You can also derive large tax-free profits when you sell your investment property at a higher price than you paid for it. But, before investing in a rental property you must consider your investment priorities and temperament. How much time do you have to devote to rental property investing? Can you solve the problems on your own? You can also click on this link to know about the various risks in rental property investing.

You need to know how to estimate a rental income and learn about the other ways you can use to monetize a rental property. Make sure you understand all of the expenses associated with rental property investing. There is a lot more than just a mortgage to think about. It is important to understand the two different types of appreciation and how they can impact what type of property you want to buy and where to buy it. Appreciation in the rent and property value.

Rental Property Appreciation

Rental Properties Generate Passive Income

Investing in turnkey rental properties is a highly appealing approach to many investors who prefer “hands-off” property management of their properties, while still enjoying the return on their investment. In this case, the third-party property management company is responsible entirely for the management of your property which you don’t even have to see.

All that you need to see is your ROI flowing into your bank account each month. For example, if maintenance is needed, it will be the property management company that will receive the call, not you. They will also be collecting rent from the tenants and addressing their complaints.

Investing in rental properties has many advantages that may not be considered by first-time investors. The things mentioned above are not a cup of tea for every investor. Although it is important to learn all things, if you can't due to any reason, you can choose so-called Turnkey Rental Property Companies to help you out. The easiest way to get started in rental property investing is by buying rental properties from reputed Turnkey providers.

The Importance of Real Estate Education

The best investment you make is in your education. Real estate investing is not a “get rich quick” scheme. When it comes to your real estate education, a solid foundation is a key to a long-lasting business. As you analyze your deals, make sure to learn the trade and perfect it. You need to tune in to sources of real estate education so that you can continue building your knowledge base and avoid critical mistakes.

Books are fundamental in gaining an education in real estate and perhaps the most widespread learning method for investors. Real estate books are produced each year by the thousands, and every major bookstore in the world contains a whole section on real estate investing. With the advent of the internet, you can buy e-books on real estate education at cheaper rates than paper books.

You can subscribe to real estate blogs, which can be an amazing source of free information. Real estate podcasts are one of the newest innovations in the world of real estate investor education. You cannot fly solo. Building a large network is a vital part of being a real estate investor. You need to build a network in the real estate market that will help you to succeed.

Finding a mentor and learning from those who have come before you is one of the most important steps you can take in your real estate investing education. Concentrate first on establishing a relationship with seasoned investors who you would like to learn from. A mentor doesn't need to be a real estate mandate Donald Trump or Robert Kiyosaki.

A mentor can be the investor down the street who owns a half-dozen rentals and works a full-time job. You can join portals like BiggerPockets and learn from real investors who have built wealth specifically through rental property investment.

Rental Property Investment Can Be Simplified

Rental Property Investing

The first and foremost advantage of buying a rental property is that you get to simplify the process. Most of the investors interested in real estate are looking to generate a second income, not a second job. Doing it all by yourself takes a lot of your time, which otherwise can be saved by choosing a Turnkey rental property company that will do the heavy lifting for you.

Unless you have been investing in real estate for a long time, the odds are that turnkey operators have better rental property management experience than you do. They know how to deal with tenants and contractors, and they have a property management strategy that ensures routine rent collection and handling of any payment problems.

If you decide to buy a rental property on your own, you will have to do plenty of market research to decide on the best area to invest in. However, a good turnkey rental property company will know the sweet spots of the market by heart. They already know which markets are sustainable and good to invest in.

This experience takes plenty of time to build and having it will save you a lot of money as well as energy. These companies want to be in this business for the long term, so they make sure to sell the best rental properties to their clients. However, it is wise to hire your turnkey property consultant to cross-check their proposed ROI. You need to invest in markets where development is heading. The best rental properties are the ones that are well located and physically sound.

These companies can purchase properties such as REOs in bulk every month. They have good relationships with banks, close deals quickly with cash, and usually get better pricing than an individual investor. They also have their team for renovation work which will typically cost you less than hiring contractors on your own since they can buy materials in bulk.

To make sure your rental property is purchased and managed in the right way, you may have to have professionals such as contractors, brokers, loan officers, tax advisors, attorneys, appraisers, title/escrow agents, and accountants, which you may not be able to do on your own. Instead of it, turnkey providers already have ongoing relationships with all these professionals which saves your time and ensures your property is managed in the best way. They also have their contractors do the repair work. They can help you with financing as well.

How To Find Rental Properties For Sale Online?

Knowing where to find rental properties is an increasingly expensive challenge. Online databases are a great place to start your property search because they allow you to query and filter properties from all over the country based on specific qualities. Norada Real Estate Investments makes real estate investing easy. It helps you by finding your next rental property for sale with big data analysis supported by their investment experts.

We have exclusive off-market rental property deals in multiple markets in the United States. Sites like Trulia, Zillow, or Loopnet are good but there are some intricacies you need to know when searching on them. You need to find a diverse list of suburbs across the city and in different price brackets which have good transport, schools, lifestyle, high sales volume, and high percentage value growth.

If you are interested in buying rental properties and portfolios at this time, you can choose the Houston Housing Market. Houston has everything: the people, the diversity, the business climate, being world-renowned in energy, medicine, space, and manufacturing, and above all a booming real estate market.

Importance of Rental Investment Analysis

Once you have found a bunch of rental properties that you are interested in, it's time for analysis. Before buying the rental property, the real you should know if the property value in the market changes dramatically or not. There are several primary factors to consider, but cash flow and appreciation are the two most important variables in rental property investment.

Cash flow is simply the money left after all the bills have been paid, and appreciation is the equity gained as the property value increases. You need to crunch the numbers and figure out if it's a good investment. As an investor, you need to understand how to evaluate deals and opportunities. By far the most common mistake that we see new investors make with this strategy is buying bad deals because they simply don't understand property evaluation.

That's why analyzing nearby properties (comparables within a mile or two) is very important. Market “comps” determine the value of single-family homes. These comps or “comparables” are nearby properties with similar characteristics. They share variables like the floorplan, number of bedrooms and bathrooms, garage size, and amenities. A single-family investment home generally rises in value if a similar home is also rising in value and vice versa.

Other common problems include underestimating expenses, making bad decisions on tenant selection, and failing to manage properly. You need to learn how to figure out income, expenses, cash flow, and whether it's a good deal for you. You need to see what is tenancy type of the market. Is it a periodic tenancy or a fixed term of 6-12 months? A fixed-term rental property has a rent assessment at the end of every fixed term where rent typically goes up a percentage.

Know Your Area Before Purchasing a Rental Property

We recommend buying in an area that you are familiar with, at least for your first few properties as you get your feet wet. It could perhaps be your college town or your hometown. It helps to have some knowledge of the area. As a bonus, if you buy in an area that you visit anyway, your leisure travel can become at least partly tax-deductible because you will be adding a business component to those trips to check up on your property.

If you are not familiar with an area, try spending a few weekends in your target market over a period of months. Drive around in 2-3 zip codes you are interested in and talk to neighbors, local shop owners, property managers, etc. You'll need a network of local professionals to help you manage your property.

Understand Market Dynamics Before Purchasing a Rental Property

You need to think strategically when choosing and purchasing your rental property, and to work in line with both market trends and the general guidelines that dictate whether your investment is poised to succeed or not. Data and analyses can help you understand market dynamics such as — supply and demand, median home prices, median days on market, median rent prices, new construction, mortgage rates, and local economic indicators.

The most desirable rental markets for property investors aren't always in big cities. Investors prefer to buy property in growing markets having strong economic growth, low median housing prices, high rents, and low vacancy rates. You can also buy an out-of-state rental property without having to live in that state or handle the management.

This process also helps you as an investor to diversify your portfolio of rental properties. For example, if you live in New York City and cannot afford to buy a rental property, you can diversify your portfolio and still generate passive cash flows by buying rental properties in more affordable distant growth markets like Atlanta, Dallas, Memphis, or Indianapolis.

What is Buyer's Market?

In a buyers market, there are more homes for sale than there are buyers in the marketplace, so the housing market is favorable to buyers. For real estate investors, buyer's markets are the perfect time to buy an investment property because the negotiating power is on their side and they can easily move on to the next potential deal if a seller won’t agree to their contract terms.

What is Seller's Market?

In a seller's market, more buyers are looking for homes than there are homes available. In other words, there are many interested buyers, but the real estate inventory is low. Since there are fewer homes available, sellers are at an advantage as they are more likely to receive multiple offers (above their asking price).

Financing Your Rental Property Investment

You need to assess your current financial position to get a realistic sense of your budget and timeline for making your first rental property investment. Make sure you're financially fit before investing in rental properties. Most successful real estate investors build their investment portfolio through saving money and then gradually buying properties over the years. Going for a mortgage can help you quickly build your portfolio of rental properties.

Instead of putting all your savings into one rental property, you can contact lenders and borrow from them and buy multiple rental properties. Typically investors need to put 20% of their money as a down payment and the rest of the amount is covered by the loan amount. The best returns on real estate rely upon the use of credit to obtain the leverage of using other people's money. Pay attention to your monthly budget and make sure you have adequate insurance coverage as well.

5 Best Markets For Rental Property Investment

Single-family housing starts are expected to grow in 2022. On the whole, the market will remain seller-friendly, but buyers will still have relatively low mortgage rates and an eventually improving selection of homes for sale. We'll discuss 5 markets that are great for choosing your next rental property in 2022.

These markets also made the list of PWC's top 10 real estate markets for 2021. Since 2015 PWC has been publishing an annual report on “Emerging Trends in Real Estate®: US and Canada.” The report discusses the top 10 overall real estate prospects, powered by strong growth, homebuilding outlook, affordability, and job prospects.

Rental Property Investing in Raleigh, North Carolina

The Raleigh metropolitan area – the city and its surrounding suburbs – account for about one and a half million people. 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.

The cumulative appreciation rate over the ten years has been 47.67%, which ranks in the top 30% nationwide. This equates to an annual average Raleigh house appreciation rate of 3.98%, according to NeighborhoodScout.com's data.

Recent forecasts and predictions for the Raleigh housing market suggest that home prices will continue rising in 2022. Raleigh home values have gone up 6.6% over the past year and Zillow predicts they will rise 9.8% in the next year. In the latest quarter, Raleigh's appreciation rate has been 1.78%, which annualizes to a rate of 7.32%.

Median Property Price: $307,349 (Zillow)
An Estimate of Median Property Price After 12 Months: $337,000
Average Rent: $1,258, up 2% YTY (RENTCafe)
Renter-occupied Households: 43%

Rental Property Investing in Durham, North Carolina

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 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.

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.

Durham real estate appreciated 51.32% over the last ten years, which is an average annual home appreciation rate of 4.23%, putting Durham in the top 20% nationally for real estate appreciation. Recent forecasts and predictions for the Durham housing market suggest that home prices will continue rising in 2022. Durham home values have gone up 7.0% over the past year and Zillow predicts they will rise 9.7% in the next year. In the latest quarter, NeighborhoodScout's data show that house appreciation rates in Durham were at 0.71%, which equates to an annual appreciation rate of 2.86%.

Median Property Price: $269,287 (Zillow)
An Estimate of Median Property Price After 12 Months: $295,000
Average Rent: $1,201 (RENTCafe)
Renter-occupied Households: 43%

Rental Property Investing in Austin, Texas

Austin is second-ranked, with a positive outlook for all property sectors in general, specifically for multifamily and single-family housing. The local economy is strong with no shortage of available investment capital. Austin's high quality of life and a strong economy have the city once again leading the pack when it comes to population growth. New data from the U.S. Census Bureau shows Austin is fifth in the nation for the population increase in the past decade, with an increase of 177,079 people between April 1, 2010, and July 1, 2019.

The decade ending 2018 saw a 32.7% increase in population, and growth was 2.5% for the year ending July 2018. 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 2022, and this trend should continue in the coming years.

Austin real estate appreciated 97.02% over the last ten years, which is an average annual home appreciation rate of 7.02%, putting Austin in the top 10% nationally for real estate appreciation. Recent forecasts and predictions for the Austin housing market suggest that home prices will continue rising in 2022. Austin home values have gone up 12.8% over the past year and Zillow predicts they will rise 11.6% in the next year. Austin appreciation rates in the latest quarter were at 2.28%, which equates to an annual appreciation rate of 9.42%, according to NeighborhoodScout's data.

Median Property Price: $437,800 (Zillow)
An Estimate of Median Property Price After 12 Months: $488,000
Average Rent: $1,441 (RentJungle)
Renter-occupied Households: 48% (RENTCafe)

Rental Property Investing in Salt Lake City

Salt Lake City is witnessing a strong local economy. The next 5 to 10 years are expected to be an exciting time for tech in Salt Lake City —thanks to the tremendous growth of Silicon Slopes and Salt Lake City's business ecosystem. It has the winning combination of lower costs, great amenities, and top-ranked universities that provide the necessary workforce and incubators. 30% of the population is aged between 15 and 34.

Salt Lake City real estate appreciated 86.26% over the last ten years, which is an average annual home appreciation rate of 6.42%, putting Salt Lake City in the top 10% nationally for real estate appreciation. Recent forecasts and predictions for the Salt Lake City housing market suggest that home prices will continue rising in 2022.

Salt Lake City home values have gone up 11.2% over the past year and Zillow predicts they will rise 11.5% in the next year. Salt Lake City appreciation rates in the latest quarter were at 2.87%, which equates to an annual appreciation rate of 11.97%, according to NeighborhoodScout's data.

Median Property Price: $454,403 (Zillow)
An Estimate of Median Property Price After 12 Months: $506,000
Average Rent: $1,220 (RentJungle)
Renter-occupied Households: 48% (RENTCafe)

Rental Property Investing in Dallas, Texas

Dallas has a great outlook for the local property regarding industrial and single-family properties. The local economy and investor demand are also positive with good capital availability. The city is expected to have 87,000 new residents a year for the next 5 years and is projected to have a population aged 15-34 grow by 10.9%. The cost of doing business is 94% of the national average and the disposable income growth is 6.9%. The city also has strong healthcare and livability ranking. For a more in-depth review, click the link – Dallas Real Estate Market.

Dallas real estate appreciated 74.33% over the last ten years, which is an average annual home appreciation rate of 5.71%, putting Dallas in the top 10% nationally for real estate appreciation. Recent forecasts and predictions for the Dallas housing market suggest that home prices will continue rising in 2022. Dallas home values have gone up 6.9% over the past year and Zillow predicts they will rise 11.1% in the next year.

In the latest quarter, NeighborhoodScout's data show that house appreciation rates in Dallas were at 1.12%, which equates to an annual appreciation rate of 4.55%.

Median Property Price: $237,200 (Zillow)
An Estimate of Median Property Price After 12 Months: $263,000
Average Rent: $1,228 (RentJungle)
Renter-occupied Households: 42% (RENTCafe)

The US housing market has been on fire this year with record-low mortgage rates and a sudden wave of relocations made possible by remote work. Meanwhile, home prices have pushed new boundaries as buyer demand continues to surge. As we enter into 2022, housing market experts predict sales to grow 7 percent and prices to rise another 5.7 percent. If you need to explore more markets for rental property investment, here's our new article on the best places to invest in real estate in 2022.

Summary

One of the most commonly stated reasons that people give for investing in real estate is that they are seeking out financial freedom. Investing in rental property is an alternate path for seeking financial freedom. While active investors enjoy spending time on research and management, passive investors tend to have less time or simply do not prefer to be engaged in this tedious task; this is when turnkey rental properties become a great solution.

Rental properties are incredibly passive; they allow you to generate cash flows at distance, while other people who are specialized and professional do all the hard work for you. Whether you are a new investor, or a seasoned investor looking to diversify your portfolio or invest with no hassle, investing in rental properties is something you should not miss. Click on the link to know How To Buy Rental Properties With No Money Down.

Best Real Estate Websites For Buyers And Sellers In 2022

February 21, 2022 by Marco Santarelli

We’re not going to tell you where to go to find a real estate investment loan or good building contractor; you can find recommendations in those areas almost anywhere. Instead, we’re going to focus on the best real estate websites that make it easier to perform due diligence when researching properties and simplify the process of finding, vetting, and managing tenants. A website is a key tool you can use to find real estate for sale. They are also an ideal place to share listings if you are a seller or an agent because it makes it easy for potential buyers to search for homes.

According to the annual survey conducted by the NATIONAL ASSOCIATION OF REALTORS® of recent homebuyers, for 43% of recent buyers, the ﬁrst step that they took in the home buying process was to look online at properties for sale, while 18% of buyers ﬁrst contacted a real estate agent. The survey also shows that the share of home buyers who used the internet to search for a home increased to an all-time high of 97%. 64% of recent buyers were very satisfied with their recent home buying process.

According to global statistics consolidator Statista, real estate websites are visited more than 120 million times each month, with dominant players like Zillow racking up 36 million unique visitors monthly. This shows that real estate websites are becoming very popular on the internet day by day. They add value to buyers, sellers, and investors.

Buyers can preview hundreds of homes within a few hours from the comfort of their couch. Home sellers can also list their houses which can be viewed by hundreds of shoppers in the market to buy a new home. In addition to it, sellers can find out what their home is worth, look up the sale prices of homes in their area, read up on real estate market trends, and connect with top professionals in the field at the click of a button.

The best real estate websites are those that are easily searchable online, have high-resolution images and weekly market updates, and all the information necessary for buyers and sellers. The websites should have a well-organized menu and an easy-to-navigate layout where visitors can quickly find listings they might be interested in.

Some of these sites can help real estate investors as well who don't have much margin for error when their mistakes have multiple zeroes on the end. When you need to find properties that are a bargain at the buy, don't cost a fortune to fix up, and can be sold for a profit, it requires having the best possible information at every step of the way.

22 Best Real Estate Websites For Buyers And Sellers in 2022

Here is the list of the 22 best real estate websites in 2022 for buying, selling, renting, or managing real estate. These websites provide a plethora of unique features, tools, data analytics, and automated software for real estate buyers, sellers, investors, and landlords. Some new and unique real estate websites have been made into the list which you may or may not be aware of.

1. Best Real Estate Website – Zillow.com

best real estate websites: Zillow group — Pic Credits: Zillow.com

Zillow.com is one of the biggest and best real estate websites for people buying and selling homes. It is more than a website for letting you browse property listings, though its large MLS database is reason enough to make it to this list. It is unusual for letting you search specifically for foreclosures and newly built homes. We list it here because of its massive, free data sets. For example, it shows you historical home values for an area and projected property values by neighborhood.

It lets you see the average rents, too. They attract visitors by offering free advice on determining how much you can afford in rent and tips on how to fill out a rental application. Zillow has a large database of homes for sale or rent. This may let you find potential rental properties as well as learn the comparable rental rate for a neighborhood. In contrast, sites like Rentometer only let you estimate the rent for a given property. And Zillow helps you to find mortgage lenders, once you find a property you want to buy.

It can connect renters and landlords, as well. Furthermore, you should be checking the rental rates charged for comparable properties in the area so you don’t charge too much and have the property sit vacantly. If you want to find properties in a given area, the Zillow “make me move” feature is invaluable. You can find properties that aren’t officially on the market and make an offer. Zillow is free to buyers and sellers. It is a source to drive leads to the advertisers and makes money by charging advertising fees to agents, lenders, and other home service providers.

In addition to the for-sale and rental listings on Zillow.com;

Zillow now buys and sells homes directly through Zillow Offers, helping people move with less hassle and more control.
Zillow Home Loans, Zillow’s affiliated lender, provides mortgage pre-approval and financing.
Zillow Closing Services, Zillow’s affiliated title, and escrow provider offer title and closing services.
Zillow Premier Agent offers support through a trusted network of real estate professionals.

Zillow's consumer brands include Trulia, StreetEasy, and HotPads.

best real estate website zillow group — Pic Credits: Zillow.com

2. Best Real Estate Website – Realtor.com

best real estate websites — Pic Credits: Realtor.com

Operated by Move, Inc., Realtor.com® offers a comprehensive list of for-sale properties, as well as the information and tools to make informed real estate decisions. It comes to our list of the best real estate websites because they provide a variety of valuable information. For example, it provides a quick snapshot of local markets like the median sale price and average price per square foot so you can estimate what a house is worth on the market in good condition.

It can show you the properties that just hit the market and the ones that have sat for months, nearly guaranteeing the sellers will take any reasonable offer. If you identify good prospects, the site can connect you with their real estate agent so you can arrange a tour. It also offers homeowners a bevy of useful tools and resources through the My Home℠ dashboard.

This dashboard allows property owners to manage their homes like the important investment it is by tracking their home’s value over time, researching and managing home improvements, and scouting other similar properties in the neighborhood.

While this site isn’t the best one for listing a rental property, it should be on the list of sites where you add your newly available rental to maximize the number of possible tenants who see it. Realtor.com earns money primarily through advertising fees. The app and website are free to buyers and renters.

Here’s what you can do with Realtor.com

ListHub: It helps you compete for listings by maximizing your online exposure across a network of 750+ real estate websites, including options for international exposure.
EssentialsSM Toolkit: With more than a million agents working nationwide, this toolkit from realtor.com® helps you rise above the crowd. It’s a powerful way to begin building your brand and business online.
ConnectionsSM Plus: It is a complete lead generation system to get you in front of serious local buyers searching on realtor.com®. Receive high-quality buyer leads and the tools you need to respond quickly, make a connection, and keep them engaged throughout the process.
Market Reach: It creates automated, professionally-designed real estate ads to showcase your listings, brand, and community on Facebook and Instagram and then targets active and engaged home shoppers to help you fuel your pipeline with quality leads.

3. Best Real Estate Website – Redfin.com

Redfin is a real estate brokerage. The Seattle-based company was founded in 2004 and went public in Aug. 2017. Glenn Kelman is the CEO. Redfin's business model is based on sellers paying Redfin a small fee. The company claims that Redfin Agents close 3x more deals, so they have the experience to help you sell your home for top dollar.

As a seller, you can get more out of your home equity by selling for more in a hot market and a low listing fee. Through Redfin.com, you can give buyers an online interactive view of your home with no need for in-person viewings. They’ll promote your home with email campaigns, premium placement across Redfin.com, and social media ads.

Redfin has deepened its technology beyond the initial search to make the home tour, the listing debut, the escrow process, the whole process, faster, easier and worry-free. They have given customers more value, not just by saving each thousand in fees, but by investing in every home we sell, by measuring our performance and improving constantly.

This real estate website strives to develop technology that improves the process of buying and selling a home every step of the way. Here are some of the best features.

Redfin Estimate: It is a calculation of the market value of an individual home.
Redfin App: Peruse thousands of homes for sale, get detailed information on each and even schedule a home tour directly from the app.
Draw Your Own Search: On the Redfin iPhone app, draw a line around the exact area where you want to search for homes.
Redfin Home Dashboard: A comprehensive online resource for home sellers that provides real-time data on their homes.
Offer Insights: Real-time statistics and notes from Redfin agents about thousands of offers submitted on behalf of Redfin clients.
Redfin Hot Homes™: Informs Redfin users if a home is likely to sell in two weeks or less
Search by School: This shows all the homes for sale served by a certain school with one easy search.
Redfin Affordability Calculator: Provides an estimate of how much a homebuyer can spend on a home based on their location, income, down payment, and monthly debt.

4. National Association of REALTORS® (NAR)

best real estate website NAR — Credits: NAR Logos and Trademark

The National Association of REALTORS® is America's largest trade association, representing 1.4 million members, including NAR's institutes, societies, and councils, involved in all aspects of the residential and commercial real estate industries. Their members include residential and commercial brokers, salespeople, property managers, appraisers, counselors, and others engaged in the real estate industry.

NAR also functions as a self-regulatory organization for real estate brokerage. The organization is headquartered in Chicago. The association has its code of ethics to which it requires its members to adhere. N.A.R. members belong to one or more of approximately 1,200 local associations/boards and 54 state and territory associations of REALTORS®. As of 2020, the NAR has over 1.38 million members worldwide, including 600,000 members in the United States.

One of the biggest advantages of using their website is the detailedness and authentication of housing data. They provide the latest real estate research and statistics that affect the industry. NAR governs the hundreds of local Multiple Listing Services (MLSs) which are the information exchanges used across the nation by real estate brokers. However, many MLSs are independent of NAR, although membership is typically limited to licensed brokers and their agents.

Research Reports: They do research on a wide range of topics of interest to real estate practitioners, including market data, commercial, international, home buying, and selling, NAR member information, and technology. There is a research division that collects and disseminates real estate data and conducts economic analysis to provide knowledge of the latest trends and statistics. Delivery of this information takes place via press releases, reports, presentations, and daily blog posts about the overall economy and housing market.

Housing Market Statistics: NAR produces housing statistics on the national, regional, and metro-market levels where data is available. National and regional housing statistics include existing home sales, pending home sales index, and the housing affordability index. The organization releases existing home sales monthly, providing national and regional price and volume statistics.

State & Metro Area Data: Here you can find real estate data for the state and metropolitan statistical area (MSA) in which you live and work.

Commercial Research: In this section, you can find “The annual Commercial Lending Survey,” which provides insights into REALTORS®' commercial financing conditions. The report details liquidity conditions, market impact, funding sources, and respondents' comments.

The organization also works to protect private property rights, promote homeownership, and lobbies to maintain reasonable credit and other standards at the federal level.

5. Best Real Estate Website – Trulia.com

Best real estate website: Trulia

Trulia is a consumer brand of the Zillow Group. The company goes beyond the typical listings, by sourcing insights straight from locals and offering over 34 neighborhood map overlays, to give people a deeper understanding of what living in a home and neighborhood is like.

It also provides a transit score for each property, a value that allows to you identify properties that people who don’t want to own a car will pay a premium for. The ranking of properties by their popularity should be seen as market research.

Know which property types or areas are seen as desirable, but don’t get into a bidding war on “hot” properties. You can explore neighborhoods on Trulia by browsing original neighborhood photos, drone footage, resident reviews, and local insights to see if the homes for sale are right for you.

Here’s what you can do with Trulia.com

best real estate website trulia — Credits: Trulia.com

6. Best Real Estate Website – Neighborhoodscout.com

best real estate websites: Neighborhoodscout — Pic Credits: Neighborhoodscout.com

Neighborhoodscout.com gives you the most accurate, comprehensive, neighborhood-specific crime, demographic, housing, school performance, and real estate trend and forecast analytics available today, with seamless coverage for the entire United States. Scout Vision™ Trends & Forecasts offer the most timely and accurate home price and home appreciation rate predictions for every micro-neighborhood in the U.S. With this comprehensive information, an investor can easily decide whether to buy, hold, sell, or lend on their property.

It reduces the amount of time spent searching for real estate by pinpointing the locations that best meet your specific criteria. As a paid user you get predictive analytics and exclusive data and insights for every neighborhood and address in the United States. It's unique in the way that it reveals the details about every Neighborhood in the U.S., address by address.

Here’s what you can do with Neighborhoodscout.com

Crime Data: NeighborhoodScout Crime Analytics uses hundreds of sophisticated spatial algorithms to process 9 million+ reported crimes into nationally-comparable crime data of unprecedented accuracy, with complete coverage for every neighborhood and address in America.
Demographics: NeighborhoodScout Demographic Analytics derive insights from hundreds of raw inputs to produce one-of-a-kind data patterns for population, migration, lifestyle suitability, walkability, cultural character, education, incomes, ages, employment, diversity, and more. Indexed against national averages for comparison.
Real Estate Data: NeighborhoodScout Real Estate Analytics provides the only micro-neighborhood housing market insights with exclusive market rent prices by the number of bedrooms, house values, property taxes and effective tax rate, years of average rent needed to buy the average house, housing stock profiles, physical neighborhood setting, seasonal and year-round vacancy rates, owner/renter mixes, and more, all in one place.
Public School Ratings: NeighborhoodScout School Quality Ratings provide the only nationally-comparable school quality rating available today. Promotes easy benchmarked comparison of school quality between schools, school districts, property addresses, and neighborhoods in any state or location.

7. Best Real Estate Website – Rentcafe.com

Rentcafe.com is a website prospective tenants will visit to understand the market rates for rent in given areas. You’ll learn what your prospective tenants expect to pay in various communities, which neighborhoods have a reputation for affordability and their expectations regarding lease terms. For example, this site informs them what they should expect to pay for utilities or how much more they’d pay for a lease that includes utilities.

Rentcafe is immensely helpful for renters as well. You can search for all types of apartments and also calculate how much rent you can afford. You can use their rent calculator to figure out how much you could spend on rent while keeping your finances in check. The calculator multiplies your gross monthly income by 20%, 30%, or 40%, based on how much you want to spend. You can use the slider to change the percentage of your income you want to spend on housing.

If you use the additional options, it deducts rent from your income and subtracts your debt, expenses, and savings from the remaining money, depending on which fields you filled in. The final number represents the money you have left to spend per month. The share of your income that should go towards paying your rent depends on many factors, the most important ones being your income level and where you want to live. Their rental income calculator starts with 30% as a standard for how much of your income you should set aside for rent.

They also have a Mobile App where you can check out listings posted by property managers and contact the property straight from the RENTCafé App – no intermediaries!

Here’s what you can do with RENTCafe.com

best real estate website rentcafe

8. Best Real Estate Website – Nolo.com

Nolo.com is a legal resource that every landlord should be referencing if they don’t have a lawyer to consult. This website can provide information you can’t do without such as the terms you must abide by in a lease written for a specific state, how you must handle deposits, and the rules you must follow if someone is late with the rent.

For example, the website shares the legal disclosures landlords must provide every tenant when you search for the regulations that apply to landlords in a particular jurisdiction. You can quickly check to see when and for what reasons a tenant can withhold the rent and when they can deduct repairs from the rent.

9. Best Real Estate Website – eRentpayment.com

The website eRentpayment.com provides several services that landlords can appreciate. One service the website provides is tenant screening. You can ask them to fill out online applications instead of dealing with paperwork. Through the eRentpayment.com portal, they can submit credit checks and background checks. Many landlords will appreciate the eviction report that tells you whether they’ve been evicted in the past few years.

Another service it provides is online payment processing. You can use the site to receive rental payments from each tenant, and it will send them automatic reminders if they are approaching the due date. You can customize late fees so that the late fees are charged at a unique level by property. The site charges only a few dollars per month rent payment to collect the payment and send it to you as well as generate the receipts for everyone involved that rent was, indeed, paid.

Many tenants will appreciate the fact that the site tracks rental payments to credit reporting agencies, allowing them to improve their credit by paying you on time. The site even allows your tenants to submit maintenance requests, whether you handle the issues themselves or route them to the appropriate contractor.

10. Best Real Estate Website – Mysmartmove.com

Best real estate websites: Mysmartmove — Pic Credits: Mysmartmove.com

Mysmartmove.com is a site solely for background checks and credit checks of potential tenants. The basic package does a credit check against Transunion’s database and pulls a National Criminal Background Report. The “Plus” package adds an eviction report. The “Premium” level includes a full credit report and estimates their income.

When you ask a prospective tenant to submit data for the report, you’re sending the link from Mysmartmove to them. They fill out the necessary details and you receive the reports. They can be required to pay for the screenings to have the report submitted to you. This eliminates the need to process application fees, and you won’t be handling their sensitive information.

Complaints about the site are that up to a third of applicants don’t complete the background checks, but these may be the prospective tenants who don’t want you to know that they have had prior arrests or evictions. The only caveat here is that not every state feeds arrest reports to their system.

You should require a background check of every adult in the household to get an honest assessment of the family since one partner may have clean credit and a criminal record but the other has been arrested and/or evicted.

11. Best Real Estate Website – The Local Tax Appraisal District Website

The United States has fifty states and thousands of local taxing jurisdictions. The local tax appraisal website provides a wealth of information to prospective landlords and property buyers. For example, data mining tools mine these sites to find people who own more than one home. Letters get sent to their primary residence with offers to buy the other properties they own.

While some of these offer letters go to landlords who don’t plan on selling, they can drum up leads in the form of people who didn’t plan on leaving their old residence but had to do something to pay the bills. This periodically results in turnkey properties that already have tenants in them being offered for sale.

These websites yield other information, as well. Are there tax liens against the property? Are there mechanics liens or a mortgage against the property? This can give you an idea of what legal mess needs to be untangled before you make an offer. What does the county or city say it is worth?

A property can certainly be worth less than this estimate because it is in dire need of repair, but the tax district’s appraised value gives you an idea of what the authorities will use as the basis for your property tax bill unless you make a good case it is worth far less.

12. Best Real Estate Website – MLS.com

best real estate websites

MLS.com is a free MLS search to find real estate MLS listings for sale by Realtors® and other realty professionals that are members of your local MLS Multiple Listing Service. MLS.com also features real estate news, common real estate questions and answers, real estate classes, mortgage information, and a mortgage calculator.

Find homes for sale, new homes and resale homes, new construction, acreage, lots, land, commercial property, and investment property. The company helps make it quick and easy for you to search and find real estate located all across the USA through its advertised real estate agents’ websites.

MLS.com can help you find providers of many of the services needed in a real estate transaction. The real estate website features some of the best-known and most respected names in real estate.

13. Best Real Estate Website – NoradaRealEstate.com

best real estate websites

Norada Real Estate Investments is a premier real estate investment firm providing investors with quality new and refurbished investment properties in growth markets throughout the United States. Founded in late 2003, they were the second nationwide provider of turnkey real estate – with properties as far south as Florida to as far north as Michigan.

Inc. Magazine ranked Norada Real Estate Investments as #925 on its annual list of the top 5000 fastest-growing private companies in America. The list represents a unique look at the most successful companies within the American economy’s most dynamic segment — its independent small businesses.

Norada Real Estate Investments helps take the guesswork out of real estate investing. By researching top real estate growth markets and structuring complete turnkey real estate investments, they help you succeed by minimizing risk and maximizing profitability.

It offers investors fully refurbished as well as new construction residential properties ranging from single-family homes on up to fourplex multi-units. Their properties make sense the day you buy them. There is nothing that needs to happen for the property to be a good wealth-building investment. You can contact one of their Investment Counselors to ask any questions, or to discuss your investment goals.

14. Best Real Estate Website – Homes.com

Homes.com is also one of the best real estate websites where you can find all that you need to know about every phase in the home buying, selling, renting, and financing process. They’ve also compiled everything you need to know about how to rent a home – things to consider when renting a home-like choosing which amenities are important, what’s your rental budget and how to calculate the costs of homeownership, understanding your rental agreement, and how to do a rental property walk-through.

With their finance section, they’ve created some money-saving tips and advice to make the process a little easier while helping new homeowners and those looking to refinance get familiar with their financial capabilities.

You’ll also find useful information regarding how to understand your credit and what type of credit score you need to buy a home in addition to how to improve it. You can also find details about the components of a mortgage including the types of mortgage rates, how to understand mortgage down payments, and the steps to getting pre-approved by a lender.

15. Best Real Estate Website – Auction.com

best real estate websites auction.com — Pic Credits: Auction.com

Auction.com is the nation's leading online real estate marketplace offering over 30,000 discounted residential bank-owned and foreclosure home deals. It is also one of the best real estate websites which can help you reach your real estate investment goals by offering the largest selection of residential bank-owned and foreclosure homes. Auction.com’s marketplace has streamlined distressed property transactions for buyers and sellers.

With the help of technology and data science, they have created an unrivaled transaction platform that has resulted in $39 billion in sales, 4.4 million registered buyers on Auction.com, 329,000 properties sold to date, 30,000 properties available for sale, 1,000+ employees serving the needs of buyers and sellers, and more than 15,000 auctions per year in all 50 states.

The buyers can bid and purchase properties using their superior technology platform. Buyers can receive convenient access to property information, exclusive inventory, personalized property matches, onsite and online education, and customer support throughout the entire process. The sellers receive the nation’s largest and most reputable auction programs, an unrivaled marketing reach, and data intelligence and insights to move assets quickly.

16. Best Real Estate Website – Curbed.com

Since 2004, Curbed.com has been an integral part of the local news landscape online. They are uniquely primed to surface relevant local issues to a broad, national audience. Unlike a glossy shelter magazine, they see homes, streets, neighborhoods, and cities as inextricably related. Curbed.com covers 14 American cities, while their flagship site covers every place (and trend, and big idea) in between.

If you love where you live, chances are you feel as strongly about the new park on your corner as you do about your lack of a dishwasher or the sustainable properties of a concrete building in the desert. Curbed.com got you covered across 12 American cities, while our flagship site covers every place (and trend, and big idea) in between.

17. Best Real Estate Website – Activerain.com

Active Rain is a site similar to Bigger Pockets. It has more than three hundred thousand members. It is a real estate blog perfect for those who want to network with other real estate professionals, and they claim the world’s largest storehouse of real estate knowledge with over 4 million blog posts on all things real estate.

It was designed specifically to suit the needs of the real estate industry, especially for those who are interested in blogging for business within the real estate industry or for consumers seeking real estate knowledge. This real estate site includes real estate agents and mortgage brokers. There are new real estate investors and established ones.

There are thousands of blogs by real estate investors, agents, and brokers. You can find articles on how to qualify for a commercial real estate mortgage to advise on cleaning up a hoarder's house. Their blogs include built-in lead capture systems, social sharing tools, SEO structured content, and the ability to post your blog on a website with extremely high domain authority.

18. Best Real Estate Website – Popstream.com

best real estate website Propstream — Pic Credits: Propstream.com

Popstream is a paid-access site. Its biggest benefit is allowing you to find distressed home sellers. The database can feed you leads from foreclosures, liens, and tax sales. You can compare this data to the MLS to find people who need to sell a home before it goes to foreclosure or those who probably need to sell to settle a divorce. There's far more information than a dedicated site like Foreclosure.com.

It offers more information than average on outstanding mortgage balances and lets you estimate the existing equity based on the property's estimated value. The website can help you create lists of potential properties for purchase and then send emails or letters to them. The website advertises its ability to help you research properties as you're “driving for dollars”.

The Popstream mobile tool lets you track where you drive so you don't canvas the same area. And it lets you pull up data on the home right in front of you. PropStream offers its full-featured software access for a monthly cost of $97. For active real estate investors, profits from one deal found using the PropStream real estate software can wipe that cost out.

According to PropStream—Is The Only Professional Tool That Gives You The Data Software And Analytics To Solve Real-World Problems Across The Entire Country!

19. Best Real Estate Website – This Old House

There are plenty of projects best left to the professionals such as fixing that constantly flipping breaker or a plumbing problem. However, you may be able to fix any little issues yourself. This is where the website “This Old House” comes in. They show you how to fix many issues from stuck doors to leaking garbage disposals.

They provide information so you know when you need to hire a pro. They also give you the information you need to vet contractors, so you don't accidentally hire a fly-by-night operation. A side benefit is that you may save significant time and money repairing your own home.

For example, you can get a complete guide on what you need to know before putting a metal roof on your own home—the versatile looks, longevity, and peace of mind that come with a roof made of metal. The company serves over 15 million consumers each month with trusted home improvement information and expert advice.

The company boasts the two highest-rated home improvement shows on television in This Old House and Ask This Old House, the highly regarded This Old House Magazine, and a robust digital business at ThisOldHouse.com and across a myriad of platforms including social, podcasting, app, YouTube, and free ad-supported digital television. The brand continues to resonate with audiences across the world, as detailed by The New York Times, Salon, and The Atlantic.

20. Best Real Estate Website – SparkRental.com

best real estate websites: Spark Rental — Pic Credits: Sparkrental.com

SparkRental is one of the best real estate websites for landlords. It offers property management software services through the web portal. These tools are perfect for landlords with one to fifty rental units. For example, you can use their site to run background checks and credit reports. It lets you collect rent online or create state-specific leases.

You can report their rent payments or non-payment to credit bureaus. You can track expenses. One point in favor of SparkRental is that you can compare prices for services like HVAC repair and roof replacements against their price tables. The site has some content on real estate investing and property management.

However, they made our list of the best real estate websites because of their property management tools. From posting your vacant rental listings to many websites with one click to fast & easy tenant screening to powerfully-protective leasing documents, they have you covered. Their ongoing property management software includes online rent collection, expense tracking and ledgers, simple (and recorded!) communications with renters, property photo and legal document storage, and much more.

Here’s what you can do with Spark Rental

best real estate site

21. Best Real Estate Website – Stessa

Stessa is an alternative to SparkRental, though it has a few unique tools in its portfolio. Stessa helps rental property owners easily track, manage, and communicate the performance of their investments. As investors themselves, they created Stessa to easily keep track of property performance, finances, and the paper trail that comes with real estate investing–in one place.

The best thing about Stessa: Stessa is 100% free. Their goal is to provide powerful tools to the investor community at the lowest possible cost. That being said, they do offer optional, premium services for real estate investors for a fee, to assist with things like rent analysis, mortgage financing, and market research.

They allow investors to track the financial performance of individual properties and your real estate portfolio as a whole. This is similar to Quicken letting you see the total year-over-year return on your stock portfolio while allowing you to see the returns for each investment. Stessa provides many rental real estate management tools.

For example, you can connect payment accounts and property management accounts to Stessa. Now you can pull up a report and see who hasn't paid the rent this month out of your 40 tenants, or you could see who has a history of making late payments. Stessa is unusual among real estate websites for letting you create custom reminders and reports. Set up a notification that the tenant is late for the second time so you can file for eviction. Or let it give you personalized recommendations based on your unique real estate portfolio.

Here’s what you can do with Stessa

real estate website Stessa

22. Best Real Estate Website – Land Watch

Most real estate websites are aimed at those who want to buy or rent out existing housing stock. What if you want to invest in a piece of land? You might want to buy it to develop it, or you may hope to resell the property later. LandWatch is one of the best real estate websites for finding raw land. It is the leading and largest site dealing in rural properties, land for sale, hunting land, farms for sale, ranches, log cabins, development sites, and homesites for vacation, recreation, or investment purposes.

Furthermore, it allows you to find properties that are bank-owned (think: bargain basement prices) or have owner financing. In the latter case, you don't have to worry about qualifying for a bank loan. Another benefit of LandWatch is that it periodically hosts land auctions. While Land Auction is primarily raw land, you can also search for commercial real estate. You can also advertise on their platform and reach land buyers searching for property across their network of leading rural real estate websites: LandWatch, Lands of America, and Land And Farm.

Summary

Anyone can search the MLS or read a thousand entries on Craigslist. Use the best real estate websites to find properties, sell them, and manage them in the interim. No one website provides all of the information you need, not even when they are theoretically competing with each other. Use the information that these best real estate websites provide so that you can perform thorough research on any prospective house or investment property before you make an offer.