How To Make Money In Real Estate And Get Rich In 2021?

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There is no shortcut to make money or get rich quickly in real estate, but you can slowly and steadily build wealth by investing wisely. You would know that there are many different ways to become rich but real estate is one of the best ways to build wealth. Having said that, making money in real estate takes the right advice, systems, and determination. Investing in real estate stands out as a tried and tested approach to make money but like every other business, it has some risks associated with it.

If done the right way, real estate can be a great source to build wealth if you take the time to educate yourself about the process and the best ways to get great returns. If you have cash (a 20% down payment), it's much easier to get started in real estate investing. But the truth is many entrepreneurs start their businesses – including real estate investing – with very little money every day. Many of them just get off the ground by dreaming big and putting in a lot of effort.

This article has been written for beginners who want to know how to make money in real estate. Today, there are numerous options for investors to invest in real estate; there is no one-size-fits-all answer. One of the finest ways to diversify your portfolio is to learn how to generate money in real estate. If you have a lot of money, you could, for example, buy an undervalued real estate property, fix it up, and sell it to an investor. You profit from the sale of the property for a considerably higher price than you paid for it after the work is completed.

You can also consider buying a long-term rental property or a second home where you vacation and rent out to others when it's not in use if you'd rather leverage your investment by using a mortgage to invest in a tenant-ready property. With the right steps, you can increase your wealth, hedge against inflation, and profit from a rising market. There are so many advantages to owning real estate like leverage, appreciation, tax benefits, that just getting a “good deal” can make for a great long-term investment.

We'll show you how to make money in real estate, and avoid the most common mistakes. The most popular way is to buy an investment property and slowly build up your portfolio. Generally, there are two primary ways to make money from real estate assets — appreciation, which is an increase in property value over a period of time, and rental income collected by renting out the property to tenants. The majority of the money & wealth you build through real estate comes from appreciation but cash flow is important because it helps in reducing your risk.

Buying a rental property that loses money every month in hopes of a future appreciation is a bad investment. The positive cash flow doesn't only enable you to pay off the property but it also contributes to saving for another down payment to buy your next investment property sooner. The more properties you buy, the more you can save, and the faster you can achieve your money-making goals through real estate investing.

But we shall discuss some more “well-known” ways to make money in real estate which include both active and passive investing. Remember, knowledge is the key to using real estate as a vehicle for wealth building. Smart investors always know what drives markets, how to time market cycles, and whether to invest in a local market or to invest out of state.

10 Ways To Make Money In Real Estate And Get Rich

How To Make Money In Real Estate

Investing in real estate can add diversification to your investment portfolio. In this article, our focus will be on how to make money in real estate through different means. Are you excited? There are multiple ways to begin growing your wealth by utilizing real estate. Let's get started and see how you, too, can become a successful real estate investor.

1. Making Money in Real Estate Through Rental Properties

This is the classic way of making money in real estate and getting rich. In this type of investment, you make money by leveraging long-term buy-and-hold residential rentals. People will always require a place to live. Lords and nobles fought over titles that let them collect rent from those living, farming, and otherwise working the land. A few entrepreneurial types drained swamps and built businesses so that they could make more from the land than they would if they merely leased it out to farmers and ranchers.

We’ve come a long way in the intervening ways, providing many options for those who want to know how to make money in real estate. You may buy land, build a home, and then rent it out. You could find distressed properties, rehabilitate them, and then rent them out. Turnkey properties were purchased by someone else who rehabilitated them before finding a tenant. Regardless of how you acquire the property, it is a buy and holds strategy.

You can own residential, commercial, and industrial real estate property. One of the biggest benefits of owning rental real estate is the steady cash flow it generates. It is the best form of owning investment real estate for earning a passive income. The downside of this approach is that you’re putting all your eggs in relatively few baskets. If there are issues with the apartment complex you own, the rental income from it suffers as people leave or the repair costs eat into your profits.

This strategy is probably the one most likely to let you generate a steady income that is large enough to live off of once you own multiple rental properties. You may be able to utilize this strategy if you cash out money from a retirement account or equity in your home. If you want to know how to get rich in real estate, understand that this is one of the most secure routes to doing so as long as you manage expenses and the properties themselves well. Dallas is a very good real estate market for buying rental properties.

Know the rules for evicting tenants and raising rental rates if you’ll be managing an apartment building. Understand the local building code, community norms for properties in the price range you’ll be buying, and cost-effective upgrades if you’ll be buying and flipping properties.

You can’t afford to lose money turning a middle-class home into the only luxury property on the block. All of this requires the money to buy the properties. We’d recommend saving up or tapping into funds you have to put down the first down payments on single-family homes or small multi-family housing units. This may come from your savings, equity in your primary residence, or a retirement account.

We’d recommend against borrowing against your 401K since the money has to be paid back within a few weeks of losing your job or else you have to pay taxes and a penalty on it. You’d almost be better off pulling money out of an IRA. You have more control over the fees and taxes you’d pay. Set aside thousands of dollars in an emergency fund to cover unplanned repair bills, surprise legal fees, and other costs you haven’t properly taken into account.

Then you don’t end up cutting into your cash flow with high-interest hard money loans to pay for the little repairs needed to legally rent out the unit or hit your credit cards to pay contractors. Buy a single property with your cash down payment, a mortgage, and your business plan. Set the goal of renting out the unit for 1 percent of its total value per month.

For example, a 100,000 dollar house should rent for around a thousand dollars a month. Then apply your strategy. Sell the fixer-upper or collect the first few months of rent from your new tenant. Rebuild your emergency fund, since you may need thousands of dollars to fix a broken water heater or hole in the roof. Save up enough money for your next renovation or down payment.

Then seek a mortgage to buy that next property and repeat the pattern. Don’t rush out to buy a bunch of properties. Debt multiplies risk, and you don’t want to end up with a million dollars of outstanding unsecured debt because you tried to manage ten rental properties without any experience as a landlord. Nor can you afford to make a mistake with a property management company. Don’t try to fix and flip several properties at once. Grow slow so that you have the margin to absorb the cost of mistakes.

This is why you should be buying one to three rental properties a year, not the ten some property investment programs recommend. Buy and flip one property at a time, no matter how long that takes, until you have the expertise or expert contractor on your team to handle several such renovations at once. Buy a small apartment building and learn how to manage it or find a good property manager to do the work for you.

Remember that every month results in increased equity in the property, and that’s aside from the income you’re earning. You could dramatically improve the cash flow if you aggressively pay down the outstanding mortgage on a property. For example, you go from earning 300 dollars to 1000 dollars per month per single-family rental home.

What is a property that turns out to need far more work than you expected? What if the apartment building isn’t working out as expected? Sell it, pay off the debt, and then start over with the cash you have leftover. You will eventually be making millions in real estate as you build up your real estate portfolio, and you could see a million-dollar net worth in less than five years.

If you own dozens of rental homes, consider selling them to buy professionally managed multi-family housing. When you’re ready to earn truly passive income, that is one route. Selling the properties to other investors and investing in real estate investment trusts or shares of a property managed by others is another.

2. Interest-Based Income Through Investing in Mortgage Notes

Mortgage notes can be a good real estate investment for people seeking passive income. When you buy a mortgage note, you receive monthly payments that include both interest and principle. It is a steady stream of income like you’d receive from a rental property, but there is no need to maintain the property like a landlord. It is far easier to invest in real estate located around the country because you don’t have to deal with local rules regarding real estate licensing or taxes. The mortgage note spells out the loan duration. You know how long you’ll receive loan payments, and it may be 10 to 30 years.

You may be able to increase the value of the mortgage note by buying from a distressed note holder. For example, you may find a farm or family property sold via owner financing. The person sold their home, but now they have to manage the loan. They may need the money, whether it is to allow them to buy a new home or simply get cash to fund their retirement. In these cases, you might offer 80,000 dollars to buy a 100,000 dollar note. If they accept, you receive the interest and principal on a 100,000 dollar loan but only paid 20,000 dollars for it.

Another class of desperate sellers is the private lender with a slow or non-paying borrower. They’re not getting the income they expected. They may be reluctant to foreclose on a slow-paying family member. Or they may not want the property back. You can buy these notes for far less than their face value. However, you’re going to either need to ramp up collection efforts or foreclose on the property. Only buy notes like this if you have a plan for how to monetize the property, whether you rent it out, sell it to someone else or redevelop the property.

3. Getting Rich By Flipping Real Estate

This is another proven way to make quick money in real estate to get rich. Fix and Flip is a specific form of real estate investing. The investor buys a home, pays for repairs and renovations, and then sells the property for a profit. This type of real estate investing is the subject of numerous reality shows. The reality is that this form of real estate investing is high risk. If you’ve underestimated rehabilitation costs, you could lose money.

If you put too much money into the investment property because you don’t understand your target market and buyer expectations, you’ve probably wiped out your real estate profit margins. Whether there are problems with the selling price, the real estate agent, the neighborhood, or how the property looks, every month the house sits on the market subtracts the property’s carrying costs from your profit margin.

If you try to do the repairs yourself to save money, the theoretical savings on labor costs are offset by the delays in getting the property to market. If you’re not already a skilled building contractor, there is a risk that DIY repairs don’t meet code or potential buyers’ expectations. Then you may lose everything on the deal because you have to pay for someone else to redo what you thought was done. The ideal fix and flip is a property that only needs cosmetic repairs, but these are truly rare.

4. Making Money Through Real Estate Investment Trusts

Real Estate Investment Trusts or REITs allow you to invest in real estate without having to buy and manage a property. REITs may be invested in mortgages, properties, or a mix of both. You can diversify your holdings in real estate by buying REITS invested in particular market niches. Because REITs are publicly listed, you can buy and sell shares on the open market, making your money more liquid and allowing you to diversify your investments. One of the benefits of REITs is their non-correlation with other types of equities.

This means that the value of REITs depends on the real estate market, not the stock market. REITs are available in publicly traded and non-traded forms. The Securities and Exchange Commission recommends against non-traded REITs due to their high fees, the challenge of liquidating them, and the risk they may become worthless. Publicly traded REITs are as liquid as stocks and bonds. REITs stand out for their regular payment of dividends, something that a decreasing share of stocks offers anymore. Clearly, this also shows a way to make money in real estate and get rich.

5. Making Money Through Real Estate ETFs and Mutual Funds

You can buy exchange-traded funds (ETFs) and mutual funds that are broadly diversified or targeted to a particular sector. And you can buy ETFs and mutual funds that are themselves invested in real estate. For example, it is possible to buy ETFs that invest in real estate stocks such as publicly traded home builders. Some ETFs invest in REITs, as well. There are mutual funds that invest in real estate developers and property management firms. Both investments are handled by a fund manager (ETFs are passively managed, and mutual funds are actively managed).

ETFs are less expensive than mutual funds, and you can trade them like stocks at any time during market hours. The benefits of investing in ETFs and mutual funds include high liquidity and low costs. Forget cashing out your 401K or 403B plan to buy rental real estate, since this strategy allows you to invest in real estate within tax-advantaged retirement accounts. You don’t need a lot of money up front to start investing this way. Conversely, you may not receive dividends. You may not receive any returns until you sell the appreciated shares.

6. Using Private Lending To Making Money in Real Estate

Hard money lenders loan money to those utilizing the fix and flip strategy. They may lend money to those buying a property to renovate and then rent out; the property investor, in this case, would secure a traditional mortgage after they have an attractive property bank will now consider as collateral. Acting as a bank to property buyers yields a higher rate of return than you’d see if you left money sitting in the bank. You have to do your due diligence since mistakes could mean you don’t have a valid lien against the property.

For those not yet ready to invest a large sum into a single project, crowdfunding is an option. You can loan money to someone who wants to buy a rental property or secure a down payment on their own home. In either case, the loans are high-risk and illiquid. Another issue is that hard money lending of more than modest means that SEC rules apply. If you don’t meet the income and net worth requirements set by the SEC, you may not be allowed to loan money to real estate investors unless it is in token amounts through a crowdsourcing site.

7. Increase In Wealth Through Real Estate Appreciation

When the value of a property increases, we call this “appreciation.” While appreciation is not always guaranteed but historically real estate prices have appreciated over the long term. So, again, appreciation alone is not likely going to make you a millionaire but real estate has always increased in the US, averaging 3% per year over the past century. For example, if you purchased a property for $250,000 2 years ago, and today that property is worth $350,000, the appreciation made you $100,000 richer or in other words, your assets grew by $100,000.

Another type of appreciation that can come into play is known as “forced appreciation,” the concept of increasing the value by physically upgrading the property through renovation. Any form of appreciation makes you money in real estate and you become richer. Click on the link to find out how investing in Kansas City real estate can help you gain wealth.

8. Opting For 1031 Exchange in Real Estate

As a real estate investor, you can use this tax code called 1031 Exchange to sell an investment real estate 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.

9. Loan Pay Down

When you purchase a rental property with a mortgage, each month you make a payment to the lender. That payment includes two parts: principal and interest. Interest is the profit for the lender, but the principal is the money you are paying down the loan with. Over time, your tenant is essentially paying the loan down for you, helping you build wealth automatically. For example, if you purchased a house five years ago for $100,000 and obtained an $80,000 mortgage (we’ll say it was a 30-year mortgage with a 5 percent fixed rate), today you would owe only $74,000.

Ten years from now, you would owe only $65,000. This means that every year your equity increased. You'd gain value, as long as the property value didn't drop. And if it made $0 in cash flow or broke even and never climbed in value, still after the mortgage is paid off, you’ll now have a property worth $100,000 or more that you didn’t save for. Your tenant paid it off due to the “loan pay-down.” This can't happen if you pay all your cash or savings for the property and don't go for the mortgage options. This is the smartest strategy for making money in real estate to get rich.

10. Refinancing Your Mortgage For Better Cash Flow

You can also opt for refinancing your mortgage. The number one benefit of refinancing your mortgage is to obtain a loan at a lower rate of interest and also to decrease the monthly mortgage payment amount. One of the benefits of refinancing your mortgage is also that refinancing provides the borrower with fresh money at lower interest rates due to which the homeowner can lower his/her monthly payment amount. Another advantage of refinancing your mortgage is that the decrease in the interest rates allows homeowners to replace an existing loan with another with an added benefit of a shorter loan term and no change in the payment amount.

Is Real Estate The Best Way To Make Money or Build Wealth?

how to get rich in real estate

While making money in real estate you can minimize the risks and get a high return on your investment but it comes with proper education and experience. You may be fixing and flipping properties. You may be buying fixer-uppers, repairing them, and renting them out. Or you might be buying existing rental properties with tenants, knowing you can improve the cash flow by getting rid of non-paying tenants and adding amenities that allow you to up the rental rates.

It doesn’t matter which strategy you use as long as you pick one and master it. You need to learn a lot of things and also understand the risks involved before buying your first investment property. Location is your priority for a successful real estate investment. It would enhance your chances of selling the property further.

Real estate is one of the best investments available to make a lot of money, assuming you buy properties that have good fundamentals in their favor. It is one of the few businesses where banks are almost eager to loan you money, whereas banks reject roughly half of all business loans. Real estate almost always appreciates at a rate higher than the rate of inflation. Property appreciation rates have averaged 3 to 5 percent annually for the past thirty years.

It takes a dramatic downturn like the Great Depression or the Great Recession of 2007-2012 to hurt property values across the board. Know that real estate is ultimately local, so individual real estate markets can collapse due to lack of demand or dramatic over-building though the national market is steadily growing. One of the points in favor of real estate is that you’re holding a real asset. A company could go bankrupt and wipe out the value of its shares. They could be hit with a massive lawsuit, and the dividends they were paying disappears.

When you own quality real estate, the value won’t go down unless the area as a whole becomes undesirable. As long as you don’t have to sell it in a hurry, you can get your money back. That’s why private mortgage insurance is canceled once you hit 20 percent equity in the property. All of this explains why real estate investing is safer than stock market investing. It is possible to buy real estate for capital gains. Buying condos in the hope of flipping them for a profit is one such case.

Buying land to eventually sell to developers is another. However, real estate offers significant cash flow. You can rent out apartments, condos, single-family houses, and commercial space. This generates monthly cash flow for the owner. The cash flow is offset by tax-deductible expenses like maintenance, property taxes, and insurance. There are a variety of ways to calculate the return on investment for rental real estate. If you use the cap rate equation, a good ROI is 10 percent, while 12 percent is considered excellent.

The cap rate is generally used because the equation is straightforward. (NOI / purchase price x 100 percent). Note that these returns are based on the income you see with every rent check. Appreciation of the property is a capital gain you don’t realize unless you sell the property. When you invest in real estate, you could achieve a million-dollar or greater net worth simply because the properties you own and manage have gone up in value over the years.

Few of us have the cash on hand to buy the property outright. This is why many put a down payment down on a property before repairing it. They may then rent it out or flip it. Renting it out generates steady income that has significant legal protection since you can generally evict non-paying tenants. The cash on cash returns take the mortgage on a property into account, and you can easily see a double-digit ROI using this equation.

Flipping the property or selling it after you’ve purchased it and repaired it will generate a profit. However, this approach is riskier than renting out real estate. You lose money every month you hold the property and pay carrying costs like the mortgage. If you sell the property for less than it is worth, you could lose tens of thousands of dollars. On the other hand, if you buy real estate and rent it out, you’ll get more for the property from investors because it comes with an income stream, the existing tenant.

References

REITs | Fix and flip
https://thecollegeinvestor.com/10414/ways-to-invest-in-real-estate
https://www.forbes.com/sites/jrose/2018/04/18/real-estate-investing-without-buying-property/#7b1b9b511496

Crowdfunding and Hard Money Lending
https://www.usatoday.com/story/money/personalfinance/2017/08/23/diversified-portfolio-5-ways-invest-real-estate/588610001

Appreciation
https://www.zillow.com/research/zillow-home-value-appreciation-5235

PMI
https://www.foxbusiness.com/features/how-to-dump-pmi-asap

ROI
https://www.mashvisor.com/blog/rate-of-return-on-a-rental-property
https://www.biggerpockets.com/blog/rental-investing-earn-2000-month

Strategy to make money
https://www.businessinsider.com/secret-to-wealth-real-estate-2015-4
https://www.biggerpockets.com/blog/rental-investing-earn-2000-month
https://www.biggerpockets.com/blog/plan-to-make-a-million

Loan Pay Down
https://www.forbes.com/sites/brandonturner/2016/10/18/4-things-you-need-to-become-a-millionaire-through-real-estate-investing/#3c402999247a

Business loans rejected
https://www.biz2credit.com/blog/2019/05/13/6-reasons-small-businesses-get-rejected-for-loans/

18 Best Real Estate Investing Books To Read in 2021

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Best Real Estate Books

Real estate investments can provide excellent returns if the proper steps are taken, but many new investors lack the necessary skills and education. I wanted to discuss the significance of real estate education through books. This article will present the 18 best real estate investing books to get you started in 2021. If you read all of these books, you will gain a lot of knowledge and learn from the case studies of top investors who have had great success in real estate investing.

Are you a real estate investor? Are you planning to invest? Real estate investing is an ever-evolving industry. Real estate is regarded as one of the best investments that a person can make. But why do so many people struggle with it? The first step is to prepare your mind and habits for success. You will also require adequate real estate education to assist you along the way.

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Single Family Rental Homes vs Multi-Family Investing in 2021

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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.

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20 Best Cities To Invest In Real Estate In 2021

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In this article, we discuss some of the best places to invest in real estate. Real estate remains an appealing asset class for investors because of the opportunity to earn recurrent income from rentals. If the market dynamics are optimal, your monthly rental income can fully offset the expenses associated with servicing your mortgage. Interest rates remain low and so debt is still cheap. Record-low mortgage rates and shortage of inventory have kept the US housing market strong concerning buyer demand. Strong housing demand pushed by the pandemic is driving prices insane.

As of now it 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. 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.

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 2021. 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 2021. According to the National Home Rental Council's Q3 2020 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 2021. 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 2021. 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 towards 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, the basic principles of real estate business remain unchanged – you want to choose those places for your investment properties where the return-on-investment is high. To maximize the returns from your real estate investment you want to buy property in places with the following features:

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

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.

20 Best Places To Invest In Real Estate in 2021

Best Places To Invest In Real Estate

We looked at data and examined trends from across the US to bring you this list of the 20 best places to invest in real estate in 2021. 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. The real estate appreciation rate in Boise in the latest quarter was around 2.44%, which equates to an annual appreciation rate of roughly 10%. For sellers, a nice profit is on the horizon.

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 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 3.2%.

2. Dallas, Texas

Dallas is another good place to invest in real estate in 2021. 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 11.4%.
  • Median rental per month: $1,800.

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.
  • 3-year appreciation forecast of 10.5%.
  • 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. 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 as 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 starting 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.
  • 3-year appreciation forecast of 9.3%.
  • Atlanta has a growing economy that is 8th in the nation for GDP and is home to a wide variety of businesses that includes Fortune 500 companies. 
  • The relocation of payment processing giant NCR is expected to bring more than 3,500 jobs to the metro Atlanta region.

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 towards 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. 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 is 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.

6. 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.

7. Tampa, Florida

Tampa, FL is also on the list of best places to invest in real estate in 2021. 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 one of the fastest-growing job hubs in the country.
  • The healthcare, education, and transportation facilities in Tampa are also impeccable.

8. 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%.

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. 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.

11. Lakeland, Florida

Lakeland, FL also enters the list of the best places to invest in real estate in 2021. 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.

12. Ocala, Florida

Ocala, FL finds itself on the list of the best places to invest in real estate in 2021. 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 an EMS vehicle maker. This is why Ocala not only has a 4% unemployment rate but a much more stable job market than cities in Florida dependent on tourism. Another factor affecting the demand for Ocala rental properties is that half the people who live in the county commute to more expensive surrounding areas to work.

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.

13. Birmingham, Alabama

Birmingham, AL also ranks in our list of the best places to invest in rental real estate in 2021. 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.

14. Durham, North Carolina

Durham, NC  is also one of the best places to invest in rental real estate in 2021. 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 the 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.

15. Charlotte, North Carolina

Charlotte is also one of the best places to invest in rental real estate in 2021. 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.

16. Colorado Springs, Colorado

Colorado Springs is also on the list of the best places to invest in rental real estate in 2021. 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.

17. Denver, Colorado

Denver also makes the list of the best places to invest in real estate in 2021. 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.

18. Raleigh, North Carolina

Raleigh is also on the list of best places to invest in rental real estate in 2021. 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.

19. Phoenix, Arizona

Phoenix is also on the list of best places to invest in rental real estate in 2021. 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.

20. 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 for 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).

2017 Profile of International Activity in US Residential Real Estate

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

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

Make the most of your investment dollars in 2021 by investing in real estate. Our analysis of the 20 best cities to invest in real estate was based on the most recent housing market trends, rate of appreciation, rent prices, job growth, economy dependencies, quality of life, etc. Please note that real estate prices are deeply cyclical because their demand side is impacted by economic cycles. Much of it is dependent on factors you can’t control. A recent example is COVID-19 which has impacted our economy. Therefore, many variables can potentially impact the value of real estate and some of these variables are impossible to predict in advance.

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

What Does Turnkey Property Investment Mean In Real Estate?

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turnkey property investment

This short article aims to provide information on turnkey real estate investing. Turnkey properties are a great option for real estate investors looking for steady and predictable cash flow without the headaches of property management. A turnkey property investment means buying a real estate that has already been renovated before it's put on the market, is ready to move in, and can be immediately rented out. 

It is a passive real estate investment with no leg work required to be done by the buyers. Everything is done and managed for the buyers by a turnkey real estate company, which does all the heavy lifting in order to offer you an opportunity to become a property owner. As a buyer, you are purchasing a turnkey property that is producing a stream of income.

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