The Best Locations to Buy Real Estate US homebuyers in 2022 are under pressure to locate a home quickly, while renters are eager to find a property to rent that is reasonably priced.
In order to help you get started on your investment endeavor, we’ve compiled a ton of statistics from reputable sources below on the trendiest places to buy property.
Low supply, high prices, greater financing costs, significant down payments, competition from investment buyers, and sluggish new development are the characteristics of the 2023 real estate market. Although there may be speculation about a housing slowdown, rental property prices, and income stability may be predicted by the lack of available dwellings.
The rental housing market might be a much better long-term investment plan than stocks. Long-term investing is fashionable right now since short-term profit gains are now scarce. The best homes for investment are sought after by investors worldwide.
And the most recent statistics from NAR and Zumper reveal that price growth has moderated and in some cities has even fallen (such as in the West).
40 Best Cities to Invest in Real Estate 2023
As the Covid pandemic comes to an end, life is almost back to normal, and some people are moving back to cities and suburbs. Migration of all kinds is causing price waves to spread throughout the nation.
Surprisingly, states that have long been disregarded, like Indiana, Virginia, North Carolina, Michigan, and Connecticut, appear to be experiencing more development than California, Texas, and Florida. It seems these states could benefit from the return of manufacturing to the USA as global trade changes.
Investment opportunity for landlords
Many investors are prepared to buy in more feasible places where the rental property market is strong this year because loan rates are still historically cheap.
Investors do have the chance to invest in various types of real estate now that money has been removed from the stock, bond, and equity markets. Property managers will be tasked with a variety of properties, from SFR to mixed residential and commercial to commercial real estate, depending on the needs of the owners.
In 2023, what will support rental housing?
While homebuyers cannot afford the increased housing supply that is entering the market, investors can.
- A sizable sector of the renter market, notably in California and Texas, as well as maybe South Florida, lacks the chance of purchasing a property due to demand from renters of all types moving to work or young families who are unable to purchase.
- Due to uncertainty, more homeowners are beginning to advertise their houses, resulting in properties that are rentable.
- Banks are reluctant to lend to multifamily developers and home builders, which is restricting supply as the economy slowly recovers this year through 2023. As a result, the economy may not be as bad as predicted.
You may find out which high-yield towns are the greatest for investors by looking at the housing markets in Texas, Colorado, California, Florida, Arizona, Nevada, Utah, North Carolina, and Florida. Finding properties in the best areas is the difficult part. Below is a comprehensive list of the top cities to buy in.
The best cities to buy in are those where demand and price indicate sound underlying economic fundamentals, according to the most recent estimate from NAR.
The best cities to buy real estate in typically include Austin, Raleigh-Durham, Nashville, Charlotte, Boston, Dallas-Fort Worth, Orlando, Phoenix, Denver, Atlanta, and even Los Angeles.
What Elements Are Most Important When Buying Rental Property?
Examine these 6 crucial elements:
- Local businesses and state and local taxation
- the rise in employment and wages
- population expansion
- increased value of homes
- a rise in rent costs
- Rental return
List of NAR’s Hottest Cities
A noteworthy source is NAR’s ranking of the hottest cities. You can see the attractiveness rating, its change over time, and buyer interest in the chart below (data courtesy of NAR). Even though the price is current, they didn’t show year-over-year price growth, which is something buyers should be aware of.
What demonstrates how much the US housing market has changed in 2022 is the majority of midwestern cities.
|Hottest Metros||Hotness Rank||Hotness Rank YoY||Viewers per Property vs US||Median Days On Market||Median Listing Price If Active Within Period|
|La Crosse-Onalaska, Wis.-Minnesota||2||13||2.2||27||$349,650|
|Portland-South Portland, Maine||6||5||2.7||34||$550,000|
|Fort Wayne, Indiana||9||-1||1.8||29||$295,000|
|Kingsport-Bristol-Bristol, Tennessee – Virginia||12||16||2.7||35||$289,900|
|Johnson City, Tennessee||13||-9||3.4||36||$382,200|
|Lafayette-West Lafayette, Indiana||15||9||1.8||34||$290,750|
|New Haven-Milford, Connecticut.||20||49||1.8||36||$359,000|
A comprehensive list of the cities with the best real estate markets, where buyer demand is strong, was created by Wallethub. In this newly updated interactive widget, they have ranked them on a scale:
ApartmentGuide compiled a list of the top cities for rent growth:
- Las Vegas, NV (+42.1% )
- Jacksonville, FL (+35.5%)
- Tucson, AZ (+32.5%)
- Santa Ana, CA (+27.3%)
- Houston, TX (+24.3%)
- Henderson, NV (+24.1%)
- Winston-Salem, NC (+23.3%)
- Irvine, CA (+23.3%
- Reno, NV (+20.4%)
- Aurora, CO (+19.8%)
According to rising rents, Apartmentlist has ranked cities. We are aware that there is a high demand for rental housing in working-class neighbourhoods where rents are rising.
Looking for Better Assets
Strong profit potential exists for those who invest in rental income due to the large number of people who want or need to rent a home, condominium, or apartment. Finding the greatest locations to invest in—and potentially avoiding the worst—is key for investors.
Real estate with a rental income is a potential investment that pays you to own it, according to those researching this type of property. Gain long-term stability, lower taxes, and increase profits by leveraging rental property to generate sustainable passive income.
You can improve your property management procedure by utilizing cutting-edge Proptech products like Managecasa. Learn about the effectiveness of contemporary remote property management. It completely alters everything.
A breakdown and in-depth facts from leading data sources are provided below, highlighting the cities with the most potential. From there, you can further divide it up into specific high-quality areas to balance the probabilities of profit in your favor.
Asking Rental Rate for One Family
The single-family housing market is still worth considering. Still, due to the rapid increase in home values, it will be more challenging to locate a rent-to-price ratio in some locations, such as Massachusetts, New York, Texas, Washington, and Florida. The center or heartland is delivering a stronger rent index, as this graph demonstrates. For more detailed information on the single-family rental market, go to realestateconsulting.com.
- The increase in demand for rentals was greatest among those with earnings under $25,000.
- Over the previous ten years, 4 million additional renters in the US have been younger renters.
- household incomes over $50,000 had the fastest growth in rental housing (3.3 million new renters).
- There are currently 1.6 million more renters who make over $100,000 annually.
- the supply of rental housing increased as well (single-family homes now make up 40% of the total supply).
- Seventy-five percent of the largest American cities had a rental vacancy rate of less than 5%.
- Smaller cities are experiencing the biggest increases, with rents rising in 89% of the largest cities in January.
Contrary to the general trend, renting is more affordable than buying a home in the 14 most populous counties in the country and in 30 of 39 counties with a population of one million or more (76%) — including Los Angeles County, California; Cook County (Chicago), Illinois; Harris County (Houston), Texas; Maricopa County (Phoenix), Arizona; and San Diego County, California, including cities of Miami, New York City, Seattle, Las Vegas, San Jose, San Francisco, and Boston
In style in 2022
The methods used by real estate investors to find and acquire rental properties are becoming more sophisticated. Price-to-rent ratios in major cities are out of whack, and capital growth is negative. They are currently investigating smaller secondary markets.
The secondary market is still smoldering:
Prices in secondary markets are rising, population growth rates are twice as rapid as in major markets, job growth is more than twice as high, and the population is getting younger. Millennials and Gen Z are the new markets, and they desperately need housing, especially houses and townhouses, which are more affordable for young renters. Southern US cities will see the most growth in 2020.
Atomdata cited 48 cities with net cash flows above $10,000 and 874 cities with net positive cash flows from rental properties of at least $5000. Mortgage payments, property taxes, insurance, and 20% for property management were subtracted from the gross rent as part of their net cash flow projection methodology.
This implies that you can earn significantly more money by using effective property management techniques.Area codes 74126 in Tulsa, Oklahoma ($10,064 potential annual net cash flow), 63115 in St. Louis ($10,012), 19103 in Chester, Pennsylvania in the Philadelphia metro area ($10,237), 48234 in Detroit, Michigan ($10,292), and 08104 in Camden, New Jersey, also in the Philadelphia metro area ($11,388) were at the top of that $10,000 annual cash flow list based on highest percent cash-on-cash return. — report from AtomData.
Top Cities for National Rent Growth
Are these the finest cities to buy real estate in? Those who followed our reports over the past four years are now reaping the benefits. These big cities already have high rent growth, which attracts buyers.
Are these the finest cities to buy real estate in? Those that followed our reports over the past four years are now reaping the benefits. These big cities already have high rent growth, which attracts purchasers.
|(Courtesy of Zumper)||1 Bedroom||2 Bedrooms|
|St Petersburg, FL||$1,470||-2.00%||22.50%||$2,120||-3.20%||34.20%|
|Las Vegas, NV||$1,250||0.80%||25.00%||$1,600||4.60%||33.30%|
|Fort Lauderdale, FL||$1,880||-3.10%||10.60%||$2,900||3.20%||32.40%|
|New York, NY||$3,100||-4.90%||26.00%||$3,300||-2.90%||29.40%|
How has your own cash flow analysis been going? You can use online property management software to assist you or download a cash flow analysis spreadsheet. Utilize ManageCasa. Totally free!
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Job Rates in Different States
According to a RentCafe report, smaller American cities continue to experience the highest increases, with Gilbert, Arizona (8.5%), Roseville, California (8.5%), and Fort Collins, Colorado (7.9%) cracking the top 10.
A List of the Best Cities for Purchasing Rental Property
Here’s a quick look at price/rent ratios for US cities based on information from RentCafe, RentMonkey, Zillow, and other sources, though it’s not entirely scientific. Will the cost of rent decrease in these cities? Oil prices may cause some of them to experience sharp declines, whereas economic changes may cause other cities to experience sharp increases.
Best Places in 2022 to Buy Rental Property
|City Rating||Affordability and Economic||Average Apartment Rent Price||Home Price||YoY Home Price Change||Average Household Income|
|14||Spokane Valley, WA||66.1||30||1,351||402,687||27.0%||$59,646.00|
|22||Salt Lake City, UT||64.8||27||1,478||583,858||23.0%||$80,196.00|
|25||Colorado Springs, CO||64.6||53||1,473||461,668||26.0%||$58,158.00|
|26||Fort Worth, TX||64.6||106||1,303||292,552||27.0%||$65,356.00|
|30||Santa Clara, CA||63.7||234||2,814||1,631,904||15.0%||$133,076.00|
The Comprehensive Property Investing
There is a lot of data to sort through, as you can see. As you examine it, keep in mind macroeconomic aspects like oil prices, trade agreements, interest rates, important industry growth, new development levels, and what each city’s main business requirements are. Why do local economies grow? The largest employers are who?
The best cities for real estate investors will undoubtedly attract a lot of attention in 2022.
Enjoy your investigation into the top locations to purchase a rental property. Landlords are actively pursuing it, and now even property management firms are doing so.