Are you looking to invest in real estate? Finding the right location will make or break your investment. Keep reading to learn the best real estate cities in the United States to invest in.
How to Determine if a City is Worth Investing In?
The following four factors are helpful rules of thumbs:
- Increase in well-paying jobs from business-friendly policies
- Housing inventory shortages
- Tax friendly
- Low cost of living and high quality of life
An influx of well-paying jobs and companies is another key sign. It indicates business-friendly policies. This makes it easier for your tenants to afford the rent. Higher-income people also tend to respect the property too.
Housing inventory shortages cause a steady rise in house values. States with inventory shortages will allow your investment to appreciate in value.
Tax friendly states are also a must. They help you avoid getting large chunks of your cash flow eaten up each month. Low taxes also attract high-income workers. It makes paying expenses like rent easier for them too.
Lower costs of living is another key factor. Affordable states tend to have growing populations unlike New York or California. This makes it easier for tenants to make their rent payments. Low costs of living will make investments more affordable in the beginning. Making your mortgage will be easier.
Higher living standards also mean their money goes further. People with decent living standards are more likely to stay in one place. This increases the profit and lifetime value of each tenant.
People in these situations will also be less maintenance. People in low quality of life places care less about their landlord’s property. Every state has areas that easily cash flow on paper.
The problem is these areas can be in less desirable areas with tenants that don’t care about the property. Smart landlords avoid this when it’s possible.
1. Scottsdale Arizona
This city is seeing one of the strongest appreciation rates in the nation. It is commonly ranked in the top 20% of all US cities for real estate appreciation. The reason is it has a low unemployment rate and high quality of life.
Inventory of available homes is also limited. Lower supply of Scottsdale homes for sale means that prices will continue to steadily rise.
Many older retirees find the climate to be what they’re looking for. The average median income is around $73,000 a year which is quite strong.
Arizona’s laws are favorable for landlords. It makes entering apartments for evictions and repairs more straight forward than California. The tax rate is also much lower than in neighboring states. Scottsdale has been a strong real estate investing city for over a decade.
2. Charleston South Carolina
A good investing city should have a strong economy. Charleston is no exception. Large companies like Boeing, Google, and Volvo employ a high-paid workforce. This makes real estate values continue to climb as more workers move to the city.
The highly paid workforce also benefits from a lower cost of living than average. This makes it easy for them to afford to make rent. Retirees are also moving to Charleston since it has a warm climate.
Property prices are lower than neighboring cities on the East Coast. This makes Charleston an attractive city to invest in.
3. Austin Texas
The economy of Austin is not very dependent on tourism. This has helped it during the current uncertainty around the pandemic. It has a well-rounded economy focused on tech, finance, and natural resources.
Household incomes are high because of the strong economy. The cost of living for housing, food, and gas are also low.
Austin has maintained a low unemployment rate. Its job growth is expected to climb 47% over the next ten years. Taxes are also lower than average.
4. Nashville Tennessee
Healthcare, education, and entertainment are part of what makes Nashville so strong. It is also a growing tech center. Outlets like Forbes have designated them as a ‘Brain Magnet’ for educated workers.
People call Nashville the “Music City.” Many high paid musicians operate here. It is also known for having many excellent universities. This is helping attract a younger demographic of well-paid workers.
It has a very business-friendly atmosphere. There is no personal income tax. This makes it attractive for both investors and tenants alike.
Strong employment, low living costs, and being pro-business makes Nashville great for investing.
5. Atlanta Georgia
The city’s economy is growing. It has a nice mix of technology and finance jobs. The state also has a business-friendly attitude. This has attracted large companies like Google.
Over 53,000 jobs were created in the past year. Most of these are high-paid and high-skilled. This also greatly helps real estate values and rents. Investors are seeing double-digit returns on single-family homes.
6. San Antonio Texas
Here’s is one of Texas’ largest cities. It has a very strong local economy and a growing population. Texas also has a low tax rate.
Costs of living are also favorable to those looking for an affordable place to live. They will get more bang for their buck than states like New York. Forbes and Curbed have also named San Antonio one of the nation’s best markets.
7. Charlotte North Carolina
The state is a very business-friendly state. Many technology jobs are flourishing there. It is seeing household growth of 2.4%. That means the population is growing at a steady pace.
CNBC ranked it the third best city in the country to start a business. It also has the second-most banking assets after New York City.
8. Fort Lauderdale Florida
This city has attracted a steady increase in retirees. Fort Lauderdale is also benefitting from the extra income retirees have. Job growth in Fort Lauderdale has been leading the state for years. Florida in general has been a solid place for investing.
There is no income tax in Florida. Eviction proceedings are also straightforward.
House inventory is lower than most parts of the nation. This makes values continue to rise steadily. Rent prices are higher than average since the median income in the city is strong.
9. Columbus Ohio
The city is benefiting from the lower cost of living that’s typical for the Midwest. Columbus is seeing a renaissance as it emerges as a tech hub. Its population has grown by over 10% in the last eight years. Evicting tenants is not as easy as in some states, but it is easier than states like New York.
Investors are seeing strong returns in Columbus based on these factors.
Closing Thoughts
Parts of the country are booming for real estate investors. The South, Midwest, and Southwest contain many of the strongest markets. Scottsdale has been one of the strongest.
These regions are seeing the biggest increase in high-paid jobs. They have strong tax and business policies. Rents and property values are steadily increasing in these places as a result.
