The Top 10 Cities to Purchase Rental Properties In
The US offers an incredibly diverse investment landscape. But some cities are undoubtedly more attractive than others. It’s not just down to how much you can buy real estate for, your rental return depends on multiple aspects. Spending a little more can reap exponentially higher rewards—and it really is all about location, location, location.
With that in mind, let’s look at the top cities to purchase rental properties, and the math behind the recommendations.
The Art of Rental Properties: What to Base Your Decisions On
- Why location is so important
- 10 great cities to consider
Why location is so important
Choosing where your rental property is located should follow a systematic approach. The whole reason for buying rental real estate is to make money. But this could be either for short or long-term gain.
While a highly desirable location means a property will probably be worth more, this doesn’t necessarily mean that it’s the best investment. Today’s red-hot locations are not the same as tomorrow’s, therefore buying a property in an up-and-coming area might prove more lucrative.
With that in mind, you need to look at the landscape today and its future potential. Examples might include:
- Plans for infrastructure investment and reform.
- An imminent arrival of a power firm, meaning enhanced employment opportunities. (Very often, when one such company moves to an area, others follow).
- Planned transport links. Perhaps the upcoming opening of a new railway line might be a lifeline to a previously less commuter-friendly neighborhood.
- Are higher-end shops, cafes, and eateries beginning to emerge? These are often one of the biggest clues that an area is becoming more gentrified, and therefore more attractive to own a rental property.
10 great cities to consider
Taking the above into account, here are 10 of the best cities where you might currently look to purchase a rental property.
- Nashville, TN: With a year-on-year increase in home value of nearly 21%, forecasted growth of 19%, and an annual population increase of 1.4%.
- San Antonio, TX: Current year-on-year increase is 19.3%, forecasted growth of 17.6%, and an annual population increase of 1.6%.
- Oklahoma City, OK: Current year-on-year increase is 13.7%, forecasted growth of 11.9%, and an annual population increase of 1.1%.
- Phoenix, AZ: Current year-on-year increase is 32.2%, forecasted growth of 23.8%, and an annual population increase of 2.1%.
- Tulsa, OK: Current year-on-year increase is 14.5%, forecasted growth of 14.1%, and an annual population increase of 0.7%.
- Birmingham, AL: Current year-on-year increase is 15.3%, forecasted growth of 13.1%, and an annual population increase of 0.1%.
- Kissimmee, FL: Current year-on-year increase is 18.7%, forecasted growth of 15.8%, and an annual population increase of 1.2%.
- Clearwater, FL: Current year-on-year increase is 27.7%, forecasted growth of 27.2%, and an annual population increase of 1.4%.
- Sugar Land, TX: Current year-on-year increase is 17.9%, forecasted growth of 15.5%, and an annual population increase of 1.3%.
- Paradise, NV: Current year-on-year increase is 24.1%, forecasted growth of 18.5%, and an annual population increase of 1.8%.
As you can see from the above metrics, it’s vital to ascertain the annual increase, forecasted growth, and population increase. This should form the basis of any location research. Once you have those figures, you can begin to whittle down your search area.
Your attitude to risk will also influence your choice of location. It will also be driven by how quickly you need to see a good return. For those who can sit on a lower yield for a few years before a potential increase, then the long-term return of investing in up-and-coming city areas could end up being extremely lucrative. In such instances, you might also want to take the aforementioned potential of future hotspot likelihood into consideration.
Now You Know the Top Cities to Purchase Rental Properties, Get the Top Finance Too
The best returns from rental properties are a combination of location, real estate choice, and careful financing. At BRRRR we don’t just provide the funds, we provide the expertise behind the most successful rental strategies to help you build your portfolio and wealth.
Browse our range of products at https://www.brrrr.com and get in touch today for a confidential discussion.
Buy, Rehab, Rent, Refinance, & Repeat. A nationwide direct lender to real estate investors. If you have a project that needs to be funded, you’ve come to the right place.