10 Best Places to Invest in Real Estate

Want to know where the best places to invest in real estate in the US are? Read this to find out.

Real estate investors today face a changing world with the rising risk of recession and a generally slower rate of economic growth. The US housing market, however, is still a favorable place for investors from all over the world according to the Emerging Trends in Real Estate® report, released by ULI and PwC.

Now in its 41^st year, it’s one of the most highly regarded annual market reports. It provides an outlook on real estate investment and development trends, real estate finance and capital markets, property sectors, metropolitan areas, and other real estate issues throughout the US and Canada. It also includes interviews and survey responses from leading real estate experts including investors, developers, lenders, brokers, fund managers, property companies, advisors, and consultants. These pros were asked to rank the 10 best places to invest in real estate and, according to the report, these cities are:

1. Austin
2. Raleigh-Durham
3. Nashville
4. Charlotte
5. Boston
6. Dallas-Fort Worth
7. Orlando
8. Atlanta
9. Los Angeles
10. Seattle

This real estate infographic was created by Venngage Infographic Maker.

In this article, we break down the reasons why these cities are the best for owning an investment property. Moreover, we provide real estate data analytics (estimated by Mashvisor’s Airbnb Calculator) to help you better understand why these cities are the best of the best. To learn more about our tool and how it’ll help you make faster and smarter real estate investment decisions, click here.

Keep in mind that while we provide Airbnb rental data, some of these cities currently ban or are planning to ban non-owner-occupied Airbnbs. Many cities in the US only allow renting out primary residences and require you to register for and obtain permits. Mashvisor advises real estate investors to check local Airbnb data and regulations before renting out non-owner-occupied Airbnbs in any of the following cities.

#1. Austin, TX

After coming in 6^th place last year, the Austin housing market is back on top for overall real estate prospects. The city also took first place for local expectation of investor demand. According to the PwC survey, Austin is a favorite among respondents due to its “deep talent pool, unique and popular lifestyle, and its ambitious commitment to business and real estate expansion”. The city’s strong economy offers many high-paying tech jobs especially after Google, Apple, and other tech firms decided that Austin is the place to be, bringing with them thousands of new jobs. In turn, Austin is projected to see the highest population growth rate in the US for the coming 5 years!

The PwC report also noted some troubles in the Austin real estate market, including ongoing traffic issues and rising housing affordability pressures. Additionally, the city has a lower level of supply when compared to other major cities in Texas.  Our advice to real estate investors is to buy Austin rental properties sooner rather than later. For more information on the best neighborhoods in the city to buy rentals, best property type to buy for investment and more, read our complete Austin Real Estate Market Report.

• Median Property Price: $547,449
• Price/Square Foot: $285
• Traditional Rental Income: $2,069
• Airbnb Rental Income: $3,474
• Days on the Market: 74
• Price-to-Rent Ratio: 22

#2. Raleigh-Durham, NC

Next up on the best places to invest in real estate in the US is the Raleigh-Durham real estate market. The metro market also topped the rankings for homebuilding prospects! The PwC report revealed that the Raleigh-Durham market has been seeing impressive real estate investment performance – especially in the multi-family sector. In fact, investment activity in Raleigh-Durham totaled $385 million in the first half of 2019. 70% of respondents recommended that investors buy multi-family real estate properties in Raleigh-Durham.

Moreover, it’s well known that this market has a concentration of educational institutions – the University of North Carolina, North Carolina State University, Duke University, and several smaller colleges. Coupled with the Research Triangle Park, this has branded the area as a technology hub. Now, the Raleigh-Durham real estate market has more than 89,000 tech jobs and ranks 3^rd behind Silicon Valley and San Francisco in tech industry share, according to PwC. Thanks to this diverse economy and strong market fundamentals, real estate investors are guaranteed a good rate of return on a rental property in the Raleigh-Durham real estate market.

• Median Property Price: $425,996
• Price/Square Foot: $334
• Traditional Rental Income: $1,534
• Airbnb Rental Income: $2,718
• Days on the Market: 74
• Price-to-Rent Ratio: 23

#3. Nashville, TN

The Nashville real estate market has always been an attractive location for property investors. After moving up from 5^th to 3^rd place in the report’s list of best cities for real estate investment, you can expect the demand for real estate investment in Music City to escalate even further! Out of the largest metropolitan areas in the US, Nashville has the lowest unemployment rate at 2.6%. The city’s economy is diverse and fast-growing, which is naturally a positive indicator for commercial as well as residential real estate investing. The high population growth that the city is experiencing each day is yet another reason why Nashville is one of the best places to invest in real estate.

Of course, Music City continues to be a popular tourist destination, visited by over 15 million people each year. From a real estate investor’s perspective, this translates into profitable short-term and Airbnb rentals. In fact, Mashvisor’s data shows that an Airbnb investment property in Nashville can be even more profitable than traditional Nashville rental properties. However, if you’re thinking of buying an investment property to rent out on a short-term basis here, you must have a permit as Nashville is going to ban non-owner-occupied Airbnbs starting January 1st, 2022.  Read this for more details.

• Median Property Price: $432,124
• Price/Square Foot: $212
• Traditional Rental Income: $1,757
• Airbnb Rental Income: $3,903
• Days on the Market: 54
• Price-to-Rent Ratio: 20

Discover the 10 Best Neighborhoods in the Nashville Real Estate Market!

#4. Charlotte, NC

The Charlotte real estate market has moved up in the PwC’s survey rankings, placing 4th overall (up from last year’s 9^th place) and 2^nd for homebuilding prospects (up from 4^th). Some survey respondents also stated that Charlotte is one of the best places to invest in real estate especially for beginners in the business. The city’s focus on infrastructure, technology, and manufacturing is empowering and diversifying its economy. In turn, this is attracting residents from across the nation to Charlotte and, hence, increasing the demand for housing – on both the purchase and rental side.

Like many other major cities in the US housing market, Charlotte is currently suffering from a lack of supply and limited housing inventory. Real estate experts forecast that this trend could carry on into the Charlotte housing market as well. This suggests that home prices could continue to rise over the months ahead. For a real estate investor, this means that if you’re planning to invest in the best places to buy rental property, you have a greater chance of finding affordable properties for sale in Charlotte now. Click here to start your investment property search & analysis with Mashvisor!

• Median Property Price: $385,600
• Price/Square Foot: $193
• Traditional Rental Income: $1,512
• Airbnb Rental Income: $2,178
• Days on the Market: 78
• Price-to-Rent Ratio: 21

#5. Boston, MA

The Boston real estate market continues to prove its resilience as it moved up from being ranked 7^th to the top 5 best places to invest in real estate in the US! Even though Boston is a small metro market compared to US MSAs with relatively slow population growth, it still enjoys a strong economic performance and real estate investment activity. According to PwC, the city ranks 6^th place for real gross domestic product (GDP) per capita and is largely responsible for Massachusetts’s top-tier ranking on the gross state product map.

It’s well-known that the Boston housing market is an expensive one with a price to rent ratio of over 21. Nonetheless, survey respondents don’t expect this affordability issue to cause any slowdown in Boston real estate investment in the future. As a matter of fact, the Boston real estate market earned the 2^nd highest score for investor demand – after Austin. The city still enjoys strong structural advantages like its outstanding educational institutions acting as a talent magnet, as well as its powerful tech industry that accounts for 10% of the job base. These are all good reasons to consider multi-family real estate for sale in Boston.

• Median Property Price: $881,681
• Price/Square Foot: $710
• Traditional Rental Income: $2,720
• Airbnb Rental Income: $4,074
• Days on the Market: 63
• Price-to-Rent Ratio: 27

#6. Dallas-Fort Worth, TX

Dallas-Fort Worth is the largest landlocked US metropolitan area and the 4^th most populous one in the country. Dallas real estate had captured real estate investors’ attention last year after the city ranked as the #1 market to watch in the 2019 PwC Emerging Trends report. The fact that it slipped to #6 in this year’s report, however, shouldn’t stop you from considering the Dallas-Fort Worth real estate market when searching for your next rental property. The area’s economy is diverse and has a strong potential for future growth, which is a positive indicator for the best cities for real estate investment.

Moreover, Dallas-Fort Worth’s strong job sector is creating multiple employment opportunities which are attracting qualified professionals from other cities. This suggests that the demand for housing will stay strong. Housing supply, on the other hand, is low which is why prices are going up and experts in Dallas-Fort Worth predict them to keep rising. The DFW real estate market is also known for having high natural real estate appreciation, with an annual average of 4.1% since 2000. This is not expected to change any time soon, which is yet another reason for investors to feel confident about getting a good return on investment from a Dallas-Fort Worth rental property.

• Median Property Price: $389,626
• Price/Square Foot: $193
• Traditional Rental Income: $1,799
• Airbnb Rental Income: $2,610
• Days on the Market: 75
• Price-to-Rent Ratio: 18

#7. Orlando, FL

PwC survey respondents still believe owning an Orlando rental property is a wise and lucrative investment, scoring the city 7^th for overall real estate prospects and 9^th for development/redevelopment opportunities. Thanks to its diverse economy, Orlando has higher job growth and a lower unemployment rate than the rest of the country. Given Orlando’s projected population growth for the coming 5 years, it doesn’t come as a surprise that the majority of respondents (a whopping 75%) recommend buying multi-family homes for investment. The fact that nearly two-thirds (65%) of the local population are renters also explains why Orlando is one of the best places to invest in real estate.

Of course, the tourism industry has always thrived in Orlando. The city is not only one of the most visited in the US, but it’s also a leading tourist destination worldwide thanks to the many theme parks and other tourist attractions. According to PwC, the expansion of the rail link from Miami to Orlando – which is now under construction – will boost this already robust tourism. This translates into the Orlando real estate market being one of the best places to buy rental property for both traditional and Airbnb investing. Keep in mind, however, that it’s illegal to rent out non-owner-occupied Airbnbs in Orlando.

If you’re a resident in Orlando and want to enjoy Airbnb rental income, try house hacking. This strategy entails buying an owner-occupied property with multiple units (like a duplex, triplex, etc.), living in one unit, and renting out the others. House hacking has proven to be a successful way to enter the real estate investing business, especially for those hosting on Airbnb.

• Median Property Price: $339,654
• Price/Square Foot: $180
• Traditional Rental Income: $1,701
• Airbnb Rental Income: $2,640
• Days on the Market: 86
• Price-to-Rent Ratio: 16

#8. Atlanta, GA

After ranking 11^th in last year’s Emerging Trends report, Atlanta has finally landed in the top 10 best cities to invest in real estate. This year, the city ranks 8^th for overall prospects, 7^th for development/redevelopment opportunities, and 10^th for investor demand. The strong net migration over the last few years, a high percentage of young residents, and an above-average labor force participation rate are the main factors behind the strong Atlanta housing market trends. Not to mention Atlanta is an important transportation hub and home to the world’s busiest airport in terms of passenger traffic.

Similar to other housing markets that made the list, Atlanta promotes its “unique culture” and successful reinvention. The fact that Georgia is one of the most landlord-friendly states in the US also contributes to investor confidence when investing in Atlanta rental properties. The report mentions a few issues evident in the Atlanta housing market, however, including land costs, construction costs, and labor costs pressing on both residential and commercial affordability. Nearly 60% of Atlanta’s population are renters, which is an indicator of strong rental demand in the city. Hence, investors can find positive cash flow properties and get a good ROI.

• Median Property Price: $428,874
• Price/Square Foot: $232
• Traditional Rental Income: $2,064
• Airbnb Rental Income: $2,185
• Days on the Market: 73
• Price-to-Rent Ratio: 17

#9. Los Angeles, CA

The Los Angeles real estate market fell from 7^th to 14^th in last year’s Emerging Trends report. Now, it’s back on top, ranking at #9 for overall prospects and #8 for investor demand. LA’s metropolitan area is estimated to hold 13 million people, making it the 2^nd most populous city in the US (after New York). It is a world economic center that generates over $1 trillion in gross metro product. With a strong economy supported by diverse industries including entertainment, aerospace, tourism, and technology, Los Angeles has deservedly earned its spot as one of the best places to invest in real estate in the US.

While prices of Los Angeles homes for sale are high, this is expected when talking about one of the most competitive markets in one of the hottest locations in the US – California. This, along with the high local cost of living, explains why the majority of residents (64%) in Los Angeles are renters. In turn, this is a positive indicator for rental property owners as it means a wide renter pool and high rental demand in the Los Angeles housing market. This fast-paced city isn’t slowing down for anyone, so if you want a piece of the action, we recommend you start your investment property search now!

• Median Property Price: $812,571
• Price/Square Foot: $482
• Traditional Rental Income: $3,324
• Airbnb Rental Income: $3,769
• Days on the Market: 76
• Price-to-Rent Ratio: 20

#10. Seattle, WA

The final city on this list of markets to watch for real estate investing is Seattle. Re-entering the top 10 list is a huge improvement for the Seattle housing market which ranked 16^th in last year’s Emerging Trends report. The city also ranks 4^th for investor demand. This is supported by factors including the strong development/redevelopment opportunities, job density, projected net migration, and an overall strong economy. The PwC report also said that Seattle real estate remains in “expansionary mode”, following a national trend of the longest economic expansion in US history.

The good news for Seattle real estate investors is that home prices have finally begun to level off after years of above US average increases. This trend doesn’t mean that the Seattle housing market is going to crash, but it’s a sign of a healthy correction. While the Seattle real estate market isn’t looking too strong on the growth prospect, the above-mentioned real estate prospects still make buying a rental property (in the right part of Seattle) quite a profitable investment.

For more information, read our Seattle Housing Market Forecast for 2022.

• Median Property Price: $665,618
• Price/Square Foot: $502
• Traditional Rental Income: $2,315
• Airbnb Rental Income: $2,753
• Days on the Market: 61
• Price-to-Rent Ratio: 24

Now that you know where the best places to invest in real estate are and the reasons why they’re on top, are you ready to start your investment property search in one of them? If yes, remember that Mashvisor provides you with the tools every investor needs to find and analyze rental properties for sale in the city and neighborhood of your choice in a matter of minutes! To start making smart investment decisions using real estate data and predictive analytics, start out your 7-day free trial with Mashvisor now.