Where to Invest in Real Estate

The COVID-19 pandemic has hit the US housing market very hard. Due to the massive loss of jobs, many tenants are unable to pay rent, meaning loss of income for landlords. Many property owners are falling behind in mortgage repayment due to a low return on investment. Here are a few other effects of coronavirus on the real estate market:

Fewer buyers – Due to financial constraints, many Americans currently are not in a position to purchase a real estate investment. This low demand is having an adverse effect, especially on fix-and-flip investors.
Limited access to capital – With people’s finances being so uncertain, many lenders are hesitant to provide loans for buying income property.
Scarce contractors – With the stay in place and social distancing orders, real estate investors are struggling to find contractors for their projects.

With the slowdown in the real estate industry, it might look like 2020 is not a good year to buy property.

However, buying short or long term rental properties during a recession might just be the wise thing to do. Since there is little demand for investment properties, you are more likely to find a good deal in the hottest real estate markets. In addition to this, COVID-19 has seemingly pushed mortgage rates to their lowest. All around, now is a good time to invest in real estate if you’re in a good financial place and plan on renting out property vs fixing and flipping it.

The 6 Best Places to Invest In

Here are the 6 best places where to invest in real estate.

Wondering where to invest in real estate? These are some of the best places to invest in real estate based on high cash on cash return. The data is drawn from Mashvisor’s real estate market database:

#1. Livonia, MI Real Estate Market

Median Property Price: $242,697
Price/Square Foot: $157
Traditional Rental Income: $1,777
Traditional Cash on Cash Return: 3.3%
Days on the Market: 48
Price-to-Rent Ratio: 11

Livonia is a city located in Wayne County, Michigan State. According to bestplaces.net, the city has a population of about 94,708, a median income of $69,386, and a low unemployment rate of 2.3%. The city is a hub of manufacturing, research, and industrial operations, the major employers being Ford Motor Company, Livonia Public Schools, ZF Automotive, United Parcel Service, and Schoolcraft College. With its spacious parks and family-friendly recreation facilities, Livonia is indeed an ideal place for cash flow property investment. It’s true that it is currently a very hot seller’s market, but the affordable real estate prices can’t be beaten.

#2. Bartlett, TN Real Estate Market

Median Property Price: $264,428
Price/Square Foot: N/A
Traditional Rental Income: $1,738
Traditional Cash on Cash Return: 3.2%
Days on the Market: 54
Price-to-Rent Ratio: 11

Data from worldpopulationreview.com shows that the population of Bartlett is about 59,709, with a growth rate of 0.33% in 2020. The city has a poverty rate of 6.43% and an average household income of $95,555. According to bestplaces.net, the job market has increased by 2.1% over the past year and is expected to grow by 40.2% over the next ten years. The major industries in the city include manufacturing, retail trade, education services, transportation, and warehousing.

#3. Saint Cloud, MN Real Estate Market

Median Property Price: $211,027
Price/Square Foot: $113
Traditional Rental Income: $1,371
Traditional Cash on Cash Return: 3.0%
Days on the Market: 71
Price-to-Rent Ratio: 13

With a population of about 68,505, Saint Cloud is the 11th largest city in Minnesota. It is currently growing at a rate of 0.34% annually. And more than half of the population lives in a rental property, meaning landlords enjoy good occupancy rates and cash flow here. Figures from worldpopulationreview.com reveal that the average household income in the city is $63,650. The top employers include St. Cloud State University, St. Cloud School District, Capital One, St. Cloud VA Medical Center, and Coborns Inc. With its vibrant economy and a myriad of recreation facilities, Saint Cloud is definitely a place worth considering for anyone looking for where to invest in real estate.

Find a Profitable Traditional Rental Property

#4. Mesquite, TX Real Estate Market

Median Property Price: $214,285
Price/Square Foot: $135
Traditional Rental Income: $1,410
Traditional Cash on Cash Return: 3.0%
Days on the Market: N/A
Price-to-Rent Ratio: 13

Known as the ‘Rodeo Capital of Texas’, Mesquite is a city characterized by a humid subtropical climate. According to bestplaces.net, the population is 144,118, and the median age is 32.8. With the population being on the younger side, the number of renters is quite high – close to 43% of the population. The median income is $49,837, with the largest employers in the city being United Parcel Service, City of Mesquite, Dallas Regional Medical Center, Sears, and Texas Department of Transportation. Real estate investors will also be happy to know that the Mesquite real estate market is currently a cool buyer’s market, according to Zillow.

#5. Redford, MI Real Estate Market

Median Property Price: $122,557
Price/Square Foot: $106
Traditional Rental Income: $1,070
Traditional Cash on Cash Return: 2.9%
Days on the Market: 76
Price-to-Rent Ratio: 10

Redford is located in Wayne County and is a charter township. Statistics from neighborhoodscout.com show that the main employment industries include manufacturing, healthcare, retail, accommodation, and education. It has a population of 47,213 and a median household income of $56,377. Redford’s low crime rate, sense of community, and racial diversity make it an ideal place for a traditional or Airbnb investment property.

#6. Pahoa, HI Real Estate Market

Median Property Price: $236,438
Price/Square Foot: $187
Traditional Rental Income: $1,453
Traditional Cash on Cash Return: 2.9%
Days on the Market: 137
Price-to-Rent Ratio: 14

Pahoa is located in Hawaii County and is a CDP – a census-designated place. It has a total area of 2.3 square miles and a racially-diverse population of 896. According to worldpopulationreview.com, the average household income in Pahoa is $56,874. With its rich culture and unique attractions, this is yet another great city for real estate investment. This is also thanks to the fact that it’s quite affordable compared to most locations in the Hawaii real estate market where the median property price is $937,883, according to Mashvisor’s data. And it’s a neutral market, so you should be able to find bargains here.

Now You Know Where to Invest in Real Estate

Just because a place is considered one of the best cities to buy rental property doesn’t mean that it is right for you. Your decision about where to buy cash flow properties should be determined by your risk tolerance, investment strategies, management style, and financial goals. Be sure to research the US housing market thoroughly before deciding where to invest in real estate. Don’t forget to analyze different locations and properties using Mashvisor’s real estate investment software.

To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.

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