If you’re wondering where to buy rental properties in 2020, you need to know the characteristics of the best places to invest in real estate. One of the most important ones is rent appreciation – meaning, the fact that rental prices keep going up. This is important for landlords and real estate investors because rent growth translates into strong demand for rental properties. In addition, investing in cities where the rental rate is growing means you have a good chance of finding and owning positive cash flow properties that generate high rental income every month. The question is: which US cities are experiencing rent price growth in 2020?
Rental Prices in the US Market 2020
In any rental market, monthly rent prices normally start going up in the early spring, peak in the summer season, and then cool off in the fall and winter. This year and due to the coronavirus pandemic, things are a little different. New renal data show that average rents fell nationally from March to April 2020 for the first time in years. In a previous blog, we explored whether or not rental prices will go down. The conclusion was this: yes, but not in all rental markets. The impact of the crisis on rent price appreciation hasn’t been very dramatic. Rents have flattened in a time when they’d usually trend up, but the good thing is that there hasn’t been a massive collapse in prices.
Read the full article and check the data here: Will Rent Prices Go Down in The US Market 2020?
Most importantly, we’ve found that rental rates are actually growing in some real estate markets. As you can expect, these are the best US cities to invest in for rental property income in 2020. So, if you’re interested in buying houses for rental income and cash flow, we highly suggest searching for investment opportunities in these cities. In this article, we’ll list down these top 15 cities as well as their real estate data and key metrics provided by Mashvisor including price to rent ratio, rental income by city, and more. To learn more about how we’ll help you make faster and smarter real estate investment decisions, click here.
10 Cities With Fastest Rent Growth Over The Past Year
Apartment List released its National Rent Report: June 2020 where it studied the US rental market. According to its rental market analysis, the national year-over-year growth rate is now 0.8% – the lowest rate that the company observed in May over the past five years. But, despite the fact that rental prices are softening, the report shows that some cities are currently experiencing rent growth. In fact, of the 100 largest cities that were analyzed, 29 saw rents increase over the past month. Here are the top 10 cities with the fastest rent price appreciation in 2020. Below, you’ll find Mashvisor’s rental data for each market, estimated using our Rental Income Calculator.
Source: Apartment List National Rent Report: June 2020
1) Mesa, AZ
- Traditional Rental Income: $1,653
- Median Property Price: $341,984
- Price Per Square Foot: $185
- Price to Rent Ratio: 17
- Days on Market: 46
2) Colorado Springs, CO
- Traditional Rental Income: $1,748
- Median Property Price: $434,825
- Price Per Square Foot: $177
- Price to Rent Ratio: 21
- Days on Market: 46
3) Phoenix, AZ
- Traditional Rental Income: $1,838
- Median Property Price: $431,544
- Price Per Square Foot: $215
- Price to Rent Ratio: 20
- Days on Market: 58
Read the full Phoenix real estate market report.
4) El Paso, TX
- Traditional Rental Income: $1,299
- Median Property Price: $228,556
- Price Per Square Foot: $115
- Price to Rent Ratio: 15
- Days on Market: 110
5) Nashville, TN
- Traditional Rental Income: $1,898
- Median Property Price: $472,820
- Price Per Square Foot: $5,481
- Price to Rent Ratio: 21
- Days on Market: 57
Read the full Nashville real estate market report.
6) Virginia Beach, VA
- Traditional Rental Income: $1,627
- Median Property Price: $415,452
- Price Per Square Foot: $202
- Price to Rent Ratio: 21
- Days on Market: 73
7) Fort Wayne, IN
- Traditional Rental Income: $1,274
- Median Property Price: $228,970
- Price Per Square Foot: $109
- Price to Rent Ratio: 15
- Days on Market: 59
8) Sacramento, CA
- Traditional Rental Income: $1,692
- Median Property Price: $417,650
- Price Per Square Foot: $268
- Price to Rent Ratio: 21
- Days on Market: 44
9) Arlington, TX
- Traditional Rental Income: $1,604
- Median Property Price: $289,199
- Price Per Square Foot: $136
- Price to Rent Ratio: 15
- Days on Market: 36
10) Wichita, KS
- Traditional Rental Income: $1,239
- Median Property Price: $286,261
- Price Per Square Foot: $113
- Price to Rent Ratio: 19
- Days on Market: 79
Start looking for and analyzing rental properties for sale in your city and neighborhood of choice now!
10 Cities With Fastest Rent Growth Over The Past 5 Years
When looking for where to invest in real estate, it’s important to look at rental prices and monthly rental income data and see whether they’ve been growing not only over the past year. Digging deeper and finding rent price appreciation data for previous years is also critical. This allows you to determine if a certain real estate market has been enjoying this trend of rent price growth in the past. As a result, you can safely assume that this trend will continue in the future. This also means that you can find rental income properties for sale that are guaranteed to be good real estate investments in 2020 and over the long-term.
According to Apartment List, the national average rent growth rate over the past 5 years is 9.6%. As you can see in the graph below, many cities have rent growth rates way above this average. In addition, five of the above-mentioned cities in the top 10 for the fastest year-over-year growth also made the list for the fastest rent growth over the past five years. This tells us that fast growth in rental prices is not a new trend in these markets. These cities are Mesa, Phoenix, Sacramento, Colorado Springs, and Arlington. Here are the other five cities and their real estate market data for 2020.
Source: Apartment List National Rent Report: June 2020
1) Stockton, CA
- Traditional Rental Income: $1,757
- Median Property Price: $338,774
- Price Per Square Foot: $208
- Price to Rent Ratio: 16
- Days on Market: 67
2) Henderson, NV
- Traditional Rental Income: $1,762
- Median Property Price: $578,272
- Price Per Square Foot: $226
- Price to Rent Ratio: 27
- Days on Market: 71
3) Tampa, FL
- Traditional Rental Income: $1,947
- Median Property Price: $461,797
- Price Per Square Foot: $226
- Price to Rent Ratio: 20
- Days on Market: 86
Read the full Tampa real estate market report.
4) Las Vegas, NV
- Traditional Rental Income: $1,435
- Median Property Price: $421,763
- Price Per Square Foot: $217
- Price to Rent Ratio: 24
- Days on Market: 82
Read the full Las Vegas real estate market report.
5) Long Beach, CA
- Traditional Rental Income: $3,246
- Median Property Price: $829,111
- Price Per Square Foot: $529
- Price to Rent Ratio: 21
- Days on Market: 78
If you’re still unsure where to invest for real estate rental income, we put together the ultimate guide for you. Check it out here: How to Choose a Real Estate Market to Invest In.
The Next Step for Investors
Now you know the 15 best US cities where rental prices are growing, making them great locations for real estate investing in 2020. However, your due diligence is not over yet. You need to narrow down this list to determine the city where you’ll start your investment search and actually find a profitable rental property. Mashvisor’s real estate investment software will help you in that and it’ll only take you a matter of minutes.
First, the median property price data helps you quickly find the city where home prices fit your budget for investing. Then, you can use the Real Estate Heatmap tool which allows you to analyze the neighborhoods within the city based on key metrics including the listing price, monthly rental income, and cash on cash return. In turn, this helps you narrow down the location of your future rental property investment even further.
On top of that, Mashvisor’s Property Finder will help you find rental income properties for sale in the city of your choice using filters so you can set your personal criteria. Finally, our Rental Income Calculator allows you to calculate rental income and provides a readily available rental property analysis. This tool uses reliable rental comps in the location to provide not only rental income estimates for every listing, but also its estimated expenses, cash flow, cap rate, and more.
With our tools, you’ll guarantee to invest in a city where rental prices are growing and to find the best investment property for you. If you’re ready to begin your search, start your 7-day free trial with Mashvisor now.