Buying a home or an investment property is a decision not to be taken too lightly! Real estate investors and home buyers are looking for the next big thing in real estate. This can help them make use of real estate appreciation through buying an undervalued property in a real estate market that will appreciate naturally as more and more investors and home buyers discover it. Here, we’ve gathered Mashvisor’s analytical data to come up with the most undervalued real estate markets in the US.
So, what are the most undervalued real estate markets?
After careful analyzing of the cap rate, cash on cash return, occupancy rates, and property prices, we’ve come up with the most undervalued real estate markets in the US housing market! They are listed below in no particular order:
Pennsylvania
With Pennsylvania’s proximity and central location, many cities have prospered economically and real estate wise! Let’s take a closer look at the Pittsburg real estate market through the following data that was provided by Mashvisor’s investment property calculator:
- Median Property Price: $263,713
- Airbnb Cap Rate: 4.09%
- Traditional Cap Rate: 1.7%
- Airbnb Rental Income: $2,042
- Traditional Rental Income: $1,200
Looking at the Pittsburg real estate market data, Pennsylvania offers affordable real estate housing in spite of skyrocketing real estate prices in neighboring states making it among the most undervalued real estate markets of today!
Additionally, the Philadelphia real estate market is growing along with the neighboring Pittsburg real estate market. With a median property price of $275,650, real estate investors are keenly looking into this undervalued real estate market. Both Airbnb investments and traditional rental investing are common in Philadelphia.
Maryland
The Maryland real estate market is one often hiding in the shadows of others. The Maryland real estate market is among the most undervalued real estate markets in the US housing market. With Baltimore taking all the heat for economic and financial growth, it’s making its journey to join other blossoming real estate markets. Here are a few stats analyzed by Mashvisor’s investment property calculator for the Baltimore real estate market:
- Median Property Price: $236,408
- Airbnb Cap Rate: 3.33%
- Traditional Cap Rate: 3.3%
- Airbnb Rental Income: $2,057
- Traditional Rental Income: $1,627
For Baltimore’s real estate market, real estate investors are going for both Airbnb and traditional rentals when looking for income properties.
If you’re not sure which rental strategy is the optimal rental strategy for your investment property, read this blog post: What Rental Strategy to Choose: Airbnb vs Renting Out Traditionally?
Illinois
The Illinois real estate market and more specifically the Chicago real estate market is reaching new highs for the nature of its real estate market. The Chicago real estate market is witnessing high real estate appreciation and a high rental income produced by investment assets. To demonstrate, here are a few stats for Chicago:
- Median Property Price: $426,203
- Airbnb Cap Rate: 0.90%
- Traditional Cap Rate: 1.05%
- Airbnb Rental Income: $2,635
- Traditional Rental Income: $1,895
Within the Chicago real estate market, real estate investors are going for real estate wholesaling and owning traditional rental properties. If you’re looking to invest in Airbnb Chicago, read this blog post: 4 Reasons to Invest in Airbnb Chicago Real Estate in 2018.
Tennessee
With Tennessee’s real estate market hitting high property prices, real estate investors are keeping an open eye on its investment properties. With Nashville real estate being on the center of the price peak, here are a few stats to demonstrate the solidity of this real estate market and why it’s among the most undervalued real estate markets in the US housing market:
- Median Property Price: $418,828
- Airbnb Cap Rate: 5.25%
- Traditional Cap Rate: 1.78%
- Airbnb Rental Income: $3,477
- Traditional Rental Income: $1,709
With an expected monthly Airbnb rental income of $3,477, real estate investors are going for Airbnb rental strategies to generate cash flow through their properties. It’s a great choice for investors looking for passive real estate investing.
Louisiana
The Louisiana real estate market is going steady, along with many other real estate markets in the US. This stability is enough to carry a real estate investing wave within smaller real estate markets in the areas such as New Orleans real estate and Shreveport real estate. Let’s take Shreveport as an example of Louisiana’s heated real estate. Here are a few stats about Shreveport real estate that groups it among the most undervalued real estate markets:
- Median Property Price: $234,565
- Traditional Cap Rate: 2.79%
- Traditional Rental Income: $1,297
In the Shreveport real estate market, real estate investors are going for single-family investment properties to grow their real estate investment portfolios. Keep in mind that with real estate and land prices being comparatively low, real estate investors have nothing to fear and view it as a low-risk investment.
How to spot a good deal within the most undervalued real estate markets
Spotting a good deal from afar can be a lot easier for expert real estate investors than for beginner ones. Therefore, it’s encouraged for novice real estate investors and even more experienced individuals to clear out all the speculations and guessing when investing in real estate. This can be done by conducting a real estate market analysis that can be encompassing enough to give a full assessment of an investment property. A proper real estate market analysis should include the cap rate, cash on cash return, and more often than not, Airbnb occupancy rates.
Wondering about the need for a real estate investment analysis? Read this blog post: The Importance of Real Estate Investment Analysis Before Buying a Rental Property.
With Mashvisor’s investment property analysis and real estate market analysis, you will be able to use the property finder feature by specifying your general needs out of an investment property, such as your budget! Give Mashvisor’s investment property analysis a shot and enjoy the 14-day free trial by clicking here.
To conclude
These were our top picks for the most undervalued real estate markets within the US housing market. Of course, with time, these real estate markets have a high possibility for growth due to the increase in population and economic growth. So, don’t wait too long before investing in one of the most undervalued real estate markets! Start investing today!
If you have any more insights on the most undervalued real estate markets, please share them with us in the comments section.