Looking for new rental property locations can be fun and exciting, but with so many options, it can become overwhelming. How do you know where to start?
This article serves as a guide to help you navigate what factors to consider when choosing where to invest in rental properties. In this guide, you’ll find a review of three cities ranging from large, mid-size, and small real estate markets with key factors that make each a desirable location.
Key Insights
- Most investors have a small real-estate portfolio, with an ownership average of 1.72 properties.
- Resources like rental management software and specialized rental property accounting software simplify the complicated processes of finding tenants, creating leases, and categorizing tax-depreciable expenses.
- Location and population are important factors when determining the best cities for real estate investment. Areas with military personnel, college campuses, and retirement activities are more likely to have consistent, long-term tenants.
Understanding Property Investment Opportunities by City
You will hear it on every real-estate television show: location, location, location! After you’ve decided on a city or town, examine different locations within that area. Consider surrounding institutions like schools, community events, demographics, and employment opportunities.
If you’re still undecided about potential cities or factors to consider, look no further! The cities included in this guide have steady numbers of new residents, good locations for recreation, robust school systems, and new businesses moving to and opening in the area.
Factors Determining the Best Cities for Property Investment
Since many investors think long-term, they tend to look for regions that foster continued growth and interest. Key factors that influence a city’s attractiveness for property investment include considerations like population growth, employment opportunities, home value increases, median sale prices, and average rent for the area.
Top Cities for Property Investment in 2024
Below are the three best cities for property investment in 2024, including large, mid-size, and small markets. No matter the size of the city, real estate investing looks for the potential for growth of the city.
City 1: San Antonio, Texas
All my exes live in Texas, and I hope they’re investing in this top real estate market! George Strait’s hometown is a great place for real estate investment due to great employment opportunities, extensive local recreation, and a safe city for young families.
San Antonio has steady population growth at 2.7% and is one of the largest Air Force bases in the country. The Joint Base has 80,000 active duty members, supports over 400 retired general officers, and has 250,000 civilian jobs. Many military members who live off-base choose to rent during their station, making San Antonio an excellent market for real estate investing.
The median rent in San Antonio sits at $1,760, and the average house sale totals $265,000. Experts predict that Zoomers (born between 1994 and 2000) will pay $128,673 in rent by age 30 in this top real estate market.
Further, San Antonio is highly ranked in recreation, with the city’s parks & recreation department maintaining 219 parks featuring facilities of swimming pools and splash pads, cultural enrichment programs like their Japanese tea garden, and a summer-long youth program for kids aged 6-14 focusing on sports, crafts, art, and STEM enrichment.
City 2: Providence, Rhode Island
Providence speaks for itself as one of the best cities for real estate investment. Between a surge in tourism to witness spectacular fall foliage and a massive rise in Fintech, Providence is quickly emerging as one of the top real estate markets.
Under an hour from Boston and three hours by train to New York City, Providence is an affordable mid-size market for real estate investing. The average house sells at $250,000 with rent comfortably in the $1,500 range for two bedrooms, making it 16% lower than the national median. East Providence has one of the highest average of leads per property at 156, with properties staying on the market for eleven days.
Additionally, the top 10 metro areas in Rhode Island are all within 20 miles of downtown Providence and have high walkability scores. These neighborhoods are ideal for college students as Providence is home to eleven higher education institutions, including Ivy League Brown University.
With a prime location, a sustained increase in jobs, and a growing population of college students, Providence is a great place for beginners to invest in real estate.
City 3: Greenville, South Carolina
Yeah, that Greenville, South Carolina! South Carolina’s third-largest city is a top market for real estate investing. Ranked #4 in the best places to live in the US, Greenville is one of the best cities for real estate investment in the South.
Greenville is also considered one of the best cities to retire, offering many entertainment avenues for seniors. For example, the Peace Center provides access to Broadway shows and concerts, while local nonprofits offer classes to their 55+ community in pottery, painting, fitness, ballet, crochet, and orchestra.
The median sale price for homes is around $350,000, up 11% from last year. Additionally, the average rent is $1,456, with some areas as profitable as $2,000 a month.
Again, location is key to successful real estate investing, and it doesn’t get much better than Greenville. The fastest-growing city in the state is conveniently located halfway between the larger cities of Charlotte, North Carolina, and Atlanta, Georgia. It has a small-town feel and traffic but the employment resources of a much larger city with easily commutable distances to companies like BMW, GE Power, and Lockheed Martin Aeronautics.
Additionally, the area is well-known and loved for its growing food scene. Eating and shopping locally is a top priority for the region, bringing in new businesses that are rare on the East Coast, like the beloved Texas burger chain Whataburger. Just this year, three restaurants were semifinalists for the James Beard Award, and many participated in the city’s seasonal food festivals.
Investment Tips
Do your market research: Understand which cities have high population growth and new job opportunities. Read the local news in cities you’re looking to invest in and check real estate listings for general trends. These sites give insight into HOA fees, local taxes, estimated mortgage monthly payments, and other rental properties in the area.
Look for growing areas in top real estate markets: Take advantage of up-and-coming neighborhoods that lead to successful property appreciation. Appreciation is the increase in value over time and is a common tactic used in real estate investing. Shark Tank’s Barbara Corcoran bought a NYC studio apartment that doubled in value, leading to a one-bedroom apartment purchase, eventually giving her the cash flow for her extensive real estate portfolio today.
Capitalize on economic factors: If you hear of new businesses coming to an area or construction that will lead to new jobs, consider investing in properties close to those locales. Remember, real estate can be a long-term commitment as it generally increases in value and adds stability to an investment portfolio. Day Trading Academy’s Marcello Arrambide says, “No matter what kind of business you run, you need land.”
How REI Hub Can Facilitate Property Investment in These Cities
REI Hub is a specialized rental property accounting software for real estate investors. Streamlined features like data imports, transaction matching rules, and batch-booking transactions ensure no headaches when categorizing revenues, expenses, and liabilities.
Customizable reports like net income (P&L), operating cash flow, net operating income, and balance sheet help to see the profitability of real estate investing. Reports like Schedule E and fixed assets schedules help ensure easily missed deductions aren’t overlooked. Ultimately, having an accurate and complete financial picture of your business helps to provide insight into wise future real estate investing decisions.
At REI Hub, we take customer support seriously and want to ensure your questions are answered and that you feel confident using our software and empowered to be your own bookkeeper.
No credit card or commitment is required when creating a free trial account to start so that you can evaluate the software and bookkeeping tools for yourself. You can also check out our publicly available demo portfolio or read through our Knowledge Base and online blog.
