If you’ve ever considered investing in real estate, now might be the right time. While 2021 has proven to have many financial ups and downs, you might have the opportunity to make a solid profit from selling or renting out an investment property. It’s one thing to know that residential real estate can be a smart investment; it’s another to know which homes will make the greatest profit when it’s time to sell. As with all investments, you can increase your odds of a successful real estate investment by targeting the right cities. There are certain cities across the United States that offer more opportunities for real estate investors. Read on to learn about the best cities for real estate investment in 2021.
Best Cities For Real Estate Investment, Ranked
When it comes to buying investment property, the location you choose can make all the difference. Aside from the property’s location, it’s also important to look at a few other key factors when evaluating rental returns and choosing where to invest. For example, you should be aware of the location’s rent as a percent of income, jobs, vacancy rate, home prices, industry, and population and its growth rate.
When conducting the research for gathering the best cities for real estate investment, we analyzed data from the U.S. Census Bureau, RedFin’s Data Center, and Zillow Research. Those key indicators were how we ultimately determined this list.
1. Orlando, Florida
- Median sales price: $231,000
- Median rent per month: $1,486
- Most-visited tourism destination in the country
- Fastest-growing metropolitan region in the nation
Reaching the top of our list is Orlando, Florida. Ranked as Forbes’ #1 Best Place to Buy a House 3 years in a row, Orlando is known for being an affordable location with plenty of social and economic benefits. With about 2.6 million residents, Orlando’s population has continued to grow 252% faster than the national average over the past 8 years. On top of population growth, Orlando’s job growth is one of the best in the country, with a 3.44% 1-year job growth rate and over 45,000 new jobs created in the last year. In addition, Orlando’s tourism and job market growth in leisure and hospitality are at significant highs.
2. Atlanta, Georgia
- Median sales price: $190,000
- Median rent per month: $1,434
- Population about 5.9 million
- 53,700 new jobs were created in Atlanta over the past year
Next on our list is Atlanta, Georgia. Known as the third-largest metropolitan region in the Southeast, Atlanta’s population has grown by 12.18% in the last 8 years, which is 111% faster than the national average of 5.76%. In addition, many tech-based and financial companies like Google and BlackRock are growing in Atlanta, helping to contribute to the area’s annual job growth rate of 2.15%. Atlanta is also a very affordable city, with the median purchase price of a 3 bedroom single family home at $190,000, which is 15% lower than the national average of $222,000.
3. Las Vegas, Nevada
- Median home price: $296,730
- Median rent per month: $1,107
- Most-populated city in Nevada and 28th most populous city in the U.S.
- Population about 2.7 million, a 2.98% increase from last year
Las Vegas, Nevada is known for its booming industries. Not only is the city popular for its tourism, gaming, and entertainment, but it also has a thriving industrial sector and growing high-tech, financial scape. As new businesses continue to arise, Las Vegas is continuing to attract new residents and fuel this year’s real estate market trends.
4. Charlotte, North Carolina
- Median home price: $252,438
- Median rent per month: $1,259
- Home values have risen 5.3% over the past year
- 07% of residents own and 47.93% of residents rent
Recognized by CNBC as the third-best city in the country to start a business, many people have moved to Charlotte to partake in a variety of business and social benefits. In addition, the city is known for having an urban-suburban feel with a booming economy and strong culture. With a job growth rate of 3.10%, Charlotte has transformed into a significant location for finance, with the second-most banking assets after New York City.
5. Dallas, Texas
- Median sales price: $215,000
- Median rent per month: $1,624
- Fourth-most populous metropolitan area in the nation, with 7.5 million residents
- Population has increased by 17% over the past 8 years, which is 201% faster than the national average
Known as the #1 metro area for job growth in the last year, Dallas has attracted many companies to set up base in the city due to fewer business regulations, lower taxes, and an overall lower cost of doing business. With an annual job growth rate of 2.70%, Dallas has added over 100,200 new jobs to their economy in the past year. On top of an increase in jobs, Dallas is also a desirable location for people to live because of the lower cost of living offered to employees. For example, in 2019, the median price of a 3-bedroom home was $145,000, which is 35% lower than the national average.
6. Columbus, Ohio
- Median sales price: $183,000
- Median rent per month: $1,310
- 7-year equity growth rate: 51.24%
- com named Columbus the fourth-hottest housing market in the country
The capital of Ohio and largest city in the state is known for being a tech centric location and one of the best cities to live and work in the country. Among this industry and many others, Columbus has had steady job growth within the past few years. In addition, its population has grown over 10% in the last 8 years, making Columbus the 14th-largest city in the United States with over 2.1 million residents.
7. Phoenix, Arizona
- Median sales price: $269,175
- Median rent per month: $1,141
- Home values have increased 8.0% in the last year
- Largest city in Arizona and fifth-largest city in the country with 1.7 million residents and a 1.6% population growth
Not only does Phoenix have hot temperatures and sunshine, it also has affordable real estate and offers a strong return on investment. Phoenix is known to be one of the highest appreciating locations in Arizona and the country. Due to its lower cost of living, variety of job opportunities, and future potential, Phoenix is predicted to be one of the top housing markets this year.
8. Houston, Texas
- Median sales price: $175,000
- Median rent per month: $1,517
- Population is about 6.9 million and is growing at a rate 206% faster than the national average
- 8-year population growth: 17.64%
Named one of the best cities for young entrepreneurs and one of the best places to live, Houston has a lot to offer professionals that goes beyond being a city known for space, medicine, oil and big businesses. In addition to its economic environment, Houston is known for its affordability. In fact, its median price for a three-bedroom home is 21% lower than the national average. These prices combined with its bustling businesses makes Houston an obvious location for real estate investors to consider.
9. Jacksonville, Florida
- Median sales price: $189,000
- Median rent per month: $1,409
- Median home price is 15% less than the national average
- Jacksonville has four Fortune 500 companies and 13 of Forbes Global 500
While Jacksonville might not come to the front of your mind when thinking about the best cities for real estate investment, Jacksonville, Florida has a lot to offer investors. With over 1.5 million residents and a population increase of 14% within the last 10 years, Jacksonville has put itself on the map for being a city bustling with industry and an outstanding health care system. With this population growth has also brought an immense amount of jobs to the city, and that number is predicted to continue rising with an estimated 39.21% job growth in the next 10 years.
10. Colorado Springs, Colorado
- Median sales price: $323,194
- Median rent per month: $1,140
- Home values have increased by 7.6% in the past year
- Annual appreciation rate: 4.80%
If you’re thinking about investing in real estate in Colorado, look past Denver and consider Colorado Springs. Believe it or not, an investor can buy two homes in Colorado Springs for the price of one in Denver. Traditionally known as a city for agriculture, Colorado Springs has witnessed a 5.5% gain in non-farm jobs within the past few years. Because of this, it was named by Wallet Hub as the fifth-best city in the U.S. to find a job in 2019. Now, the city continues to grow and progress as one of the country’s hottest sellers market.
11. Sacramento, California
- Median sales price: $358,300
- Median rent per month: $1,438
- One of the most affordable big cities in California with a population of 2.1 million and a growth rate of 1.29% annually
- Sacramento has high appreciation rates and is in the top 10% for appreciation in the U.S.
With many jobs being remote, residents of California and the west coast are looking to buy or rent property that will give them the most space for the most affordable price. In addition, one in four residents of the San Francisco Bay Area are thinking about moving to Sacramento. With that being said, Sacramento, California is becoming a popular place for rest estate investors to take advantage of.
12. Tampa, Florida
- Median sales price: $225,250
- Median rent per month: $1,485
- Population of 3.1 million and 8-year population growth rate of 12.69%
- 7-year equity growth Rate: 106%
Another popular city in Florida for real estate investment is Tampa. Due to their bustling economy worth over $130 billion and their booming financial and health care industries, Tampa has a job growth rate 71% over the national average. In addition, Tampa has four Fortune 500 companies and plenty other successful organizations, putting the city on the map for being one of the best performing cities in the country. Tampa is also known for their tourism and sunny weather, making it a spot for retired professionals and short-term dwellers looking for apartments to rent.
13. Indianapolis, Indiana
- Median sales price: $164,400
- Median rent per month: $1,172
- Population of over 2.1 million, 8-year population growth rate of25%
- 7-year equity growth rate: 45.00%
If you haven’t heard the buzz about Indianapolis, it’s about time you get in the loop. Indianapolis, Indiana is ranked as one of the best downtowns and is known for its entertainment and job market. With Fortune 500 companies and extensive employment in the bioscience fields, Indianapolis is quickly attracting professionals to the second largest city in the Midwest.
The Bottom Line On Real Estate Investment
Investing in real estate, especially in the above cities, can be very profitable. While there can be great reward, you should always remain cautious before investing in real estate.
Looking to invest? Speak with a mortgage expert to talk about your options.