“If you don’t own a home, buy one. If you own a home, buy another one. If you own two homes, buy a third. And, lend your relatives the money to buy a home.” — John Paulson, investor and multi-billionaire.
People have always said it is smart to invest in real estate, but why? Real estate is simply the most secure and profitable domain in which you can invest. Even when the general global financial situation is not accommodating for investors, real estate remains excellent for investment.
Considering this, you might be deciding or have already decided to invest in real estate. Either way, the most important question you need to be asking yourself is, “In which place do I invest?”
Since the real estate market is slowing down due to a large number of properties coming back into the market, investing in real estate isn’t the easiest in 2019. You need to have solid knowledge about the place you’re planning to invest in including its job and population growth as well as the financial capacity of people. In this blog post, we list down various cities that are feasible in terms of real estate investment.
The best cities to invest in real estate
Browse our list to see which cities may be the best to invest in real estate. Think about your location and capital to help find a place that will give you the most bang for your buck.
1. Houston, Texas
Houston is the breeding ground of 49 Fortune 1000 companies, which makes it one of the most accommodating cities for businesses in the country. It also has a lot of oil money. In addition, The Houston Medical Center is the largest medical center in the world with around 7.2 million visitors per year. Not to mention the important presence of NASA’s Mission Control. All these facts add up to Houston being a very profitable and being one of the best cities to invest in real estate. Below are some market observations:
- Current Median Home Price: $159,000
- Median Rent Per Month: $1,440
- Median Household Income: $62,000
- Metro Population: 6.9 M
- 1-Year Job Growth Rate: 3.75%
- 6-Year Equity Growth Rate: 36.70%
- 6-Year Population Growth: 15.87%
- Unemployment Rate: 4.1%
2. Cleveland, Ohio
Being the 12th largest economic zone in the country with a workforce of over 2 million people, Cleveland is definitely one of the most flourished markets. Between 2010 and 2015, the number of people moving to downtown Cleveland increased by 77%. This obviously requires no further elaboration as to why real estate business would blossom here. Most of these people who moved are younger people which is just another surplus. Therefore the reason for this is the massive infrastructure development that has been planned and going on since 2010, attracting tourists as well as the locals. Below are some market observations for this booming city:
- Current Median Home Price: $129,000
- Median Rent Per Month: $1,152
- Median Household Income: $52,000
- Metro Population: 2.1 M
- 1-Year Job Growth Rate: 2.12%
- 6-Year Equity Growth Rate: 15.24%
- 7-Year Population Growth: -0.82%
- Unemployment Rate: 6.4%
3. Brooklyn, NY
The real estate business in Brooklyn is one of the most expensive in the country, but it is also the number one most popular market in the country and number two globally, behind only London. If you aren’t looking to build an empire, maybe Brooklyn isn’t your place. Then again, it is the most promising market in the country just because it is in New York. So, even if you are looking for a one-off investment, why not invest in real estate here?
Because living expenses are very high in Brooklyn, there’s always the option of getting a turnkey property. A turnkey property is a unit that is fully furnished and renovated. After that, all you have to do is purchase it and rent out the unit which is especially helpful for buying properties in Brooklyn while living in another city. This process can be done by yourself, or you can always hire a property management company to find tenants, collect rent, and more. Some market stats for Brooklyn:
- Median Property Price: $1,110,259
- Traditional Rental Income: $3,239
- Days on the Market: 137
- Price-to-Rent Ratio: 28.56
4. Lakeland, FL
Lakeland is one of the most cost-effective cities for living in Florida. While the most unknown city on our list, Lakeland is consider one of the best cities to invest in real estate. Many people who work in larger cities like Orlando and Tampa prefer living in Lakeland and commuting to their job daily. Even though this city went through a major financial crisis after the ’08 crash, with the advent of new, cheap housing developments, it is starting to turn that around for good. And not just the commuters who are moving in Lakeland. For instance, students are also choosing it over larger, more expensive cities.
Due to its warm weather coupled with new housing developments at lower prices, older people and middle-class families are moving in too. Above all, this is pointing to a rising real estate haven in Florida, and there is no better time than now to start investing in real estate here. We list below some forecasts for this city’s real estate:
- Forecasted median home price: $161,757
- Predicted sales growth: 5%
- Predicted price growth: 7.4%
5. Atlanta, Georgia
Being the third largest metropolitan city in the Southeast, Atlanta has attracted families from the South as well as the Midwest for decades. Even though this trend in movement has slowed down recently, the city has been well-developed and has a stable market on which you can put your bet.
The housing market is supported by a strong job market that captures many high-paying workers. Atlanta’s FinTech sector is robust. About 70% of world money transactions move through Georgia. From 2010 to 2017, there has been a near 50% increase in tech jobs in the city. It is no wonder why Forbes ranks this city as the top 7th place where you should invest in real estate. Below are some in-depth statistics of the city:
- Metropolitan statistical area: Atlanta-Sandy Springs-Roswell, GA
- 5-year projected population growth: 1.3% (PwC, 2018 – U.S. average is 0.7%)
- Median age: 33 years old (City Data, 2016 – U.S. median is 38)
- Median household income: $53,843 (City Data, 2016 – U.S. median was $57,617)
- 5-year projected employment growth: 1.0% (PwC, 2018 – U.S. average is 0.6%)
- Rent-to-household-income ratio: 22.1% (PwC – less than 30% is ideal)
- Year-over-year rent growth: 1.5% (Rentonomics, 2018 – U.S. average is 1.5%)
- Median single-family home sale price: $224,100 (NAR, Q3 2018 – U.S. median is $266,900)
- Year-over-year home sale price growth: 9.7% (NAR, Q3 2018 – U.S. median is 4.8%)
6. Grand Rapids, MI
This may come to you as a surprise for a city that has traditionally relied on the furniture manufacturing industry. Many people wouldn’t even know or remember this city without its history in furniture, but if you are looking for real estate investment opportunities, this is it.
Like all other smaller cities, there comes a time when its low cost of living and buying property attracts companies which, in turn, attracts families. Grand Rapids is no different and has actually become a hotspot for quality education and research in recent years. With major companies like Amazon operating in this city, it’s high time for real estate investors to start spending money here. Some forecasts for this city include:
- Forecasted median home price: $187,319
- Predicted sales growth: 4%
- Predicted price growth: 8.2%
7. Nashville, TN
Nashville is one of the brightest overall real estate prospects in the country. Some believe that for home building, it may be the number one city. The primary reason for Nashville’s rise in the real estate market is its excellent employment numbers. This stable job market has attracted more and more people to move in, which justifies its rank among the real estate havens in the country. Moreover, it is a known tourist attraction, and that makes rental real estate a hot affair. The Nashville real estate market looks very attractive. Below are some market observations for Nashville:
- Median Property Price: $413,592
- Traditional Rental Income: $1,753
- Airbnb Rental Income: $3,452
- Days on the Market: 79
- Price-to-Rent Ratio: 19.66
8. Phoenix, AZ
This desert oasis makes our list of best cities to invest in real estate and has rapidly grown over the last three decades. “We sell sun here, and it sells really well,” says Kristy Ryan, a real estate agent with Re/Max Fine Properties in Phoenix. “We have a ton of California people moving here – all day, every day,” added Ryan. Whether it is retirees or just families who are looking for a place with round the year sun but not nearly as expensive as Seattle, San Francisco or Los Angeles, Phoenix has become a getaway for all such people, mainly due to its low prices. Also, since people are moving to the city quite rapidly, real estate opportunities are growing in the same way. You might want to invest here if you are looking for a low-key place to buy a property.
The economy is strong in Phoenix and continues to grow. Phoenix-area has a significant military presence that also boosts that economy. We list some forecast about this emerging real estate city:
- Forecasted median home price: $267,318
- Predicted sales growth: 3.6%
- Predicted price growth: 5.6%
9. Chicago, Illinois
Chicago is rated as the 4th most prosperous city in the world in terms of economic growth and stability. It currently hosts 30 fortune 500 companies that produce a sum of $500 billion GDP. That amount is actually more than the GDPs of some smaller countries like Belgium. This is the scale at which business is carried out in this city. To enter the market, you have to have a substantial amount of investment at your disposal. But due to extremely high living expenses in this city, many people have taken off to nearby neighborhoods, increasing the value of these suburban homes.
Again, like the other big cities we have discussed above, Chicago’s massive economy, stable market, and considerably large population makes it one of the hottest and best cities to invest in real estate in the country. If you can afford to buy a few properties in the city, you might reap great financial gains. If you want to a smaller real estate investment, buying a home in the suburbs may be better. Below are some market observations:
- Median Household Income: $63,000
- Current Median Home Price: $196,000
- Median Rent Per Month: $1,542
- 6-Year Equity Growth Rate: 24.0%
- 7-Year Population Growth: 0.65%
- Unemployment Rate: 5.4%
Burbz – The smart way to invest in real estate
Once you buy a rental property, you will need to find tenants, verify their income and background, draw up leases, and more. Don’t forget about managing your rental property and ensuring the tenant is abiding by the lease terms. Above all, these items can take up all of your free time, even if you are an experienced landlord.
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