Looking to buy a rental property? Before you start scouring listings, choosing the right market is a crucial first step. But don’t worry—we’ve done all of the hard work for you! In this article, we’re sharing 12 of the best places to buy rental property. No matter your investing goals—real estate cash flow, appreciation, or a combination of the two—there are several options for each. Keep reading!
Summary:
Rent to Retirement’s “IDEAL” formula helps real estate investors build wealth through income, depreciation, equity growth, appreciation, and leverage. Two of these levers—income and appreciation—are very market dependent, meaning you need to identify the area that will best help you achieve your financial goals—even if that means investing out of state!
Some areas are traditionally “cash flow” markets, while others are “appreciation” markets. In cash flow markets, properties are more likely to generate monthly income after all expenses (including your mortgage) are paid, but sometimes at the cost of stagnant property values. In appreciation markets, home values tend to increase more significantly over time, even though your investments might not generate much of a profit from month to month.
Do you want a property that will bring in some extra income each month and grow in value? Not every market will give you both cash flow and appreciation, but Rent to Retirement scours the US to identify markets that strike the perfect balance—so you don’t have to choose!
Ready to find a market that aligns with your investing goals? Here are 12 of the best places to buy rental property in the US—sorted by cash flow, appreciation, and hybrid markets!
If you’re aiming to create another income stream, here are some of the best cash flow markets:
With home prices well below the national average, Cleveland has one of the lowest price-to-rent ratios of all major metro markets. Although the city’s population has declined slightly over the last decade, it has stabilized in recent years.
Another Midwest cash flow market, Indianapolis possesses strong population and rent growth trends for its below-average home prices. What’s more, Indiana is one of the most landlord-friendly states in the US due to its fast eviction process and lack of rent control.
Browse high-cash flow turnkey rentals in top markets!
Yet another cash-flowing midwestern market, Kansas City commands healthy rents for its low home prices. In addition to regular income, investors benefit from equity growth, as Kansas City real estate has a 123% appreciation rate over the last decade.
Tuscaloosa is a proven cash flow market, boasting relatively low home prices and steady rent growth. What’s more, Alabama is considered one of the most landlord-friendly states, with a speedy eviction process, no rent control, and no security deposit limits.
Want to invest where property values are on the rise? Here are some of the best appreciation markets:
Since peaking in 2022, Austin home prices have steadily declined. However, Austin has strong fundamentals like job growth and population growth (the fastest-growing major metro in the US). If you can weather temporary price fluctuations, real estate values are likely to increase significantly in the long run.
Although its median home price is a little higher than some of the other markets on our list, Phoenix has favorable landlord-tenant laws, high rent prices, and a relatively low price-to-rent ratio for an appreciation market.
Looking for the perfect investing market? Schedule a free consultation with the Rent to Retirement team!
Although the South is known for its many cash flow markets, Raleigh is a clear appreciation play. Recently named the best-performing large metropolitan area, the city has an explosive job market, high population growth, and landlord-friendly housing laws.
Despite a relatively high price-to-rent ratio, Boise is one of the best places to invest in real estate, especially if appreciation is your main goal. The city’s median home price has increased significantly over the last decade, as has its population.
Don’t want to choose between cash flow and appreciation? You can have both by investing in these markets:
One of the nation’s largest metro areas, Atlanta boasts high rental demand, driven by steady job and population growth in recent years. The city’s home prices pale in comparison to other major metros, and Georgia’s landlord-tenant laws are very favorable to investors.
Lehigh Acres is one of the best places to invest in property, as its low price-to-rent ratio gives investors a clear path to cash flow. Meanwhile, its home values have increased by a whopping 176% in the last decade, making it an equally promising market for equity growth.
Get cash flow AND appreciation with turnkey properties!
The Tampa area has the highest 10-year appreciation rate of any market on our list, and rent prices have kept pace, resulting in a low price-to-rent ratio. Florida is also a very landlord-friendly state, with no rent control, security deposit limits, or late fee limits.
People aren’t just vacationing in Orlando—they’re moving there, too! The city has a robust job market and reasonable home prices relative to other major metros, while rent growth and demand have held steady.
Whether you want cash flow, appreciation, or both, the best place to buy investment property is the market that gives you what YOU want from your investment! Rent to Retirement operates across over a dozen markets, giving you full choice of where to invest based on your financial goals!
Cities like Cleveland and Indianapolis are popular cash flow markets, while markets like Austin and Phoenix are solid bets for long-term appreciation. Some markets, like Atlanta and Tampa, offer a rare blend of cash flow and appreciation!
The 50% rule is a guideline for estimating rental property expenses. It states that your rental expenses (not including mortgage payments) equal roughly 50% of your gross rental income.
There is no “most profitable rental property,” as rentals can make money in different ways—such as cash flow, appreciation, and tax benefits. Turnkey rentals can be very profitable, as can apartment buildings, commercial properties, and other investments!