The Best Places to Buy Rental Properties Right Now

Written by Ashley Sutphin Posted On Wednesday, 26 August 2020 05:00

If you’re considering buying an investment property, some locations are faring better than others right now. Of course, we’re in an unprecedented time because of coronavirus, but people who are still financially secure may be looking for investment opportunities.

Big cities and metropolitan areas aren’t ideal to buy rental properties right now. Many of these areas were hit hard by the pandemic, and a lot of residents are considering leaving. There was a sense during pandemic lockdowns that urban dwellers started to want more space and outdoor areas, as they were spending more time at home.  

Beyond that, certain factors can make one city better than another in terms of investing in a rental property.

First, you want to think about the home value index.

You have to be able to afford whatever rental property you’re considering, and as an investor, you may be priced out of locations like New York or San Francisco.

You’ll want to think about how home values are increasing in areas you’re considering, and then you can think about the rent index and year-over-year rent growth. Unemployment rate, job growth rate, and median age are all other factors to eye as an investor.

Right now, some of the cities you might want to look at if you’re an investor include:

Charlotte, North Carolina

Charlotte is known as one of the most business-friendly cities in the country. From an investment standpoint, a lot of young professionals move there for jobs in banking and finance, as well as to start their own businesses.

The gross rent multiplier has gone up in the city, as home prices have as well.

Charlotte is a relatively young city with a median age of 33.9, and the city had a population growth rate of nearly 20% from 2010 to 2018.

Orlando, Florida

While the Sunbelt states have seen headwinds in terms of coronavirus infection numbers throughout July, these states still remain high on many people’s relocation lists. The weather is nice, the taxes are low, and the economies are strong in these states, including Florida.

Orlando's home values were rising significantly before the pandemic, but there is an expected drop in home prices in Orlando in the coming months which may make it affordable to buy in.

A lot of Orlando’s residents choose to rent for one reason or another, and PwC and Forbes have both ranked the city as one of the best places to buy a rental property over the past few years.

Dallas, Texas

The Dallas real estate market is appealing for homebuyers and investors because the prices tend to be somewhat lower than what you find in other cities that have similar job prospects. Dallas and Texas as a whole are considered highly business-friendly, and there are a low cost of living and taxes.

Popular areas of Dallas for investors to look in if they plan on renting out a property include the West End Historic District and the Arts District.

Atlanta, Georgia

Atlanta is a culturally diverse city that has a lot to offer investors. Atlanta has seen quite a bit of growth in both employment and population, both of which tend to signify a strong real estate market.

Georgia is considered one of the most productive states in the country when looking at contributions to GDP, and you can find good investment properties for as low as $70,000. There’s a lot of opportunities to purchase older properties and rehab them for renters.

The median rent per month in Atlanta is $1,500, and 500 people move to the city every day.

Denver, Colorado

Finally, Denver is one of the best places to invest, according to many analysts because there are a strong economy and good job creation. Tourism is also a big industry in Denver, and jobs are the main reason people move to the city.

The population has been consistently growing in Denver, and a third of people in the metro area are renters.

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