Best U.S. Markets to Invest in Real Estate

Written by Rebecca Kennedy Posted On Wednesday, 06 July 2016 12:04

Dabbling in the world of real estate investment for the first time can feel like risky business... but if you play your cards right, you can also strike it big. For new would-be investors, this fine line can seem all too easy to cross. So, what's the secret? According to experts, it's all about paying attention to the trends and using those numbers to make projections about the future health of various real estate markets. This includes looking at stats such as unemployment rate, population growth, and housing price growth forecasts.

That said, you don't have to go about interpreting these numbers all on your own; that's what the experts are for! Here are the best U.S. markets for investing in real estate according to the pros.

Florida: the land of investment opportunity.

Based on a study completed by Local Market Monitor, a data company based in North Carolina, Florida is one of the top booming markets in terms of real estate investment opportunities. All in all, seven Florida cities snagged a spot on the company's list of 20 "Best Buy Cities" for 2016. These cities include Orlando, Fort Lauderdale, Cape Coral, North Port, Jacksonville, Tampa and West Palm Beach. Miami was also called out as a hot real estate investment market by BiggerPockets, thanks to its 18.6% year over year ROI and public perception as a great place to live.

Orlando, the number two overall city on the Local Market Monitor list, boasts 6.7% population growth from 2011 to 2014, 3.7% annual job growth, and a 28% three-year home price growth forecast. The current average home price is $202,809. Combined, these figures point to an increasingly strong (and therefore profitable) investment market.

Texas: a robust market and high livability.

According to the Local Market Monitor report, Texas was the state with the second greatest number of flourishing real estate investment cities: San Antonio at number three, Dallas at number six, and Austin at number seven. Thanks to the state's strong energy sector, real estate damage caused by the 2008 recession was relatively mild, and the local housing market remained one of the strongest in the country. Year over year job growth is strong in all three of these cities, and population growth rates are high and rising (9% in Austin, 6.2% in Dallas, and 6.1% in San Antonio).

Jonathon Smoke, Chief Economist at Realtor.com, confirmed that Austin and San Antonio are among the top housing markets and the top places to live in the U.S., and BiggerPockets included Houston on their list of the top ten investment opportunities. Livability is certainly a big factor to consider when investing in real estate; after all, if people aren't moving to the area where you're investing, what's the point? New residents are flocking to the Lone Star State as quickly as they can, securing Texas's ranking as a top real estate market.

The Carolinas: affordable investments and a growing market.

Several cities throughout North and South Carolina were included among the best real estate markets, including Charlotte, Charleston, and Columbia. The Charlotte-Gastonia-Concord metropolitan area has an average home price of $220,758, a 22% three-year home price growth forecast, 5.5% population growth, and 3.6% job growth. Realtor.com confirmed the investment prospects of this region, and also added Charleston and Colombia in South Carolina as both ideal places to invest in and to move to.

This combination of overall growth and affordable housing makes the Carolinas an important market to keep an eye on.

Michigan: low prices with high ROI.

Based on the findings from Local Market Monitor's analysis, the number one U.S. city for investing in real estate is Grand Rapids, Michigan. Surprised? According to Realtor.com, Grand Rapids is one of the most affordable cities in the nation in terms of living expenses and housing costs, making it an attractive and growing market. Additionally, the city's job growth is 14th in the nation. As a result, Grand Rapids flaunts an impressive 3.1% population growth rate. The three-year home price growth forecast is 22%, with a current average home cost of just $154,348.

Similarly, Detroit is slowly but surely climbing the ladder of investment potential, and currently has a solid 16.2% ROI for real estate investors. Housing is extremely cheap but expected to rise soon, making it an extremely hot market for savvy investors.

Final thoughts on smart investing.

There's a lot to take into consideration when it comes to investing your money in the housing market. The world of real estate can be unpredictable and risky even at the best of times, but with a bit of careful planning and foresight, anyone can reap the benefits of smart investing.

Are you surprised by any of these hot housing markets? Let us know in the comments below! Looking to make a move to one of these booming real estate regions?

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