Most Promising And Best Places To Invest In Real Estate In The U.S.

If key U.S. housing market data is a strong indicator, anyone looking for the best places to invest in American real estate should look south. A 2023 Rocket HomesSM survey found that 9 of the 10 best places to invest in real estate are in the Southeast states or Texas.

There are many determinants we can use in finding the 10 cities that are best for real estate investment. Not only is the property itself important, but where it’s located has a major impact on potential renters and investment revenue.

Metrics Used To Determine The Best Places To Buy Rental Property

The U.S. housing market is dynamic. Home prices and rents fluctuate quite a bit from market to market and year to year. Rocket Homes collected and analyzed recent key housing market indicators in cities across the U.S., including gross rental yield, housing price index data, vacancy rates, unemployment rates, population growth and percentage of renters to give us insight into the best places to invest in real estate.

• Population: A city with a growing population is likely one with a diverse, job-friendly economy, affordable cost of living, low unemployment and, perhaps most importantly for real estate investors, a higher demand for housing.
• Gross rental yield: In real estate, gross yield is expressed as the percentage of the cost of the property that is returned in rent every year (before expenses). It’s calculated by dividing the gross annual rent by the current market value. A gross rental yield of 7% or higher is considered ideal.
• Vacancy rate: A city’s vacancy rate is expressed as the percentage of its rentable housing units that are not occupied. A 5% to 10% vacancy rate is considered healthy because it means there are enough properties available to meet demand but not so many that there is an oversupply.
• Housing price index 5-year growth: S. National Home Price Index captures trends in the national housing market by using data from the Federal Housing Finance Agency (FHFA). The index measures changes in housing market prices given a constant level of quality. A higher percentage indicates a robust return on recent real estate investment.
• Median home sold price: The median home sold price in a given real estate market indicates the price where half of the listed homes are higher and half are lower. Real estate experts consider it a better indicator than average price because it identifies the typical home and is less affected by outliers.

The 10 Best Places To Be A Real Estate Investor In 2024

While there are many cities and towns where buying investment property can realize an excellent return on investment (ROI), here are 10 that offer the most promise in 2023.

1. Athens, Georgia

A good sign for real estate investors looking at Athens is that home values are rising while the average home sold price is still well below the U.S. average of $430,300. As of September 2023, the median home sold price in Athens, Georgia, was $328,265, up 9.3% from the previous year. Despite this past year being one of the toughest real estate environments in the last decade, home sales climbed 7.6% in Athens from August 2023 to September 2023, and 30% of sales were for over asking.

As home to the University of Georgia, Athens is known for its lively cultural and nightlife scene and a laid-back southern vibe. The large student population raises demand for affordable housing around the central campus, and thus the majority of Athens residents are renters. Top neighborhoods in Athens include Cobbham, Five Points and Normaltown.

• Population: 128,561
• Gross rental yield: 40%
• Vacancy rate: 48%
• Housing price index 5-year growth: 9
• Median home sold price: $328,265

2. Savannah, Georgia

Savannah’s economy is diverse and strong. Nearby beaches, a vibrant bar and dining scene and rich history dating to Colonial times drives a tourism economy that generates $4.4 billion a year in revenue. The deepwater Port of Savannah is the fourth largest in the United States.

The Historic District,