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Most Promising + Best Places To Invest In Real Estate In The US

Victoria Araj7-minute read

November 21, 2022

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When considering real estate investing, there are several determinants to find the ideal location. Not only is the property itself important, but where it’s located has a major impact on potential renters and investment revenue.

To find the most promising and best places to invest in real estate in 2023, we gathered data from the house price index per state in Q2 2022,1 median property tax,2 rental vacancy rate,2 home appreciation,3 debt-to-income (DTI) ratio,4 consumer price index (CPI),5 cost of living3 and rent-to-income ratio2 in the 100 largest U.S. cities.

To learn more about how we ranked the best cities to invest in for 2023, jump to the methodology section.

Discover which cities are the most promising to invest in real estate, plus advice on real estate investments.  

Key Findings:

  • Fort Wayne, Indiana, is the most promising city to invest in real estate.
  • 40% of the top places to invest are located in Ohio.
  • Cities in Missouri have the best home appreciation rate at 94%.

Table Of Contents

Best Cities To Invest In Real Estate

Real Estate Investing FAQ

Methodology

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1. Fort Wayne, Indiana

Fort Wayne Stats: Home price index: 437.04; Home appreciation: 14.62%; Median property tax: $1,153

  • DTI: 1.14
  • CPI: 276.525
  • Rent-to-income ratio: 18.12%

First on the list is Fort Wayne, Indiana. As the second largest city in Indiana, there’s plenty of room for growth and real estate investments. Fort Wayne’s local population grew by 0.67% in the last year, making it the fastest-growing city in Indiana.6 Some of Fort Wayne’s most notable neighborhoods include Royville, Brierwood Hills and Westlawn.

Fort Wayne’s median listing price sits at $199,947, roughly 102% less than the median house price in the United States at $617,890.

Fort Wayne has also seen a 7.6% decrease in home prices since July, making it a timely opportunity for those looking to invest.

2. Toledo, Ohio

Toledo Ohio Stats: Home price index: 420.23; Home appreciation: 13.53%; Median property tax: $1,638

  • DTI: 1.02
  • CPI: 276.525
  • Rent-to-income ratio: 14.29%

Known as the Glass City due to its long history of glass manufacturing, Toledo is an ideal city for those looking to invest in affordable rental properties. Toledo was recently ranked No. 2 for best cities to buy a home in a buyer’s market, just behind Cleveland.7

It also ranked as one the top 10 cities with the lowest cost of living in the United States.8 Popular neighborhoods in Toledo include Southwyck, Westgate and DeVeaux.

The current median sold price in Toledo is $115,462, with the majority of homes selling between 30 and 90 days of being on the market. Plus, with a home appreciation of 13.53%, you’ll likely see your investments grow significantly over a several-year period.

3. Indianapolis, Indiana

Indianapolis Stats: Home price index: 437.04; Home appreciation: 14.62%; Median property tax: $1,470

  • DTI: 1.14
  • CPI: 276.525
  • Rent-to-income ratio: 21.51%

If you’re looking for a blooming city to invest in, look no further. Indianapolis, Indiana, has seen a 1.51% population growth just in the last year, close to doubling the U.S. national average of 0.9%.9 It’s seeing growth in the younger demographic especially, with 38% of its residents under the age of 25.10 Indianapolis is also seeing a jump in job opportunities, and it was just ranked in the top three best cities for startup businesses.11

Some of the best neighborhoods for young professionals include Broad Ripple, Fountain Square and Meridian-Kessler. The current median sold price in Indianapolis is $229,997, with 38.8% of homes being sold below asking price. This is great news for those looking to get a sweet deal on a potential rental property.

4. Cleveland, Ohio

Cleveland Stats: Home price index: 420.23; Home appreciation: 13.53%; Median property tax $1,485

  • DTI: 1.02
  • CPI: 276.525
  • Rent-to-income ratio: 27.7%

Cleveland, Ohio, made the top 10 largely due to affordability – a great benefit for those looking to invest in rental properties in the city. Cleveland was recently ranked No. 1 as the best place to buy a house in a buyer’s market.7 Known as the Forest City, Cleveland reels in potential buyers who love city life but enjoy seeing more green than brick.

Popular neighborhoods in Cleveland are Ohio City, Tremont and University Circle. The median sold price in Cleveland is $119,920, with 49.4% of homes being sold below asking price.

5. Wichita, Kansas

Wichita Stats: Home price index: 401.17; Home appreciation: 12.97%; Median property tax: $1,722

  • DTI: 1.14
  • CPI: 276.525
  • Rent-to-income ratio: 18.43 

Looking for a Midwestern city to invest in? Look no further than Wichita, Kansas. The city has continued to see steady population growth over the last several years, with a 0.75% increase just in the last year. If you’re worried about an upcoming recession, Wichita was ranked No. 2 in the most recession-proof cities in the U.S. due to its steady job growth and affordable real estate market.12

Wichita has a home appreciation rate of 12.97%. Top-rated neighborhoods in Wichita include Crown Heights, Indian Hills Riverbend and College Hill.

6. Detroit, Michigan

Detroit Stats: Home price index: 475.05; Home appreciation: 15.42%; Median property tax: $1,371

  • DTI: 1.14
  • CPI: 276.525
  • Rent-to-income ratio: 31.39 

Home to Rocket Companies, Detroit, Michigan, has plenty of opportunities for real estate investing. In the last 5 years, home values in Detroit have increased by over 122%.13  Detroit is currently ranked in the top five places to live in Michigan. Some of the best neighborhoods in Detroit for renters include Bagley, Corktown and East English Village.

Homes in Detroit are selling under 30 days of being on the market. Although homes are selling quickly, Detroit is seeing a home appreciation rate of 15.42% – so you’ll want to act quickly if you see an investment property you love.

7. St. Louis, Missouri

St. Louis Stats: Home price index: 474.1; Home appreciation: 14.97%; Median property tax: $1,543

  • DTI: 1.25
  • CPI: 276.525
  • Rent-to-income ratio: 22.02

Home to the famous Gateway Arch, more than half of households in St. Louis, Missouri, are renter-occupied – making it a promising place for those who are looking to buy in on rental properties.14 Some favorite neighborhoods for potential renters include Central West End, Soulard and DeBaliviere Place.

The median sold price for homes is currently $203,000. Sold prices have increased 6.6% since last year, with homes typically selling under 30 days of being on the market. In August 2022, 42.9% of homes sold above asking price.

9. Cincinnati, Ohio

Image of Roebling Bridge over Ohio River linking Cincinnati to Covington, KY next to infographic of Cincinnati Stats: Home price index: 420.23; Home appreciation: 13.53%; Median property tax: $2,508

  • DTI: 1.14
  • CPI: 276.525
  • Rent-to-income ratio: 21.38

Ohio continues to be a popular place to invest in real estate, with Cincinnati coming in at No. 9. Cincinnati was recently ranked as the No. 1 best place to live in Ohio.16 Some of the best neighborhoods in Cincinnati include Hyde Park, West Price Hill, East Price Hill and Oakley.

The median sold price for homes is currently $252,333, with a high home appreciation rate of 13.53%. Sold prices have decreased 4.8% since August 2022, with homes typically selling under 30 days of being on the market. 

10. Columbus, Ohio

View of Columbus Ohio skyline at sunset from water featuring bridge and green space in foreground. Columbus Stats: Home price index: 420.23; Home appreciation: 13.53%; Median property tax: $2,773

  • DTI: 1.14
  • CPI: 276.525
  • Rent-to-income ratio: 21.62

As the capital of Ohio, Columbus is known as a great place to live for job opportunities and career growth. It was even ranked in the top 15 cities to launch your career.17 Columbus is home to several large universities, making it a hub for student housing rentals. These neighborhoods include the University District, Victorian Village and Short North.

The median sold price for homes is currently $246,417, with a high home appreciation rate of 13.53%. As of September 2022, homes in Columbus are being sold for 12% more than they were in 2021.

Best Cities For Real Estate Investment

Below are the top 25 best cities to invest in real estate in 2023.

Rank

City

Q2 2022 All-Transactions House Price Index

Home Appreciation (%)

Median Property Taxes Paid ($)

Rental Vacancy Rate (%)

DTI

CPI

1

Fort Wayne, Indiana

437.04

14.62

1,153

6.5

1.14

276.525

2

Toledo, Ohio

420.23

13.53

1,638

6.5

1.02

276.525

3

Indianapolis, Indiana

437.04

14.62

1,470

6.5

1.14

276.525

4

Cleveland, Ohio

420.23

13.53

1,485

6.5

1.02

276.525

5

Wichita, Kansas

401.17

12.97

1,722

6.5

1.14

276.525

6

Detroit, Michigan

475.05

15.42

1,371

6.5

1.14

276.525

7

St. Louis, Missouri

474.1

14.94

1,543

6.5

1.25

276.525

8

Kansas City, Missouri

474.1

14.94

2,072

6.5

1.14

276.525

9

Cincinnati, Ohio

420.23

13.53

2,508

6.5

1.14

276.525

10

Columbus, Ohio

420.23

13.53

2,773

6.5

1.14

276.525

11

Lincoln, Nebraska

462.53

14.52

3,226

6.5

1.14

276.525

12

Omaha, Nebraska

462.53

14.52

3,186

6.5

1.25

276.525

13

Milwaukee, Wisconsin

499.54

13.53

3,206

6.5

1.02

 

 

276.525

14

Chicago, Illinois

499.54

12.54

4,181

6.5

1.14

 

276.525

15

Madison, Wisconsin

499.54

13.53

5,426

6.5

1.02

 

276.525

16

St. Paul, Minnesota

546.85

12.80

2,855

6.5

1.25

 

276.525

17

Minneapolis, Minnesota

546.85

12.80

3,439

6.5

1.25

 

276.525

18

Tulsa, Oklahoma

341.33

16.59

1,676

6.9

1.25

 

287.608

19

Oklahoma City, Oklahoma

341.33

16.59

1,807

6.9

1.25

 

287.608

20

Louisville, Kentucky

479.78

13.83

1,484

6.9

1.02

 

287.608

21

Winston-Salem, North Carolina

592.23

21.13

1,624

6.9

1.35

287.608

22

Memphis, Tennessee

603.52

24.10

1,685

6.9

1.02

 

287.608

23

Lexington-Fayette, Kentucky

479.78

13.83

1,908

6.9

1.02

 

287.608

24

Durham, North Carolina

592.23

21.13

2,684

6.9

0.51

287.608

25

Greensboro, North Carolina

592.23

21.13

1,953

6.9

1.25

287.608

Real Estate Investing FAQ

Below are some frequently asked questions about real estate investing.

What Are Some Tips For Real Estate Investing?

After you’ve found the ideal place for your real estate investing needs, here are some tips on how to better understand the real estate market as a new investor. 

  1. Learn the real estate market

Once you’ve chosen your location, whether it be a large city or a small town, connect with local real estate investors and agents to learn more about the local market. You can learn a lot from those who have been investing in real estate in your area and the expectations of cash flow and revenue.

  1. Understand homeowners insurance

As a homeowner, you’ll need to insure your purchased home. However, when buying a potential rental property, you’ll also need rental property insurance – also known as landlord insurance.

  1. Make a plan

Once you’ve done your research on the local market, always make a plan for the next steps. Be mindful of market conditions and seasonality. Ask yourself questions like, “What are popular months for renters to renew leases?” and “What are the median rental rates in the local area?”

What Makes A Real Estate Market Attractive For Real Estate Investors?

A real estate market can be deemed “attractive” to real estate investors if they see these three things:

  • Appreciation
  • Cash flow
  • A balance between appreciation and cash flow

If you’re seeing a high home appreciation rate plus a cash-on-cash return on rental properties, these are great signs the city you’re looking at has promise in investing opportunities.

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Methodology

To find the most promising cities to invest in real estate in 2023, we gathered data from the house price index per state in Q2 2022, median property tax, rental vacancy rate, home appreciation, debt-to-income ratio, consumer price index, cost of living and rent-to-income ratio in the 100 largest U.S. cities.

Here are the factors we considered when weighing our rankings:

  • FRED’s House Price Index per state in Q2 2022 – 20%
  • Census' median property tax – 15%
  • Census' rental vacancy rate – 15%
  • Statista's home appreciation – 15%
  • The Federal Reserve's DTI – 10%
  • BLS' CPI – 10%
  • Best Places' cost of living – 10%
  • Census' rent-to-income ratio – 5%

Source List

1FRED

2U.S. Census

3Best Places

4Federal Reserve

5BLS

6Greater Fort Wayne Inc.

7Money Crashers

8Niche

9World Population Review

10Bellhop

11Inside Indiana Business

12Livability

13Roofstock

14RentCafe

15Icelandair

16WLWT5

17LinkedIn

Victoria Araj

Victoria Araj is a Section Editor for Rocket Mortgage and held roles in mortgage banking, public relations and more in her 15+ years with the company. She holds a bachelor’s degree in journalism with an emphasis in political science from Michigan State University, and a master’s degree in public administration from the University of Michigan.