How to find investment properties in 2026

Real estate has long been one of the most reliable paths to building long-term wealth, but like any investment, it comes with tradeoffs.

Some prefer a hands-on, active approach to investment properties: buying distressed homes, renovating them, and selling for a profit. Others prefer passive income, collecting rent checks every month and allowing a property to appreciate over time.

Both approaches can work, but they require different levels of time, capital, and risk tolerance. And regardless of strategy, one factor matters most: finding the right property. That often means mixing data-driven research and local knowledge to find the best places to invest in real estate. You don’t want to buy a money pit that drains your savings; you want an asset that appreciates.

Key takeaways:

• Investment properties fall into two main strategies: active income (house flipping) and passive income (rental properties).
• The best places to invest in real estate aren’t found in one place. MLS listings, FSBO homes, online auctions, and off-market leads are just some places to look for deals on investment properties.
• Location, local market knowledge, and return on investment are key factors to consider when deciding if a property is a worthwhile investment.

Why buy an investment property?

There are real, tangible reasons experienced investors keep coming back to real estate:

• Passive income: Rental properties can generate consistent monthly cash flow.
• Tax advantages: Investors may qualify for deductions like depreciation, mortgage interest, property taxes, and maintenance costs.
• Equity growth: Property values may increase over time, building wealth.
• Portfolio diversification: Real estate can balance out stock market volatility.
• Long-term financial security: Properties can support retirement income, be passed down to future generations, or even hedge against inflation.

That said, your strategy also matters. House flippers put in hard work upfront – sourcing, renovating, selling – in exchange for a faster, bigger payout. Rental property investors play a longer game, prioritizing areas with strong rental demand and an appreciating market.

3 ways to find investment properties

1. Work with a real estate agent

A licensed real estate agent or REALTOR^® gives you access to the Multiple Listing Service (MLS), which is a real-time database of properties for sale that isn't immediately available to the public. An agent also brings market knowledge and their professional network to draw on and can alert investors to homes not yet publicly for sale.

One thing to keep in mind: have a mortgage preapproval letter or proof of funds ready before you start looking for investment properties. That way you’re ready to act fast, especially in a competitive market.

2. Seek out FSBO properties

For Sale By Owner (FSBO) listings are homes sold directly by the owner without the help of a listing agent, and can be a great way to score a below-market deal. Many FSBO sellers are looking for a fast, all-cash purchase, and without agent commissions in the mix, there's often more room to negotiate on price.

If you spot a For Sale By Owner sign, don’t wait to reach out. Schedule a tour, ask about needed repairs, and try to understand why they're selling. FSBO listings also show up on Craigslist and dedicated FSBO sites, so it's worth checking those regularly.

3. Browse online auctions

Online home auctions are one of the better ways to find foreclosures and real estate owned (REO) properties across the country. A foreclosure is a home the lender has taken if the owner defaulted on their mortgage. If that property doesn’t sell at a foreclosure auction, it becomes an REO property, meaning the bank or lender now owns it.

These sales are often a way to find homes at a discount – but they usually require you to have the full purchase price in cash upfront. If you don't want your capital tied up long-term, some buyers use delayed financing after the purchase to recoup the cash after closing.

How to find off-market investment properties

Searching the MLS or home sale sites like Redfin is a standard starting point, but many of the best homes never officially hit the market. They instead might come via word-of-mouth, good networking, or being the first to express interest in a home. Finding these off-market properties can take more effort, but because there is less competition, they can come with a better bottom line.

Explore neighborhoods

Drive through your target areas and look for signs of vacancy, neglect, or “coming soon” notices. These can signal an owner who is preparing to move or willing to sell but hasn't committed to a formal listing.

Don't be shy about knocking on a door or sending a letter. Some investors even put up fliers in their preferred neighborhoods, letting owners know they're actively buying. In a tight market where competition is high, being the first person to express interest can give you a big leg up on other investors.

Spread the word

Another tactic for finding off-market investment properties is word-of-mouth. Let your friends, family, and co-workers know you’re looking and what you’re looking for. Who knows – a neighbor or relative might be thinking about selling but haven’t reached out to an agent yet.

Check out preforeclosures and foreclosures online

Preforeclosures happen when a homeowner has fallen behind on payments but hasn't yet lost the home. Foreclosures are properties that have already been claimed by the lender.

If you’re patient, both can be opportunities for investors willing to handle some extra paperwork. Preforeclosure listings can often be tracked at the county level, giving you the chance to connect with motivated sellers before the bank takes full control.

Pursue short sale opportunities

Another source of leads for off-market properties can come from a short sale. A short sale is when a homeowner sells their property for less than the amount owed on the mortgage, with the lender's approval.

This can be a win-win: The seller avoids a foreclosure on their credit, and the investor gets a property at a discount. Just keep in mind most short sales are sold “as-is” and have little room for negotiation, so factor repair costs and deferred maintenance into your budget.

Factors to consider in your investment property search

Not every listing will be a good investment. Some properties need more work than they’re worth, have weak rental demand, or sit in areas with limited long-term growth. That’s why learning how to evaluate and source opportunities is essential, especially if you’re targeting great places to invest in real estate.

Location

Choosing a high-demand area is one of the fastest ways to achieve a positive return. According to recent Redfin data, the West Coast investor market is growing, while Florida has fallen back.

• Seattle: Investor purchases jumped a staggering 37% year-over-year in late 2025, the biggest gain in the country.
• Portland, OR (+27%), San Francisco (+24%): These West Coast hot spots are seeing renewed interest as investors bet on rental demand in high-cost cities where would-be homebuyers are priced out of the market.
• Midwest markets: If you’re looking for properties under $300,000, the Midwest remains affordable. Cities like Detroit (median home price $180,950) and Cleveland ($227,000) offer some of the most accessible entry points for new investors.

Property taxes

Always research local tax rates, especially for properties that won’t be your primary residence. High property taxes can eat into your monthly cash flow and your overall  return on investment and could even affect future resale value. In some up-and-coming spots, a sudden jump in property value can lead to a significant tax hike, so plan ahead when possible.

Repairs

Do you have the skills to handle renovations yourself, or will you need to hire contractors? Many investors are wary of the rising cost of building materials and labor shortages. If you are flipping homes or have ongoing rental maintenance, these costs are the difference between a profit and a loss.

Profit metrics

Before you buy, do the math. Calculate your potential return on investment (ROI) by looking at comparable sales, local rental rates, and inventory trends. Rising interest rates and home prices are giving some investors a pause – in Q4 2025, 9.2% of homes sold by investors were sold at a loss, up from the previous year. But with mounting home prices comes record gains; those who profited did so at a median gain of $185,918.

The bottom line: Focus on finding the right property, not just a deal

Finding the right investment property can take time, but it’s important to be ready to move quickly when the right home appears.

While the 2026 housing market has its challenges – like high insurance costs in Florida or steep entry prices in Seattle – it also brings opportunities in stable Midwest metros and high-demand West Coast cities. By working with a knowledgeable real estate agent, keeping an eye on off-market deals, and staying current on local data and trends, you can more confidently enter the world of real estate investing.

Ready to finance your next investment property?

Whether you're buying your first rental or adding to your portfolio, securing financing early puts you in a stronger negotiating position. Rocket Mortgage offers loan options built for investment properties, and quick pre-approval can be the difference between winning or losing your next offer.

This article is for informational purposes only and is not intended to provide financial, investment, or tax advice. You should consult a qualified financial or tax professional before making decisions regarding your retirement funds or mortgage.

Refinancing may increase finance charges over the life of the loan.

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