Are you thinking about investing in real estate but don't know where to start? You're not alone! Investing in your own property can be a great way to build wealth and secure your financial future. But with so many different options available, it can be hard to know which market is right for you.
In this blog post, we'll take a look at the 15 best places to invest in real estate in 2023. We'll discuss why these markets are hot right now and what kind of return on investment you can expect there. So if you're ready to jump into the world of real estate investing, read on!
As a quick note, all of the statistics featured in this blog are as of June 1, 2022.
Best Places to Invest in Real Estate
The US housing market continues to be a hot seller's real estate, with annual price growth reaching record highs and inventory continuing to fall. Because it is currently only the preference of sellers rather than buyers (a condition known as "seller-side"), expect bid wars if you're looking for a new house in 2023! If an investor is considering placing their money into real estate it is important to crunch numbers and carefully consider different cities that will offer them high profits despite current circumstances.
Factors to Consider When Deciding Where to Invest
There are a number of factors that come into play when deciding on where to invest in real estate.
1. Location: The number one factor that determines whether or not a property is a good investment is its location. Look for areas with strong economic growth, low crime rates, and good schools. These areas tend to see the highest appreciation rates and offer the best ROI.
2. Property type: Another important factor to consider is the type of property you're interested in investing in. Single-family homes and condo units are typically the most popular choices, but there are also a number of other options to consider, such as multi-family dwellings, commercial properties, and vacation rental properties.
3. Price: Of course, you'll also need to take price into consideration when choosing an investment property. Look for properties that are priced below market value so you can get a good deal and maximize your return on investment.
4. Rental demand: If you're interested in investing in a rental property, it's important to consider the demand for rentals in the area you're thinking about investing in. Areas with high job growth and a young population tend to have the highest demand for rentals.
5. Economic growth: Another important factor to consider when deciding where to invest in real estate is the economic growth of the area you're considering. Look for areas with strong job growth, low unemployment rates, and a diversified economy. These areas are more likely to see increases in property values.
Now that we've gone over some of the factors to consider when choosing an investment property, let's take a look at the 15 best places to invest in real estate in 2023.
Atlanta is a beautiful city full of real estate potential, especially for investors. With a population growth of over 14 percent over the past decade, the city is clearly on the rise. This influx of new residences has resulted in a housing demand which has pushed prices up by nearly 10 percent in just the past year. The average rent for a one-bedroom apartment in Atlanta is currently $1,500, and the median home price is roughly $370K. With such affordable prices and a strong job market, it's no wonder that people are flocking to Atlanta!
What's driving Atlanta's growth? The city is attracting young professionals and families who are drawn to its strong job market, affordable cost of living, and vibrant culture.
Top Reasons to Invest in Real Estate in Atlanta
With nearly 500 people moving to Atlanta daily, the population is projected to grow by over 2 million people by 2030.
Over 60% of the current population are renters.
The city is considered one of the Top Rental Markets in the U.S.
1-year appreciation forecast of over 10%
Investing in Denver provides access to two rental markets - full-time residences as well as the potential for holiday renters due to the city's popularity as a destination for outdoor activities. With the varied rental potential, Denver is a great place to consider for real estate investment.
As the Mile High City continues to grow in popularity, so does the demand for housing. In fact, the average rent for a one-bedroom apartment in Denver has increased by nearly 25 percent in just the past year!
The city also boasts an extremely low unemployment rate - less than 3%, as well as a revitalized tourism industry. All of these factors make Denver an excellent place to invest in real estate!
Top Reasons to Invest in Real Estate in Denver
In the last decade, Denver's population has grown by over 25%.
The city welcomes over 13 million overnight visitors annually.
Denver is part of the top 10% of US cities for real estate appreciation.
Over 1/3 of residents are current renters.
Forbes Magazine called Denver the 6th “Best Places for Business and Careers.”
The city is home to 7 Fortune 500 companies.
Boise, Idaho is an excellent option for those wanting to invest in real estate for a number of reasons. Not only has the city experienced recent growth, but it also offers affordable real estate, a low crime rate, outstanding amenities, and high quality of life.
Recently, Boise was ranked as the #1 housing market by Realtor.com, considering factors such as yearly percentage growth in both home sales and prices.
The average home price in Boise is approximately $585K, while the average rent for a one-bedroom apartment is $950. With real estate trending up nearly 23% year-over-year, Bosie offers an excellent return on investment.
Top Reasons to Invest in Real Estate in Boise
Both job and population growth rates are triple the national average.
The city has a low unemployment rate (3.5%).
The 1-year appreciation forecast is 10%+.
Price-To-Rent Ratio: 19.29
One of the fastest-growing real estate markets in the country.
While not necessarily the most affordable city to invest in, Seattle, Washington is a great place to consider for real estate investment. The city is constantly growing, with the population increasing by nearly 20 percent over the past decade.
This population growth, combined with strong job prospects and high quality of life, has resulted in increased demand for housing. The average rent for a Seattle apartment is just over $2,100 which is an increase of 6% from 2021.
Thanks to some of the tech industry's top companies calling Seattle home, the job market is strong and continues to grow. Between Meta (Facebook) going on a hiring spree and Google expanding their Seattle campus, the job market is only going to get stronger.
Top Reasons to Invest in Real Estate in Seattle
Over half of Seattle households are renter-occupied.
Ranked fourth among growth among the 50 biggest U.S. cities by the U.S. Census.
Dynamic and expanding job market.
Higher than average wages.
Over 10 Fortune 500 companies are located in Seattle including Amazon, Microsoft, Starbucks, and Nordstrom.
One of the country's "greenest" cities.
Houston has been and continues to be, one of the best cities in the country to invest in real estate. With the Houston-Metro Region being home to over 7 million residents, the city itself features 53 Fortune 1000 companies as well as the U.S. oil and gas industry.
The real estate market in Houston is both competitive, and affordable for those looking to invest. Though average monthly rent could be considered low by some, approximately $1,600, what makes the city so attractive is its extremely active real estate market. Whether investors are looking to enter or exit the market, they will have no trouble doing so.
Top Reasons to Invest in Real Estate in Houston
Diverse economy with a strong job market.
Home to the third most Fortune 1000 companies in the country, falling only behind New York and Chicago.
Affordable real estate with the median price being under $400K.
The price-to-rent ratio is 14.9.
There are a number of reasons why Boston is a great city to invest in, however, for those looking to target the student rental market, the downtown area is the place to be. Boston is also becoming an increasingly popular tourist district, welcoming over 20 million visitors a year.
As far as the real estate market in Boston goes, the city remains extremely competitive and does require a fair amount of capital in order for investors to get their foot in the door. However, for those who are able to do so, returns can be extremely profitable. The average monthly rent for a one-bedroom apartment in Boston is $2,500 which is an increase of 14% from last year.
Top Reasons to Invest in Real Estate in Boston
66% of residents are in renter-households
The median rental price in Boston is among the highest in the nation.
A popular city for both student rents and overnight tourists.
Lower than the national average, the unemployment rate is on a downward trend.
Boston's population is expected to grow between 15-20% by 2030.
Las Vegas, Nevada
Though it has been hit hard by the pandemic, Las Vegas is still a great place to invest in real estate. The city has always been and continues to be, a tourist destination which means there is always a demand for both residential and commercial properties.
As the world opens back up and more and more people are traveling, Las Vegas continues to be one of the most visited cities in the country. For those looking for vacation rental opportunities, Las Vegas welcomed over 32 million visitors in 2021, which is not quite at the record 42.2 million seen pre-pandemic, a significant increase from 2020 when the city welcomed 19 million.
Top Reasons to Invest in Real Estate in Las Vegas
The tourism industry is expected to rebound quickly post-pandemic.
Rental prices are at an all-time high for the city, averaging $1,500 for a 1-bedroom apartment.
Steadily decreasing unemployment rate as the economy is in full bounce-back mode.
Steadily increasing population with an increase of nearly 2.5% from 2021.
Taking its place as the third-largest metropolitan area in the United States, Chicago, Illinois is another one of the country's best cities to invest in. Home to over 3 million residents in the city and another 10+ million in the surrounding metro area, Chicago is a bustling city with a lot to offer.
Job opportunities are plentiful in the Windy City with over 1.5 million people employed in the metro area. The diverse economy, that is not reliant on any one industry, provides stability and security for both residents and investors alike. The city is home to an impressive number of top-tier businesses including over 30 Fortune 500 companies.
Top Reasons to Invest in Real Estate in Chicago
Not only does Chicago have nearly 40% of its residents as renters, but the city also has some of the highest numbers of wealthy renters - those making over $150,000 annually.
Rental prices increased a whopping 15.6% in the last year.
The average Chicago apartment costs over $2,000/month to rent.
Chicago's downtown district has one of the highest population growth rates in the country.
The popular South Loop neighborhood saw an increase of over 45% in terms of the population over the last decade.
Projected annual visitors for 2023 to surpass 65 million.
Combining a fast-growing economy and strong housing market, Phoenix, Arizona is becoming an increasingly popular option for investors. The city boasts double-digits in both rent growth and price-to-rent ratios adding to its appeal to investors.
Phoenix provides an excellent alternative to other major cities such as Los Angeles and with its affordable real estate opportunities is a great location to break into the market. With one of the highest rates of appreciation in the country, Phoenix is quickly becoming a hot spot for real estate investors.
Top Reasons to Invest in Real Estate in Phoenix
The population of the great Phoenix area is projected to grow to nearly 4.9 million by 2029.
Prices are still relatively low when compared to other major metropolitan areas.
The job market is strong with an unemployment rate of only 2.9%.
5 Fortune 500 companies have their headquarters in Phoenix.
The price-to-rent ratio of over 20% and average rental prices increased by over 25% since last year.
The median rental price for a 1-bedroom apartment in the metro Phoenix area averages $1,220.
Palm Springs, Florida
Palm Springs is an attractive city for real estate investors for a number of reasons. The city has a strong job market with an unemployment rate of 4.9%. In addition, Palm Springs is home to a large number of retirees which creates a high demand for rental properties.
Palm Springs is a beautiful city in Florida that offers a great quality of life. The city is home to many retirees, which means that there is a strong demand for housing. In addition, the city has a strong economy and a low unemployment rate. As a result, Palm Springs is an ideal city to invest in real estate. The city offers a wide range of housing options, from condominiums to single-family homes. In addition, the prices of homes in Palm Springs are very reasonable.
Top Reasons to Invest in Real Estate in Palm Springs
Relatively affordable real estate with a higher cost of living generally translates to high-income renters.
A growing population of retirees creates a high demand for rentals.
The city has a strong job market with an unemployment rate of only 4.9%.
The average rent for an apartment in Palm Springs is approximately $1,700/month.
Salt Lake City, Utah
There are many reasons to invest in real estate in Salt Lake City, Utah. One key reason is the high occupancy rates for both residential and commercial properties. This indicates that there is high demand for housing and office space in the city, making it a good investment. Another reason is the upward-trending job growth in the city. This means that more people are moving to Salt Lake City for work, which increases the demand for housing. Finally, the state and local taxes in Utah are relatively low, which makes investing in real estate more profitable. Overall, Salt Lake City is a great city to invest in real estate.
Salt Lake City is located in a beautiful setting, surrounded by mountains and featuring numerous lakes and hiking trails. The city is also home to a number of historic and cultural sites, including the Mormon Temple and the Great Salt Lake.
Top Reasons to Invest in Real Estate in Salt Lake City
A low unemployment rate of 2.4%
The median monthly apartment rent is roughly $1,500
An upward-trending job market with low local and state taxes
Minimal mortgage delinquencies
A growth rate of over 1% from 2021
As the second-largest city in the state, one may not think Birmingham is the place to invest. However, due to its affordable housing options, high quality of life, and affordable cost of living, Birmingham is an excellent place to invest in real estate.
The median price for a home in Birmingham is $197,000, which is much lower than the national average. Despite the city's extremely affordable real estate options, home values have been steadily increasing, nearly 17% since 2021. This allows investors to purchase with minimal money upfront, however, can still be confident that the value of their investment will increase.
Top Reasons to Invest in Real Estate in Birmingham
Affordable real estate, nearly 50% lower than the national average
Average 1-bedroom apartment rose over 11% since last year
A strong economy, particularly in health care, manufacturing, and government services
Ranked #2 for lowest property taxes
Over half of residents are renters (53%)
Especially attractive to investors looking to break into the short-term rental market, Orlando is one of the world's most popular tourist destinations. Offering access to both long-term residents and holiday renters Orlando provides real estate investors with the perfect opportunity to generate income all year round.
In addition to its high occupancy rates, Orlando is also an excellent place to invest in real estate because of its growing population. The city's population has increased steadily over the years and is projected to add 1,500 people a week to the population for the next 11 years.
Top Reasons to Invest in Real Estate in Orlando
Real estate has appreciated over 43% in the last 10 years, with no signs of slowing down
Over half (60%) of residents are currently renting
Strong tourism industry with access to millions of potential visiting renters annually
Forbes.com has ranked Orlando as the second fastest-growing city in the country
The city has a strong economy with a low unemployment rate (2.9%)
Albuquerque, New Mexico
The most populated city in the state of New Mexico, Albuquerque is an excellent place to invest in real estate. The city has a lot to offer investors, including a growing economy, a low cost of living, and an abundance of affordable housing options.
Albuquerque's job market is growing rapidly, with the city adding over 43,000 new jobs in the last year. The city's unemployment rate is steadily decreasing, and the population is projected to grow by 3.2% over the next 8 years.
Top Reasons to Invest in Real Estate in Albuquerque
Affordable real estate at a median home price of just over $275K
Median monthly rent of roughly $1,400 which offers investors a 0.50% price-to-rent ratio
8-year projected population growth rate of 3.2%
Among the lowest property taxes rates in the country (0.78%)
The real estate market in Baltimore is strong and diverse, with steady population growth. The city's population has increased by 3% since 2010 and is projected to grow by another 1.7% over the next five years.
Though real estate in Baltimore is above the national average, there are plenty of options to be found which allow investors to generate a healthy return on their investment. The city's median home price is $315,000 and the average monthly rent is $1,600.
Top Reasons to Invest in Real Estate in Baltimore
Baltimore metropolitan area created 32,500 CES jobs in the past year
Steady population growth with projected increases over the next decade
Many opportunities for affordable real estate options
The average annual income for Baltimore residents is nearly $80K (national $55K)
Due to its close proximity to Cincinnati and Columbus, Dayton is a great location for investors looking to purchase real estate in the Midwest. The city's cost of living is low and there are plenty of affordable housing options available.
Thanks to Dayton's extreme affordability there is plenty of opportunity for significant cash flow for real estate investors. With the potential to find rental properties under $200,000, investors can actually have a price-to-rent ratio of roughly 95%, which is 66% less than that of the national average.
Top Reasons to Invest in Real Estate in Dayton
Affordable real estate (median cost of real estate under $200K)
Projected 9-year growth of nearly 1%
The price-to-rent ratio can be as high as 0.95%
The median monthly rent is approximately $1,200
Though lower than the national average, Dayton's job growth rate is steadily increasing
If you're looking to invest in real estate, these are some of the top cities in the country to do so in 2023. Each with a unique market, real estate investors can find opportunities to generate healthy returns in each of these metropolitan areas. Boasting strong economies, affordable real estate, projected job, and population growth rates, and much more, these cities are primed for real estate success in the coming years.