Are you considering making a residential real estate investment? In 2022, that could be difficult. It can, however, be financially rewarding.
The key is to keep things in perspective. Don’t expect to buy a house one day and then sell it for a profit in two months. Instead, you’ll have to hang on to your money. Homeowners who have been in their homes for five years or longer have seen their property values rise in the past.
But which cities are the best for real estate investment? This is dependent on a variety of things. Just keep in mind that, like any other investment, there’s no assurance that your investment home will rise in value after you acquire it. The majority of houses for sale in tulum mexico do, however, this isn’t always the case.
What Is The Definition Of An Investment Property?
An investment property is real estate that you buy with the intention of making money. You buy an investment property, whether it’s a single-family home, a condominium building, or an apartment building, because you want to make a profit (ROI).
You can either rent out the property and collect rent from your tenants, or you can sell the property once its value has increased. You can invest as a single person or as part of a group.
When looking for an investment property, there are various variables to consider. What plans do you have for the property’s upkeep? What will you have to charge to break even? How long do you plan to keep the property before selling it?
You should also think about the costs of real estate investing. These expenses include the property’s purchase price, as well as mortgage interest, taxes, and homeowners insurance.
What Is the Best Way to Locate Real Estate Investment Opportunities?
Investment properties can be found in small villages and large cities alike. You might believe that investment properties can only be found in rich areas. However, you can also find investment houses in up-and-coming areas. If you buy before the neighborhood becomes popular, you may be able to get a great deal on a home that will sell for much more when you’re ready to sell.
You could even be able to discover an investment property in an area designated as an opportunity zone. When investors put their money into opportunity zones – places designated as low-income – they get tax advantages, which help bring new investment to communities that are often in desperate need.
But how do you go about finding the perfect investment properties to help you achieve your objectives?
You can accomplish this in a variety of ways, including:
- Working with a REALTOR® or a real estate agent to help you find properties that match your budget and other requirements.
- Speaking with a local wholesaler, who markets to potential sellers directly and negotiates the right to buy each seller’s property.
- A multiple listing service (MLS) is an online home-selling database that real estate brokers and agents use to list and find local houses for sale.
- Finally, Rocket Homes® can assist you in locating investment homes for sale in the area where you want to make your next real estate investment.
Top 10 Best Places To Buy Investment Property In 2022 | Where To Invest In Real Estate
There is no one-size-fits-all real estate market for every investor. Much of what makes a city ideal for your investment funds is determined by your long-term objectives.
Do you want to receive rent payments on a monthly basis? Then a well-known tourist site may be the greatest option for you. Is it more important to you to see your investment property appreciate in value over time? A major city with a growing population and rising property values may be a better option. Do you have a budget constraint? You can go for a community that you believe will gain in popularity in the near future but currently has more affordable properties.
When reviewing rental returns and deciding where to invest, it’s necessary to consider a few other key aspects in addition to the property’s location. You should know the location’s rent as a percentage of income, vacancy rate, housing prices, industry, population, and growth rate, for example.
We used data from the U.S. Census Bureau, RedFin’s Data Center, and Zillow Research to compile our list of the top cities for real estate investment. These sites’ key indications aided us in compiling our top ten ranking.
We’ve compiled a list of 10 of the greatest cities in which to buy an investment property in 2022 to assist you in your quest.
Houston, Texas is number one.
The Houston area has a lot going for it, including space exploration, the requirement for a lot of air conditioning, international energy and petroleum exploration, and being home to more than 2.3 million people. Houston is well-known for its affordable housing, in addition to its economic capabilities. In March 2022, the typical sales price of an existing home in Houston was $324,881, up 11.2 percent from the previous year.
Houston’s house prices, along with the city’s thriving economic scene, make it a natural choice for real estate investors. It’s also a lucrative rental industry. In 2021, single-family house rentals climbed by 7.1 percent, with the average monthly rent rising by 8.5 percent to $2,042. The average monthly rent in townhomes and condominiums grew 5.1 percent to $1,737, which is fantastic news for real estate investors.
Charlotte, North Carolina is number two.
Charlotte, nicknamed the “Queen City,” is one of the top cities in the United States for businesses and vocations, with a population of more than 874,000 people according to the 2020 census. Charlotte is home to over ten Fortune 1000 corporations, including Bank of America, Lowe’s, and Wachovia Corp., as well as various colleges, cultural institutes, and health care facilities.
In March 2022, the median sales price of an existing home in Charlotte was $350,019 dollars. That’s an increase of 18.8% and $55,451 over the same month a year ago. As a result, Charlotte is one of the hottest real estate markets in the country. According to Zumper, the average rent for a one-bedroom apartment in Charlotte in late April was $1,433, up 19 percent from last year’s figures.
Orlando, Florida is number three.
The sunny landscapes of Orlando imply that real estate investors in the larger metropolitan region have lots of options. This city may be the most popular tourist destination in the United States. However, the Orlando area has a full-time population of more than 2.03 million people, up 1.8 percent from the previous year. In 2025, the city is predicted to surpass 2.9 million residents.
Orlando is also noted for its job growth, especially in the tourism, leisure, and hospitality sectors. The lack of a state income tax in Florida, combined with the warm weather, attracts millions of people and businesses from other cities where taxes are higher and the cost of living is higher.
In March 2022, the typical sales price of an existing home in Orlando was $296,193, up 10% from the same month in 2021.
According to Zumper, the average rent for a one-bedroom apartment in Orlando was $1,679 in late April, up 35% from the same time last year.
Portland, Maine is number four.
Maine conjures us images of craggy coastlines, lighthouses, and lobster. However, you should consider investing in real estate as well. In the small but charming town of Portland, Maine, real estate investment may make sense.
Portland, Maine, has a population of about 66,000 people and is home to unique cuisine, a thriving farm business, and seas of marine heritage. It’s also a popular landing spot for property purchasers and potential home buyers searching for a larger secondary city. This indicates that this city is also a strong source of rental revenue on a monthly basis.
Home prices in Portland, Maine, jumped 19.9% year over year in March 2022, with homes selling for a median price of $523,000 in March 2022. In March, residences in Portland sold in an average of 6 days, a significant decrease from the 41 days it took to sell in March of last year. According to RentCafe data, the average rent for an apartment in Portland was $1,607 in March 2022.
Atlanta, Georgia is number five.
Atlanta is one of the fastest-growing cities in the United States, with a population approaching half a million as of the 2020 census. This Georgia city is famed for its rich history, creative brains (it’s one of only two places in the world with two Nobel Peace Prize recipients), and numerous tourist attractions.
Atlanta’s population expansion, as well as the high demand for properties in this market, make it a good choice for investors, whether they’re looking for monthly rent or want to keep onto a property as its value rises.
In March, the median sold price for an Atlanta property was $374,249, up 13.6 percent from the previous month. What is the level of housing demand in this area? In March 2022, 504 of the 1,146 properties sold went for more than the asking amount. As of mid-April this year, the average monthly rent for a one-bedroom apartment in Atlanta was $1,700, according to Zumper. That’s a 16 percent increase from a year ago.
Phoenix, Arizona is number six on the list.
The aptly titled “Valley of the Sun,” better known as Phoenix, Arizona, has a population of over 1.6 million people and offers year-round warmth, breathtaking landscapes, historical sights, plenty of entertainment and nightlife, and a rising number of business opportunities. Phoenix’s home values and apartment rents have been steadily rising as more individuals desire to relocate to this warm-weather metropolis.
The figures paint a picture of a sweltering Phoenix housing market: The median sales price of a Phoenix home in March was $400,005, up 25% over the same month the previous year. Buyers are snapping up these properties rapidly, with 2,300 sold in March, an increase of 18.7%. In March, 59 percent of properties sold for more than the asking price, indicating that buyers are willing to spend more than the asking price.
Salt Lake City, Utah is number seven.
Salt Lake City’s rich religious culture, historical sites, and natural landmarks – particularly the city’s notably salty lake and surrounding mountains – must not be overlooked. They attract visitors as well as new residents to this part of the country. Utah’s upward-trending job growth, low unemployment rate, and low state and local taxes are just a few of the benefits of investing in the Salt Lake City real estate market.
Because rental homes are in high demand in Salt Lake City, tenants may be more likely to stay in your rental property for the long term.
According to a RE/MAX survey, Salt Lake City was among the top five of 51 metropolitan regions in the United States in terms of sales price growth in February. Salt Lake City homes sold for a median price of $516,759 in February, according to the company’s national housing survey. This represents a 26 percent increase above the median price of $410,000 in February 2021.
Minneapolis-St. Paul, Minnesota is ranked number eight.
If you’re familiar with the Midwest, you already know that the region is littered with reasonably priced single-family rental homes and small multifamily complexes, making it a good place to invest in real estate. Minneapolis and St. Paul, for example, are a wonderful example of what Midwest markets have to offer investors.
The Twin Cities area not only has a lot of affordable housing alternatives, but it also has a lot of culture, a thriving food scene, professional sports, and Fortune 500 companies.
With over 3 million residents in the cities and suburbs, the Twin Cities area is one of the most densely inhabited metro areas in the Midwest, as well as one of the most cheap. This translates to lower overall real estate acquisition and maintenance expenditures for you. High employment rates, jobs in a range of industries, outstanding colleges and schools, and a need for rental accommodation are all available in the area.
In March, the median sales price of homes sold in Minneapolis was $318,165, up 4% over the previous month. In St. Paul, that figure was $265,609, up 10% from the previous year. According to Zumper, the average monthly rent for a one-bedroom apartment in St. Paul was $1,110 in April, up 6% from the previous year. In Minneapolis, the amount was $1,175, down 3% from a year ago.
Indianapolis, Indiana is number nine.
While the historic Indianapolis 500, the world’s greatest single-day athletic event, is the city’s most well-known attraction, Indianapolis has much more to offer. For those with small children, there are major-league sports franchises, highly regarded museums, universities, stores, restaurants, and family-friendly activities.
Because of its inexpensive property prices relative to many other locations of the country, such as the east and west coasts, the Indianapolis housing market attracts many out-of-state investors. Because of the lower prices, investors aren’t as concerned about their properties appreciating as much as they are in higher-cost cities.
In March of this year, the median sales price of homes in Indianapolis was $216,964, up 17.3 percent over the same month a year ago. In February, the average monthly apartment rent in Indianapolis was $1,055.
Birmingham, Alabama is ranked number ten.
When you think of buying real estate in the deep South, the second-largest city in Alabama might not come to mind. Birmingham’s affordable housing and low cost of living, on the other hand, might make real estate investment more affordable. And housing costs are rising in this area.
The median sales price of homes in Birmingham in March 2022 was $197,000. That is a reasonable price. At the same time, property prices have been climbing in the area, with March’s figure up 16.3 percent from the same month a year ago. This implies that investors don’t have to put up as much money up front when buying real estate in this area, but they can still anticipate their investments to appreciate in value. Remember, as with any market, nothing is guaranteed.
Birmingham offers a strong job market for young professionals and families, particularly in health care, manufacturing, and government jobs. Birmingham, which has a population of more than 330,000 people, according to the U.S. Census Bureau’s 2020 estimates, has more to offer property owners than meets the eye.