When searching Google for the "best rental markets in the US," there are ample results. In fact, we know from personal experience. We pulled all the real estate markets mentioned by the top ten articles on Google and got an impressive 75 rental markets to pick from. Every source has a different methodology and varying opinions on the best cities to invest in real estate this year.
One source based their list on economic growth, vacancy rates, and future real estate development. Another source cited the population growth and average rent is key factors. While a third considered cash flow, rental income, and appreciation.
For real estate investors who are overwhelmed by the sheer number of best cities to invest based on all different criteria, we narrowed the list down to seven housing markets by pulling each market that was mentioned at least three times. We then pulled local data from each real estate market as well as our own data from Visio rental property loans in that market. The chart below outlines our research on all claimed, "best real estate markets."
Continue reading to learn about the top seven cities to buy rental property include: Atlanta, Dallas, Orlando, Charlotte, Phoenix, Raleigh, San Antonio,
Atlanta is our clear best real estate market for rental investors with mentions on six out of ten top sources. Not to mention, the Atlanta metro area was identified as the number one housing market to watch in 2023 in the National Association of Realtor's On the Horizon: Markets to Watch in 2023 and Beyond and report. Visio borrowers love Atlanta for real estate investing. We've funded over $28 million in rental properties in the area.
Rental demand is high with 55% of households renter-occupied, according to Zumper. Further, the rent of two plus bedroom housing units is steadily increasing. Zumper found that the rent of a two bedroom unit increased by two percent from December 2022 to January 2023. The current average rent for a two bedroom unit is $2,237 and for a three bedroom unit is $2,250. Atlanta rental rates are higher than the national average of $1,295 for two bedrooms and $1,509 for a three bedroom (Source: Statista). This high monthly cash flow potential makes Atlanta ideal for purchasing an investment property.
Here are some other key factors contributing to Atlanta's investability:
Population growth and job opportunities
The Atlanta Regional Committee (ARC) forecasted that the Atlanta population will grow by 2.9 million people in 2050. And job growth is expanding with the public. By 2050, 1.2 million jobs will be added in Atlanta, bringing the total to 4.7 million jobs. That's a job growth rate of 34%.
Additionally, Atlanta is a worldwide hub for businesses. The Metro Atlanta Chamber claims Atlanta has the third highest concentration of Inc. 500 companies in the country. The city is also headquarters to 31 Fortune 500 Companies.
Affordable housing prices and high rental income potential
Atlanta is relatively affordable compared to other major metropolitan housing markets. The Atlanta Voice reported that the average home price is currently $390,000. The paper also quoted Coldwell Banker President Laura Rittenberg: "The cost of living in Atlanta provides more bang for the buck," she said.
Norada Real Estate Investments highly recommends investing in Atlanta, and supports The Atlanta Voice's claims that the average price of a home in Atlanta is below the national average home price. The city offers cap rates up to 11% as well as high appreciation potential. "Atlanta real estate has continued to appreciate faster than most communities in the nation," Norada reported. In fact, Atlanta has an annual appreciation rate of 28.36%.
High quality of life
The Metro Atlanta Chamber reported that Atlanta was named the most livable city in the U.S. in the Economist 2022 Report. Their Metro Atlanta Profile covers many of the qualities that draw people to Atlanta including:
- Healthcare: Atlanta has 110 hospital locations with over 10,000 beds.
- Education: Atlanta is home to more than one million pre-k through twelfth grade students. The city is also home to 330,000 undergraduate and graduate students enrolled in 97 higher education institutes.
- Major Attractions: This includes but is not limited to the CNN Center, Atlanta Botanical Gardens, and Fernbank Museum of Natural History.
The Dallas Fort Worth area is our number two suggestion with five mentions out of the top ten sources, and Visio has funded millions of dollars of rental properties in the area. In fact, The Dallas Business Journal recently named Dallas the number one Texas rental market of 2022. As of early January 2023, Dallas rental properties had a 92.4% occupancy rate with an average rental income of $1,497 per month on 881 square foot units. Dallas also has a high volume of renters. Rent.com reported that 59% of all Dallas households are renter-occupied, compared to the 34% national average (source: RubyHome).
Dallas also is a great city to buy rental property for several other reasons, including:
Many job opportunities and low unemployment
In their recent, Best Places to Live report, U.S. News did a deep dive into the best real estate markets, including Dallas, Texas. In addition to multiple large employers spanning many major industries, the Dallas average annual salary is on par with the national average at $56,190. Dallas, which is home to American Airlines, AT&T, and Bank of America, also has a low unemployment rate compared to the national average at 7.9%.
Tangible entry point for real estate investors
The MetroTex Association of Realtors reported that the median sales price of a home in the greater Dallas metro area is $385,000. Not only does Dallas offer an affordable market value, but the city also currently has a 2.2 month supply of inventory and an average of 90 days on the market. This makes Dallas rental properties relatively attainable for real estate investors.
Dallas draws in young professionals and families
U.S. News named Dallas Fort Worth number 32 out of 150 top places to live due to its combination of big-city excitement and quiet, suburban living. The area continues to attract young professionals and families with steady population growth since 2005.
Tied with Dallas Fort Worth, the Orlando real estate market has five mentions out of the top ten sources. Orlando is also a popular real estate market for Visio investors with nearly $10 million in closed loans in the area. The city offers a high median monthly rental income of $2,183, which is 4% higher than the national average (Source: Zillow Rentals Data). Rental demand in Orlando is our highest market discussed yet with 63% of households renter-occupied, according to RentCafe.
Here are some other reasons to invest in real estate in Orlando
Continued job growth and population growth
In a January 2023 report, the Orlando Economic Partnership published some very promising data on job opportunities in Orlando. Orlando added an impressive 53,000 jobs in 2022. Additionally, the city currently has a historically low unemployment rate at 2.3%. That's almost two full percentage points lower than the national average.
In terms of population, World Population Review says Orlando is home to 328,354 people, making it the 4th most populous city in Florida and 60th in the U.S. And it's only getting larger with a 2.16% population growth rate.
Affordable housing market with appreciation benefits
The latest report from the Orlando Regional Realtor Association puts the median listing price in Orlando at $353,000, which is relatively affordable. Orlando also currently has an appreciation rate of of 4% YoY. This gives real estate investors the opportunity to invest in one of the top housing markets at a good price and build appreciation over time.
Charlotte, North Carolina
The Charlotte real estate market was highlighted by four out of the top ten sources. Not surprisingly, Visio has closed millions of dollars of loans in the area, which is 47% renter-occupied (source: Zumper). Zumper found that the median rents are profitable and increasing year-over-year:
- One Bedroom Apartment
- Median Rent: $1,560
- YoY Rent Prices Growth: 14%
- Two Bedrooms
- Median Rent: $1,800
- YoY Rent Prices Growth: 11%
- Three Bedrooms
- Median Rent: $1,925
- YoY Rent Prices Growth: 8%
- Four Bedrooms
- Median Rent: $2,195
- YoY Rent Prices Growth: 5%
Charlotte also has a tangible entry point for real estate investors with a median home price of $392,000. Here are some other compelling reasons to invest in Charlotte, North Carolina:
High quality of life and low chance of a natural disaster
U.S. News named Charlotte the number 30 best places to live in the country and number two in North Carolina for many reasons. In addition to many lakes, parks and other natural attractions, the city has great shopping, amusement parks and restaurants. Winters are "famously mild," and Charlotte is unlike to get a hurricane or tornado.
Low tax rates
This point is golden for real estate investors. According to SmartAsset, North Carolina's property taxes are .20% below the national average.
Diverse job market
Charlotte is home to many Fortune 500 companies in varying industries including Bank of America, Duke Energy, and Honeywell International (Source: U.S. News). Further, the average income and unemployment rates are on par with the national average.
The rest of our hottest real estate markets list have made it onto three out of ten of the top sources. Phoenix is very popular with Visio borrowers, with over $8 million in funded rental properties over the last two years. And Phoenix is a very landlord-friendly city. The Phoenix Business Journal reported the lowest vacancy rates in 20 years at 3.8%. Phoenix is 36% -occupied with a median age of 34.4. This is great for investors since 72% of rental properties in the United States are occupied by those 44 and younger.
Phoneix real estate in 2022 was booming. Rental rates grew 28% and the area had a price to rent ratio of 26. If that isn't compelling enough, here are more reasons to invest in real estate in Phoenix:
Booming population fueling rental demand
The Phoenix Business Journal claimed that Phoenix has the highest projected population growth in the country, growing at an 11.2%. The growing population is creating a higher rental demand. "More people means more housing demand, and skyrocketing home prices make renting the more affordable option." Even though the value of homes is increasing, Phoenix remains tangible for investors with a median home price of $408,000 (Source: SoFi).
Increasing job opportunities
U.S. News and World Report reported that Phoenix is developing into a technology and finance hub. Large companies such as Wells Fargo, JPMorgan, Honeywell and Amazon have a significant presence in the area. Additionally, the 45 million people who vacation in the city each year are creating new job opportunities in the leisure and hospitality sectors.
Raleigh, North Carolina
Also with three mentions, Raleigh is a real estate market worth considering. SoFi calculated Raleigh's price to rent ratio to be a high 27. Due to the median home price of $407,500 and an annual median rent of $15,420, it is more economical to rent than buy. Investors looking to buy rental property in the area can get in at a good price and take advantage of appreciation. According to Norada Real Estate Investments, Raleigh real estate in 2022 appreciated 34.9%.
Some other reasons to consider buying investment properties in Raleigh include:
Bright economic growth
Norada Real Estate Investments claims Raleigh has an "economic future that ensures long-term growth in housing demands and rents." This is due to a diverse economy, which includes a large high-tech sector, several major hospitals, and an international airport.
North Carolina has several landlord-friendly laws, including one that allows landlords to recover legal fees from evicting a tenant (Source: Norada) There are also no pet laws or rekeying laws, which gives the landlord flexibility.
San Antonio, Texas
Home of the Alamo, and with nearly $10 million in closed investment property loans at Visio, San Antonio had three mentions out of the top ten sources. SoFi puts San Antonio at a price to rent ratio of 20 based on a median home value of $280,000 and an annual median rent of $13,920. The city is 46% renter occupied and single family homes have average rent of $1,956 (Source: Point2Homes).
Here are some additional reasons to look at the San Antonio real estate market:
High job growth and population growth
The San Antonio Express News reported that in September of 2022, San Antonio employers added more than 6,000 jobs. The year over year job growth is 1.7%, and the median household income is $58,522 (Source: Forbes).
With a population of 1.6 million, San Antonio is the seventh most populous city in the country, and it's growing. The San Antonio Current stated that San Antonio was the "fastest-growing major city in Texas on a percentage basis."
Home to many cultural attractions and colleges
Between Six Flags Fiesta, Sea World, the River Walk, and Tower of the Americas, there is a lot to do in San Antonio (Source: Forbes). San Antonio is also home to eight four-year colleges, including Trinity and UT San Antonio.
Other notable markets
Visio's hometown of Austin also had three out of ten mentions. While historically, Austin has been one of the hottest housing markets, Zillow has recently called the market "ice cold," and RealTrends has claimed it went from "hot to not." Another real estate market that was mentioned three times was Las Vegas, Nevada. Las Vegas is not on the downward trend like Austin, yet many reputable publications, such as the Las Vegas Review-Journal, say the market is flat.
Austin and Las Vegas were two markets identified as the best rental markets that we could not find supporting data on. There are also some real estate markets not identified or identified that we believe are worthwhile rental markets. Some of these markets include the Birmingham real estate market, Tampa housing market, and the Houston market.
When looking for places to invest in real estate, due diligence is of the utmost importance. We always recommend consulting with professionals before purchasing a real estate investment. And as we proved earlier searching the Internet for where to invest in real estate can result in quite diverse results.