It doesn’t matter if you live in the USA, India, Germany, or anywhere else, there exist basic real estate principles that are a constant regardless of location – investors want high returns on investment and the lowest risk possible. To maximize your real estate investment returns, you want to buy property in places that offer the following:
High rental occupancy: Don’t invest where there is a high vacancy rate
High rentals relative to your mortgage repayments
A low tenant default rate: You need to know tenants are good about paying the rent
It takes in-depth research to invest successfully. Market timing also matters as some cities have exceptional rental income prospects, but a very tight inventory. It can be very difficult to find and close deals that fit your specific investment criteria. Therefore, you need to act fast and wisely. Figure out if your market is growing, stable, or declining. Are you going for short term capital gains or for long term buy and hold? To make it easy for you, Reunion Investments offers top notch market consulting so you can make an informed decision on where to invest.
10 Best Places To Invest In Real Estate In 2020
We looked at data and examined trends from across the US to bring you this list of the 10 best places to invest in real estate in 2020.
10. Chicago, Illinois
Home to the Willis (Sears) Tower and almost 13 millions residents in its entire metro expanse, Chicago has the nation’s third largest metropolitan area. With a large population, a diverse economy, and a stable market, it’s no wonder it makes the top ten. Of all the Fortune 500 companies, 32 of them are headquartered in the Windy City. Due to several factors, including private sector employment and over 50% of the population renting, Chicago is one of the best real estate markets for investing in rental properties for sale.
When you have a population of renters that large, it’s clear to see that rental income in Chicago well exceeds what you’d expect in many other large cities. On average a one-bedroom apartment’s rent is roughly 1,000 dollars a month, while a two-bedroom will cost an average of 1,300 dollars. One reason this city didn’t rank higher on the list is that rental rates for Chicago rental properties are rising more slowly than others, increasing at 0.9 percent a year, which is one third less than the 1.5 percent rental rate increase in 2019 for the U.S. On average it takes 50-55 days for a house in Chicago to sell. Although, more desired homes can sell in about two weeks.
Why Invest in Chicago Real Estate?
· Ranked best in the 2018 Time Out City Life Index (Time Out Group)
· Robust Rental Market – Over 50% of residents rent
· Totally revamped single-family homes with excellent ROI
· Placed on UBS list of the world’s wealthiest cities
· One of the most balanced economies in the country
· Number seven in the world according to 2017 Global Cities Index
9. Austin, Texas
The capital of Texas’ housing market has gained plenty of momentum, with home values rising nearly 100% since 2010. Austin’s real estate market doesn’t compare in size to Dallas, San Antonio or Houston, but its housing market is substantial. Austin has risen as another technology rich city in the last 5-7 years.
An abundance of well paying tech jobs has moved to Austin in the last couple of years. Millennials will likely be the biggest buying force in Austin in 2021, and this is expected to continue for years to come. The areas with neighborhood amenities, nearby shopping, restaurants, etc. will be highly coveted. Austin has a strong and diverse economy is strong and diverse with a shortage of homes for sale. The quickness in which people are moving to Austin makes it nearly impossible to keep up with demand.
Why Invest in Austin Real Estate?
· Robust economy
· Low unemployment rate
· Growing population.
· 11th most populous city in the U.S. and the 4th most in Texas
· Rising rents
· Median rent per month is $1,750
· A top seller's real estate market in the U.S.
· Austin’s track record is one of the best for long-term real estate investments in the U.S. during the previous 10 years.
· Median home price has increased to $405,093
8. Tampa, Florida
Having a population of more than 4 million this Florida city is not only an eye-catching metropolitan, but moreover it is one of the most regularly visited tourist spots. There are many economic and development prospects ascribed to this market, which was labeled as one of the paramount real estate markets in the US in the last 1-2 years. Tampa’s housing market is progressively rising, although the value of home has risen 5.3% over the last year, prices remain low and properties have a decent chance for a strong increase. Available inventory has dropped 21.4% in the whole Tampa metro region, which is one of the main influences in increasing home prices. The standard for a balanced market is 5.5 months of inventory, and Tampa is sitting at less than two months.
Why Invest in Tampa Real Estate?
· Residential properties in Tampa are quickly growing
· Inexpensive Real Estate
· Median Home Price is about $250,000
· Median Rent is $1,600
· 5% lower cost of living than the national average
· Ability to buy properties at lower rates to rent out to new residents of the city to improve one’s revenue
· Home to four Fortune 500 companies
· One of the fastest-growing employment hubs in the U.S.
· Excellent healthcare, education, and transportation
7. Spokane, Washington
Coming in at number 7 is Spokane, WA. It may be small with a population of 213,000 people, but it is becoming a real estate hot spot. Housing prices are very affordable compared to many other parts of the country at a median price of about $265,000 that has outstanding mortgage coverage. Spokane’s housing market is outperforming Seattle’s for the first time in nearly seven years, according to Zillow’s data. Areas north of Garland Street, the Perry District, Spokane Valley and Liberty Lake are some of the faster growing, more preferred parts of Spokane. Prices are quickly rising, so now is a good time to invest in Spokane real estate; home values swelled by over 13% in 2019. Real estate growth rates in Spokane's have nearly matched the national average over the last ten years, with an average annual appreciation rate of 0.23% through that timeframe.
Why Invest in Spoken Real Estate?
· Second most populated city in Washington
· More than 87 parks and has six community aquatic centers
· Several hip and revitalized neighborhoods with good walkability and local shops
· Economy includes: mining, forestry, agribusiness, and biotech segments
· Affordable properties
· Many buyers are leaving expensive markets like Seattle and Portland to head to Spokane
· Rising Rents
· Single-family and rental property homes are seeing good returns
· One of the top seller's real estate markets in the country
6. Orlando, Florida
This home to Disney World continues to be a durable real estate investment location. With long-term residential or holiday markets, investors are given options for their properties. Improving Orlando real estate and prosperous tourism are two of the key factors behind Orlando’s economic constancy. This development is connected to the increasing population and job prospects in Orland, which means more rental income and tourism.
Why Invest in Orlando Real Estate?
· Fourth-largest city in Florida
· Population of about 2.5 million
· Third-largest metropolitan area in Florida
· Ranked second by Forbes in America’s Fastest-Growing Cities
· One of the best long-term real estate investments throughout the last ten years
· Appreciation over the last decade was 43.67%
· Over 60% of residents rent
· Economy and job growth
· Unemployment rate 2.5% in Dec 2019 – U.S. Bureau of labor statistics
· A favorite national seller's real estate market
5. Las Vegas, Nevada
Viva Las Vegas and its real estate. Las Vegas has had several booms in its history, and one huge real estate collapse during the Great Recession. Las Vegas hasn’t quite recovered the 50% or greater drops in home values from 2008, but that shouldn’t scare off investors. For knowledgeable investors, the Las Vegas real estate market is constant and unsurprising. The Las Vegas housing market had a huge surge in 2019.
Many new businesses have moved to Las Vegas for its friendly business environment. Data shows Las Vegas home values as the highest year-over-year increases in home values, with a 13 percent rise, according to the S&P’s Corelogic Case-Shiller Index in 2018.
Why Invest in Las Vegas Real Estate?
· Most populated city in Nevada and 28th in the country.
· Las Vegas Valley is the leading financial, commercial, and cultural center for Nevada
· Diverse Economy driven by health, high-tech, and other commercial interests
· Tourism, gaming, and conventions feed the retail and restaurant industries
· Mining is the backbone of region’s industrial sector. Construction also offers a large contribution to the economy
· No state tax for individuals or corporations
· Government is the metropolitan’s largest employer
· Unemployment rate 3.5% as Dec 2019 – U.S. Bureau of Labor Statistics.
· Average rental income rose 5% from previous year
· The average condo or townhome prices increased 11 percent
· Very popular U.S. seller's real estate market
4. Atlanta, Georgia
Savvy rental property investors can find appealing buying opportunities in Atlanta. Atlanta’s 14 percent population increase over the last ten years is fueling the growing need for housing. Atlanta presents prospects for all segments of real estate.
Georgia is regarded as one of the 10 most prolific states that contribute to the USA’s annual GDP. Property prices in Atlanta are forecasted to rise in the coming years. If you want to get ahead of the competition, now is the time to purchase.
Why Invest in Atlanta Real Estate?
· One of the nation’s top rental markets
· Newly renovated properties
· Starting price of $70,000
· Median monthly rent is $1,500
· 500 people move to Atlanta daily
· 3-year appreciation prediction of 9.3%
· Atlanta’s economy is 8th in the nation for GDP and is home to 16 Fortune 500 companies
3. Houston, Texas
Houston has been a leader in real estate investment for quite some time. One of the biggest players in the US oil and gas industry, this city is a huge provider of perennial employment opportunities. These factors continue to charge the Houston housing market. $412,000 – that’s the value of the average home in Houston. What makes Houston a stout investment city is that it has an extremely active real estate market. Which means it is pretty simple to exit investments and find someone to buy your home.
Why Invest in Houston Real Estate?
· Nation’s leading market for job creation
· Housing real estate is reasonably priced
· 4th largest city in the US
· Priced 5%-20% lower than current fair market value
· Median monthly rent $1,550.
· 3-year growth prediction of 10.5%
· Unemployment rate is well below the national average
· Second only to New York in Fortune 500 Companies that call Houston home
2. Dallas, Texas & Surrounding Tertiary Markets
Another city in Texas that’s very worthy of real estate investment is Dallas. High rental rates compared to the house price make it a worthwhile market to invest in. The Dallas real estate market has a vast range of investment properties; you only need to find your renters to lease out the property. Hiring a local property management company can help make finding renters for your property in Dallas easy.
Consider investing in Dallas real estate for its very diverse economy that has a niche for people of all income levels. Estimates show that 340 people move to the DFW Metroplex every day. With rent more affordable than a mortgage, Dallas has the lowest homeownership proportion in the nation. The requirement for rental properties has swelled 14% over the past year, so it’s an ideal time to invest in Dallas real estate. The Dallas-Forth Worth area is budding very quickly. There are also great real estate investing opportunities in the tertiary markets surrounding Dallas. These markets include Wichita Falls, Tx and Burkburnett, Tx.
Why Invest in Dallas Real Estate?
· Population projected to increase 100% in next 15 years
· One of the leaders in the U.S. for employment and population growth
· Nearly 53% of Dallas rents compared to 33% national average
· Homes 5% – 15% below market value
· Median monthly rent $1,800
1. Boise, Idaho
This may come as a surprise to some, but those who are savvy in real estate aren’t surprised that Boise clocked in at #1. Like Houston, it has a record of being unsurpassed for long-term real estate investments in the U.S. The supply and demand subtleties continue to push home costs up in Boise. Boise was ranked as the #1 housing market in the U.S., by Realtor.com’s metro level housing calculation for the year 2020. Their primary measures were based on the collective yearly percentage growth in both home sales (0.3%) and prices (8.1%) projected in 2020 amid the top 100 major markets in the country.
Home prices are rocketing and smashing records despite the COVID-19 pandemic. Insistently tight inventory in the Boise Metro Area housing market, paired with nearly unheard of low 30-year fixed mortgage rates are maintaining a high demand, which then pushes home prices up in the area. The real estate growth rate was about 2.44% last quarter; that parallels it to an annual growth rate of around 10%. A nice profit is likely to be had for sellers.
Why Invest in Boise Real Estate?
· Population and job growth 2-3 times the national average
· Low cost transactions
· Unemployment rate 3.5%
· Ranked sixth for job growth by Forbes
· 1-year growth projection 3.2%
THE BEST STATE TO INVEST IN REAL ESTATE MIGHT BE TEXAS
Everything's bigger in Texas – a fitting slogan for the second largest state in terms of both population and land mass. Multiple major cities call Texas home, from the desserts of El Paso to the bustling Dallas-Fort Worth metroplex. Houston is the biggest city and only a few hours from both the capital, Austin, and San Antonio, Texas.
But do you know what else is bigger in Texas? The amount of money you keep in your pocket from real estate investments.
Population 28.3 Million
Median Household Income $57,000
Texas Economy Valued at $1.6 Trillion
Second in Job Growth
6 Overlooked Cities For Real Estate Investors
Let’s face it – investing in primary markets takes a wealth of capital and competition usually makes for less than desirable returns. Sure, New York and San Francisco sound exciting in theory, but real estate investing isn’t about exciting. It’s about making high returns and building a secure future for you and your family. There are plenty of opportunities where you can do just that – only maybe not where you first expected to. Find Out More
Cape Coral, FL
Baton Rouge, LA
Foreign Investment In US Real Estate
Foreign individuals and corporations are free to purchase residential or commercial real estate in the United States. In 2013, foreign buyers made up about 7% ($92.2 billion) of transactions in the $1.2 trillion U.S. real estate market (Source: Wikipedia). The annual survey of the Association of Foreign Investors in Real Estate ranked San Francisco, which had been one of the top five global cities since 2011, at 11th place, and Washington, D.C., at 25th from 15th place last year. Furthermore, the survey revealed that New York City is no longer the only No. 1 city in the US that appeals to foreign investors; that title is now shared with Los Angeles, which tied with New York in this latest survey.
5 Best Cities For Foreign Investment In United States Real Estate
According to an old survey of the Association of Foreign Investors in Real Estate (AFIRE), the United States was deemed the number one country for planned real estate investment and the 5 best cities for foreign investment in United States real estate (CRE) are:
Los Angeles (tied with New York)
New York (tied with Los Angeles)
With 58% of respondents’ votes, the US remains the country considered the most stable for real estate investment, and 86% said they plan to maintain or increase their investment in US real estate.
Residential Properties Purchased by Foreign Buyers in the United States
According to a report published in 2017 by NAR, Chinese buyers have been the top foreign buyers of U.S. residential property for three straight years, hitting a record high.
The below data has been taken from the report published by NAR (National Association of Realtors).
For the new foreign real estate investors, it is important to know that in the United States, real estate listing information is shared by agents using multiple listing services, and consumers can access that same information using real estate sites such as Zillow. Each state in the US has its own set of rules regarding the purchase of the real estate, including the type of purchase contract used, the method of closing the sale, and even the duties and titles of the individuals involved.
Make the most of your investment dollars in 2020 by investing in real estate. Our analysis of the 20 best cities to invest in real estate was based on the most recent housing market trends, rate of appreciation, rent prices, job growth, economy dependencies, quality of life, etc. Please note that real estate prices are deeply cyclical because its demand side is impacted by economic cycles. Much of it is dependent on factors you can’t control. The recent example is COVID-19 which has impacted our economy. Therefore, many variables can potentially impact the value of the real estate and some of these variables are impossible to predict in advance.