Quora: Which real estate markets should I invest in?

Peter Abualzolof, Owns a real estate analytics company:

The best markets for investing in real estate often have three features in common: job (employment) growth, population growth and affordability. These socio-economic factors can affect the overall profitability of an investment property and its success. There are several cities across the United States where the above-mentioned factors exist today. Here are 10 of the best real estate markets in the U.S in 2018:

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1. Orlando, FL

Orlando real estate is one of the best places for buying rental property in the entire state of Florida. In fact, Forbes ranked the city as the 3rd best investment location in the United States! It’s a home to 3.3 million residents and despite the low housing prices, many choose renting instead of buying rental property. As a result, rental rates are shooting up which is great for property investors!

The city is known for its warm climate, beautiful beaches, world famous amusement parks and attractions which makes it the ultimate tourists’ destination. With over 60 million people visiting the city, Orlando real estate is a top location not only for traditional, but also Airbnb investment properties.

Orlando Real Estate Market Statistics

Median Home Price: $188,000
Median Monthly Rent: $1,360

2. Tampa, FL

Tampa Bay is a heavily populated metropolitan area, with a population of over 4 million residents. The city is ranked as one of the top 20 fastest growing in the U.S, and it remains a great tourism destination, making it a great marker for short-term investment properties. Tampa also has a strong local economy with a strong focus on job growth in areas of financial services and healthcare. In addition, property investors can find affordable homes for even as low as $90,000!

Tampa Real Estate Market Statistics

Median Home Price: $136,000
Median Monthly Rent: $995

3. Jacksonville, FL

Jacksonville is one of the best real estate markets for buying rental property right now thanks to a low cost of living, a wonderful climate, and a business-friendly environment. Over the last 10 years, Jacksonville has grown by a 20%, as 1.3 million people currently living in the city and more continue come every year. In addition, Forbes ranked it #3 of the best cities in for jobs, with the workforce growing at a consistent rate with the population as well.

Jacksonville Real Estate Market Statistics

Median Home Price: $154,000
Median Monthly Rent: $1,050

4. Houston, TX

Although Houston real estate will stay in a recovery mode from Hurricane Harvey in 2018, real estate experts believe the housing market is already on a significant rising trend. Houston is considered more affordable than many U.S. markets. Thanks to the low prices of investment properties and lower mortgage rates, many people are moving to Houston from more expensive cities such as New York and San Francisco, leading to an increased demand for real estate investing.

Houston Real Estate Market Statistics

Median Home Price: $150,000
Median Monthly Rent: $1,425

5. Austin, TX

2017 was a great year for Austin real estate, and this positive trend is expected to continue in 2018. The local economy is thriving in Austin, with employment rates rising and more people are moving to the city. According to the real estate research team at Zillow, home prices in the Austin real estate market are expected to rise by 3% in 2018, yet, investment properties in Austin are still considered affordable!

Austin Real Estate Market Statistics

Median Home Price: $465,000
Median Monthly Rent: $2,190

6. Las Vegas, NV

Realtor.com named Las Vegas the number one real estate market to look forward to in 2018! The economy of the city is expected to grow with more people moving there for many reasons, but the main one being the city’s still striking home affordability and the low interest rates. Moreover, job growth rates are rising to 2.7%. Moreover, an average of 43 million people visit Las Vegas making it one of the hottest tourists’ destination in the country. Therefore, it’s one of the best real estate markets for investing in Airbnb rentals.

Las Vegas Real Estate Market Statistics

Median Home Price: $235,000
Median Monthly Rent: $1,395

7. Cleveland, OH

Cleveland is a fast growing market as Millennials are moving to the city to take advantage of the available job opportunities. With a workforce of over 2 million people, Cleveland is the 12th largest economic region in the nation. Moreover, it’s not hard to buy investment properties for as low as $70,000 and turn that into $800 a month. Not to mention, occupancy rates are at an astounding 98%! These make the city a great real estate investing market.

Cleveland Real Estate Market Statistics

Median Home Price: $122,000
Median Monthly Rent: $1,140

8. Columbus, OH

Columbus also offers great opportunities for real estate investing, especially for those who are looking for an affordable investment property. A real estate investor can buy a fully renovated income property for less than $100,000.

Job growth in Columbus is also one of the best in the country with an increase of 2.35% between 2016 and 2017 – a trend which will continue to grow in 2018. Accompanying this job growth is, of course, the increase in population. Columbus’ population has grown over 7% over the last 5 years. Furthermore, Forbes named Columbus as one of the top 10 cities in America to relocate to!

Columbus Real Estate Market Statistics

Median Home Price: $93,000
Median Monthly Rent: $1,000

9. Nashville, TN

Nashville’s employment rate has seen a growing in the past year thanks to a series of construction projects which helped the city’s economy. Despite the increasing home prices, local investment properties have remained affordable. In addition, the population is growing more than double the US rate!

Nashville Real Estate Market Statistics

Median Home Price: $289,900
Median Monthly Rent: $1,750

10. Atlanta, GA

Atlanta is the third-largest metropolitan region in the Southeast, attracting families from all over the southern United States as well as the Midwest. Last year, 74,500 new jobs were created in Atlanta – an annual growth rate of 2.85% (which is higher than the national average of 2.35%). With this job growth, the population also grew close to 4% which is a good sign for property investors buying rental property in Atlanta.

Atlanta Real Estate Market Statistics

Median Home Price: $152,000
Median Monthly Rent: $1,240

Is it really? For some reason I don’t think they have many Asians there…

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Did not realize Nashville is so expensive. It’s actually the 2nd most expensive behind Austin.

Asians are less than 6% of the population living in the US. That means the vast majority of the US won’t have many Asians. If you remove the Bay Area and LA, I bet the rest of the US is 2% Asian.

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Absence are East Bay, Daly City, Lake Tahoe, EPA, ESJ, NSJ, Sacramento… How come?

You’ve been talking about Orlando and Tampa for years, what happen?

Nothing happened. Changed strategy to buying REIT instead.

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You have bought healthcare REIT which is not a substitute for residential RE rental. Guess you have decided against investing out-of Bay Area rental.

I am buying REIT every month. And not just healthcare REIT. I am phasing out of OHI. So the only healthcare REIT left will be MPW.

You can look out for data center REITs or Residential REITs.

I like Mortgage based REIT NLY, but waiting to buy (and hold) when it comes down to $9. They are consistent dividend payers for last 10 years. If mortgage rate is increasing, the price is decreasing. IIRC, 2008 and 2011 were lowest.

Looks like Houston has the highest rent to purchase ratio. Implying the highest cap rate. Buy when there is mud in the streets. I did well in Orlando but the beaches are over an hour away. I wonder how much new construction there and if it wil put a cap on appreciation?


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