2024 is a great year to explore the best places to invest in rental property, as the US rental market remains steady with multifamily housing delivering a solid performance. The rental market has exhibited economic resilience and multifamily developments continued to perform well throughout inflationary phases.
Investors eager to find the best place for real estate investment are urged to prioritize multifamily developments and locations that offer strong rental demand with steady growth and leveling rental incomes. As interest rates continue to soar across the US, experts have predicted housing prices to increase by 4% this year.
Renters, overwhelmed by the lack of home buying affordability, are likely to cling to low-income projects like Section 8 housing. At GCG Real Estate, we specialize in Section 8 housing and empower our clients with a wealth of resources to navigate the affordable housing market confidently.
Our detailed guide on the best places to invest in rental property will introduce you to the most promising housing markets in the US.
Finding the Best Places to Invest in Rental Property
As the cost of borrowing continues to rise, renting becomes more affordable than homeownership, expanding the rental market for investors who want steady and stable, passive income streams. Since 2020, the multifamily inventory has increased by over 3%, and around 500,000 new developments are expected to emerge across leading rental markets in the US this year.
However, not all rental markets can be treated alike; investors need to prioritize markets that demonstrate steady growth and stability. As you explore the US housing landscape for the best places to invest in rental property, be sure to conduct thorough due diligence on the elements listed below.
Market Research
Market research will help you understand the economic health and financial potential of your chosen city or suburban neighborhood. If the city or neighborhood has a higher number of listings, it may be a declining market. In order to find the best place to buy real estate, it’s important to find a market with low vacancy rates and higher rental demand to steadily increase your rental income.
Scrutinize the average rents in the area and be sure to calculate the potential rental income of every property you consider. At GCG Real Estate, we urge our clients to examine growth and financial projections for the next five years to avoid pitfalls and ensure steady profitability. It’s also wise to consult the local municipal department to learn about future developments and plans to choose a market that’s poised for economic development.
Lastly, don’t forget to explore the taxation landscape and examine how property taxes will impact your rental income.
Amenities & Life Quality
In order to attract and retain long-term tenants, it’s important to examine neighborhood amenities, school districts and job opportunities. The best places to invest in rental property offer a vibrant ecosystem to support modern-day life quality.
If you’re targeting families and young professionals, be sure to find a locale that offers a high-ranking school district, proximity to transportation hubs and job districts, and modern amenities. Also, be sure to investigate crime rates, public welfare facilities and natural disasters to avoid tenant retention challenges.
At GCG Real Estate, we perform thorough due diligence and introduce our clients to markets poised for robust economic growth
Top 5 Best Places to Invest in Rental Property
Our roundup for the top 5 best places to invest in rental property focuses on market trends, economic factors and rental income growth. We strongly urge investors to keep their property investment strategy and financial goals at the forefront as they scrutinize market trends for each of the housing markets ranked below.
1. Atlanta, Georgia
Atlanta, Georgia, beckons investors with a competitive housing market with a median home price of $430K, according to Redfin. The median price per square foot has increased from 2.1% since last year, while average home prices have decreased by 1.1%. Given the migration trends and economic dynamics, Atlanta distinguishes itself as a resilient market poised for investors eager to establish stable income streams.
Presently, median home sale prices in Atlanta are 10% lower than the national average, making it an attractive market for investors seeking affordability and rental growth potential. The reduction in home prices and high rental demand offer a balanced ecosystem for landlords to enjoy higher ROIs.
The rental demand in Atlanta is high, and Georgia is considered the best place for real estate investment in apartments in the US. More than 50% of Atlanta households are tenant-occupied, and the market has witnessed steady rental growth for over 8 years. Even though rental incomes have slightly declined in the central neighborhoods of Midtown, Buckhead and Emory, the suburban neighborhoods continue to thrive and attract migrants from the metro area.
Atlanta’s post-pandemic recovery has been remarkable, and it is one of the best places to invest in rental property for investors seeking steady returns and growth potential.
2. Detroit, Michigan
The Motor City is undoubtedly the best place to invest in real estate for investors seeking affordability and low entry costs. Detroit is one of the leading markets for affordable housing, and the low cost of living attracts tenants seeking high life quality. The local housing market is competitive and steady rental demand coupled with rising home values make it a vibrant ecosystem.
According to Redfin, the median sale price has risen by 17.8% since 2023, while the median sale price per square foot has increased by 15.2%. The last decade has witnessed Detroit rising from an alarming economic recession, becoming the hub of low-income and multifamily housing developments.
The local economy is thriving with the advent of major recruiters like Google, Microsoft, General Motors and Apple’s recent collaboration with Michigan State University. This city offers landlords a steady rental income with an ecosystem that supports superior life quality with modern amenities, abundant recreation and job security.
At GCG Real Estate, we specialize in the Detroit housing market and help our clients navigate affordable developments that offer high ROI potential. Feel free to book a consultation session to start exploring the local market for promising rental investments today!
3. Cape Coral, Florida
With a population of over 200,000, Cape Coral is one of America’s fastest growing cities, and one of the best places to invest in rental property in Florida. Cape Coral attracts affluent tenants and vacationers who seek expansive and luxurious waterfront properties, making it ideal for long and short-term rentals.
Market trends reveal a competitive market with a median sale price of $391K, witnessing a 5.8% decline in home prices since last year. As home prices continue to decline, 2024 is a great time for investors to acquire waterfront properties and single family homes across this picturesque city.
The local housing market is stable and balanced for both buyers and sellers. Situated in the heart of Lee County, Cape Coral beckons tenants and families with its family-friendly amenities, tropical climate and stunning waters. In the last five years, Cape Coral has witnessed impressive economic growth, making it one of the best places to buy property and establish passive income streams.
The rising demand for homes has given rise to multifamily and apartment developments, while the demand for single family homes is also steady. The average rent of an apartment amounts to over $2,000 per month, while a single-family home has a monthly rental income of over $3,000. More than 23% of Cape Coral households are rental occupied, and migration patterns suggest a growing demand for rental properties.
Investors exploring the Cape Coral housing market will notice a renter preference for sprawling waterfront properties featuring large swimming pools, sunlit patios and access to the waterways. Since last year, the median price of waterfront homes has increased by 25.7%, making Cape Coral one of the best places to buy property with water access in Florida.
Reports suggest that rents across Cape Coral have increased by over 17% since 2023 – significantly higher than the national average given the city’s high rental demand and low supply.
4. Las Vegas, Nevada
Las Vegas is one of the best places to invest in rental property in South Nevada, with a median home sale price of $440K – increased by 7.3% since 2023. The median sale price per square foot has surged by 9.7%, indicating a growing and stable housing market.
Sin City has emerged as the best place to invest in property for low-income tenants seeking affordability, as the city’s employment rates continue to be lower than the national average. Renters in Las Vegas seek a combination of affordability and high life quality, which drives the demand for affordable housing and multi-family developments.
Population in Las Vegas continues to surge as tenants migrate from across the country, primarily Los Angeles and other California cities. Las Vegas’ post-pandemic revival has been impressive and the rental market is stabilizing with a rental income growth of around 40% since 2019. The local housing market is considered the best place to buy property in the South West as it serves as a bridge between multiple major housing markets.
The cost of buying a home or an apartment in Las Vegas is considerably lower than other major metropolitan hubs with the growth rate being steady and competitive. Investors looking for the best place to invest in real estate in Las Vegas are encouraged to explore the built-for-rent neighborhoods.
These purpose-built communities feature apartment buildings and single-family homes, offering lucrative ROIs with a low entry cost. Over the years, Las Vegas has emerged as the 97th fastest-growing housing market in the US, owing to new developments and affordable living costs.
5. Knoxville, Tennessee
The Eastern Tennessee housing market is considered one of the best places to invest in rental property in 2024 after its resurgence from a two-year economic slowdown. Home prices and annual rental incomes have grown modestly across Knoxville, owing to the reduction in mortgage rates and improved affordability.
Investors looking for the best place to buy property in Tennessee are returning to Knoxville, given the recent improvement in affordability conditions. Knoxville attracts rental investors with favorable migration patterns, demographics, shifting household structures and new developments stimulating the local economy.
According to Redfin, the local housing market is competitive with a median home sale price of $345K. Home prices have surged by 4.5% since last year, while the median sale price per square foot has increased by 8.7% – indicating a profitable market poised for stable growth. Knoxville is home to over 17,400 rental properties, and tenant-occupied properties form over 50% of the housing market.
With a rental vacancy rate of 6.2%, Knoxville favors landlords by offering an ecosystem where rental income can be increased steadily for higher ROIs. Knoxville is witnessing a greater demand for 2-bed homes, which occupy over 40% of the housing market share. The demand for apartments is steady, while the demand for 5 or more beds is considerably lower.
Landlords can make over $2,200 monthly with a single-family home while an apartment is typically rented out for over $1,700 a month. In recent years, rent growth has witnessed a slight decline but this year, experts believe apartments will witness a rent growth of 3.1%
The best place to invest in real estate varies for each investor, depending on their unique goals and financial situations. We strongly urge you to enlist the support of seasoned professionals, experienced property managers, and well-versed in these local housing markets to make well-informed investment decisions.
Final Thoughts
At GCG Real Estate, we specialize in the Detroit, Michigan, housing market and help our clients explore lucrative affordable housing investments that offer guaranteed, government-backed returns. We welcome you to navigate the rental market with our seasoned investors and curate a profitable real estate investment portfolio for a stable, steadily-growing passive income.
Our investment specialists conduct thorough due diligence, from property inspection and market research to legal and taxation challenges, to steer our clients toward profitable investments. Get in touch with our team today to learn more.
