Looking to start making money from rental properties in 2019? Good thinking – to quote Marshall Field “buying real estate is not only the best way, the quickest way, the safest way, but the only way to become wealthy.” However, if we could make any adjustments to this quote, it would be “buying real estate in the right location.” It’s no secret that where you buy an investment property will determine your success or failure in the real estate investing business. And as a beginner investor, you definitely want to start out on the right foot. To help you get started, we did the research for you and found that these are the best cities to invest in real estate for beginners. Wondering how we came up with this list?
First off, the best places to invest in real estate rental properties typically have similar features in common. These include a growing population, strong job market, and a growing economy. Then, using predictive analytics and investment tools, we utilized a range of real estate metrics to narrow down the list. By doing so, we’ve found the top housing markets in the US with affordable prices, high rental rates, and good cash on cash return. The cities that we’ve selected are clear winners when it comes to locations that will give you the greatest chance of making money from rental properties.
To learn more about how we will help you make faster and smarter real estate investment decisions, click here.
Now, here are the best cities to invest in real estate, listed in no particular order.
Panama City, Florida
Florida’s strong economy makes success obtainable to its real estate investors in almost any city in the state. Panama City particularly appeals to beginner investors due to its cheap property prices. The housing market is also on the rise thanks to the business growth and the local tourism industry which are causing property values to increase. Moreover, residents here earn high incomes, making the Panama City traditional housing market perfect for real estate investors seeking profitable investments. It’s also one of the best cities in Florida to invest in vacation home rentals, as it has a profitable short-term rental market as well. It’s no wonder why many beginner investors have their eye on Panama City for real estate investments in 2019.
- Median Property Price: $243,935
- Price/Square Foot: $134
- Price-to-Rent Ratio: 14
- Monthly Rental Income: $1,441
- Cash on Cash Return: 3%
- Days on Market: 52
Columbus, Ohio
Columbus has truly transformed itself and recently emerged as one of the nation’s most technologically sophisticated cities. Over the last few years, the city’s population has grown by 9% which is faster than the national average of only 5.29%. Just like most housing markets in the Midwest, Columbus investment properties are affordable AND have high rental rates. This makes it one of the best cities to invest in rental properties for those looking to make positive cash flow and good cash on cash return. Surprisingly, Columbus is also one of the best cities to invest in real estate short-term rentals thanks to football season.
- Median Property Price: $225,307
- Price/Square Foot: $132
- Price-to-Rent Ratio: 16
- Monthly Rental Income: $1,167
- Cash on Cash Return: 2%
- Days on Market: 78
Related: Columbus Ohio Real Estate Market 2019: Make a Move Now and Invest
Jackson, Michigan
As you can see from our real estate data and analytics, the prices of homes for sale in Jackson are some of the most affordable on our list. As a matter of fact, property prices here are some of the most affordable in the nation! This makes it a great place for real estate investing for beginners interested in buying rental properties in cash. In addition, according to Zillow, home values in Jackson have gone up 13.1% over the past year and are expected to rise by 7.0% in 2019. This is quite impressive and shows that Jackson real estate appreciation is strong. In turn, this means you’ll benefit from both cash flow and long-term appreciation if you buy an investment property in Jackson.
- Median Property Price: $172,453
- Price/Square Foot: $98
- Price-to-Rent Ratio: 13
- Monthly Rental Income: $1,076
- Cash on Cash Return: 2%
- Days on Market: 102
Indianapolis, Indiana
Next up on our list of the best cities to invest in real estate for beginners is Indianapolis. The Indianapolis housing market is the 2nd largest in the Midwest and enjoys a strong, diverse job market in addition to great schools and universities. For this reason, Indianapolis is a populous city with 2.1 million people. Forbes also ranks it among the best downtowns and most livable cities in the US. While real estate prices in the city are in line with the national average, most of its residents live in rental properties as a more affordable option than owning. This strong demand makes Indianapolis one of the best multifamily markets in 2019!
- Median Property Price: $214,446
- Price/Square Foot: $100
- Price-to-Rent Ratio: 16
- Monthly Rental Income: $1,118
- Cash on Cash Return: 2%
- Days on Market: 90
Want to invest in a multifamily property in Indianapolis or any of these cities? Find the most profitable properties for sale right now using Mashvisor’s tools!
Wichita, Kansas
The Wichita housing market appears to be heading in the right direction, and the future is bright for the largest city in Kansas. In fact, experts agree that Wichita real estate is now expecting steady growth thanks to strong demographic and economic fundamentals. Moreover, homes for sale in Wichita are significantly lower than the national average and are appreciating at a fast rate according to FortuneBuilders. For beginners investing in rental properties, affordability and appreciations are two factors that suggest that Wichita real estate investments will thrive in 2019.
- Median Property Price: $221,466
- Price/Square Foot: $97
- Price-to-Rent Ratio: 18
- Monthly Rental Income: $1,018
- Cash on Cash Return: 2%
- Days on Market: 83
Philadelphia, Pennsylvania
Philadelphia is one of the best cities to invest in real estate for beginners for many reasons. First off, while it’s currently a seller’s market, you can still find affordable investment properties for sale across the city. Not only is the Philadelphia housing market affordable, but half of the city’s population still resides in rental properties. This means real estate investors here will see a high demand for their rentals. In addition, job growth in the city continues to show positive signs thanks to the highly educated workforce. Of course, this translates into high rental rates and profitable real estate investments for you!
- Median Property Price: $301,291
- Price/Square Foot: $511
- Price-to-Rent Ratio: 17
- Monthly Rental Income: $1,441
- Cash on Cash Return: 3%
- Days on Market: 88
For more details, read: Philadelphia Real Estate Market 2019: Why and Where to Invest
Pittsburgh, Pennsylvania
The City of Bridges has always been a top housing market in the US, so it’s not surprising to see it on our list this year. It has a massive population, a stable economy, and positive real estate investing trends overall. Pittsburgh is also one of the major cities expecting downward ownership and increasing demand for rental properties according to the Beracha, Hardin & Johnson Buy vs. Rent Index. This means that the city’s livability and strong job market are attracting residents who choose to rent over buying a house. As a beginner investing in real estate, this is obviously an advantage and a reason to start searching for homes for sale in Pittsburgh.
- Median Property Price: $238,934
- Price/Square Foot: $71
- Price-to-Rent Ratio: 16
- Monthly Rental Income: $1,201
- Cash on Cash Return: 2%
- Days on Market: 101
Tulsa, Oklahoma
The affordability of Tulsa’s real estate market has been a secret for decades, but it looks like the secret is out. Last year, Realtor.com ranked Tulsa as one of the top 10 housing markets that will rule 2018. Today, the low property prices, coupled with relatively high rental rates, continue to make Tulsa one of the best cities to invest in real estate in 2019. Positive trends for real estate investing in the city include historically low interest rates, the creation of new jobs, a low unemployment rate, and new housing starts. This proves that the Tulsa housing market should experience a prosperous 2019.
- Median Property Price: $296,506
- Price/Square Foot: $114
- Price-to-Rent Ratio: 21
- Monthly Rental Income: $1,197
- Cash on Cash Return: 2%
- Days on Market: 61
Now more than ever, it’s a great time to buy a rental property in Tulsa. Use our Property Finder to find lucrative investment properties that match your criteria in a matter of minutes!
Oklahoma City, Oklahoma
The Oklahoma City housing market is strong in 2019 mainly due to the growing oil and gas industries and low property tax. The job market is strong and is expected to stay so as the population is increasing with more people and companies moving to the city. What’s special about Oklahoma City is that it’s one of the best cities to flip houses thanks to its very reasonable costs of home renovation and remodeling. Thus, a beginner real estate investor can buy properties here either to rent out or flip for a quick profit – and both strategies have great investment potentials. There is no better time to get into real estate investing in Oklahoma City than right now!
- Median Property Price: $260,995
- Price/Square Foot: $119
- Price-to-Rent Ratio: 17
- Monthly Rental Income: $1,274
- Cash on Cash Return: 2%
- Days on Market: 98
St. Louis, Missouri
Throughout 2018, it seemed that more and more real estate investors discovered this hidden gem in the Midwest. St. Louis is increasing its appeal for real estate investing for beginners with big ongoing plans for improvements. From tourist attractions like a world-class aquarium to nearly $6 billion worth of renovation happening between midtown and downtown, the city’s economy keeps growing. Moreover, the limited inventory and increasing demand for rental properties as more people move to the city have already led to an increase in property values. Meaning, a real estate investor can buy a cheap investment property here and see its value increase over time. St. Louis is one of the best cities to invest in real estate for beginners looking to invest for appreciation.
- Median Property Price: $239,267
- Price/Square Foot: $120
- Price-to-Rent Ratio: 18
- Monthly Rental Income: $1,093
- Cash on Cash Return: 2%
- Days on Market: 87
For more details, read: St. Louis Real Estate Market 2019: What to Know Before Investing
Final Words for Beginner Investors
Real estate investing for beginners requires finding the right location before searching for a profitable investment property. Luckily, you came to the right place! Mashvisor’s tools can help you with conducting a neighborhood analysis in the best cities to invest in real estate and finding and comparing the best properties for sale there all in a matter of minutes. To start looking for and analyzing investment properties in the city and neighborhood of your choice, click here.
