When investing in real estate, it’s important to take into consideration socio-economic factors that determine the opportunity for high growth of the real estate market. Indeed, the best markets to invest in real estate are those that offer low unemployment rates and population growth.
Therefore, our list of the best markets to invest in real estate includes best cities for job growth and above national average population growth. Continue reading this article to find out how to identify a high-growth investment location and where to buy your next rental property.
Related: 8 Best Cities for Real Estate Investment 2018
Note: This list of best markets to invest in real estate is made with the help of the Emerging Trends in Real Estate report, a highly regarded yearly market forecast issued by ULI and PwC. Because the major cities across the US were analyzed, we are able to easily identify the best places to invest in real estate for high growth. You can read the full report here.
What to Look for When Investing in Real Estate for High Growth
The most successful real estate investors are those who are able to look at a city and determine which part is most likely to experience growth. On a larger scale, being able to identify favorable real estate investment trends has enormous advantages in terms of success and profit. These are the trends to look for:
A healthy economy is an important foundation for a strong real estate market. This can be measured by looking at economic indicators such as GDP and employment data. So, it is 100% correct to say that when the economy is not doing well, neither is real estate.
The best markets to invest in real estate are those with positive job growth. As a result, people move to cities that offer employment opportunities. The rental property sector is one of the many winners of increased job growth. Many people are unable to take out loans to purchase their own homes. High demand for rental properties leads to more profit for rental property owners. Today, the national unemployment rate is 4.0%, down from 4.36% the previous year.
Related: Job Growth and Its Effects on the US Housing Market
As a rule of thumb: the more people taking part in the economy, the greater the demand for housing. Trends in population growth are an excellent way to predict a real estate market’s success.
When looking at US real estate markets, it is clear that in the past years the hottest and best markets to invest in real estate are those with the strongest and fastest population growth in the country. The impact of population growth on the housing market is evident by the increase of demand for rental properties and property value if supply is not in line with demand. According to The Census Bureau, the US national population growth in 2018 was 0.71%
Without a positive prospect for housing supply, the two previous factors do not really mean anything. If housing demand is not met with the needed supply, this would drive up housing prices and cause housing supply shortages.
Related: 10 Best Places to Invest in Real Estate in 2019
The Best Markets to Invest in Real Estate for High Growth in 2019
The Emerging Trends in Real Estate report lists the following 5 markets as the top Markets to Watch in 2019. According to the report, these are the best markets to invest in real estate with the potential for more growth over traditional gateway markets.
Note: Real estate analytics provided below are from Mashvisor’s Investment Property Calculator– the ultimate tool for real estate investing. For more information about our product, click here.
1- Dallas/Fort Worth
The Dallas- Fort Worth metroplex registered the highest population growth in the country in 2017 with a 146,000 resident jump. The trend, which continued in 2018, has signaled a boom in construction of new homes and infrastructure.
The strong economy of the metroplex is evident in its strong labor market growth (4.3%) due to increased population and low cost of doing business. However, supply is yet to meet the high housing demand. This can be seen in the rising house prices.
- Median Property Price: $494,512
- Traditional Rental Income: $2,204
- Airbnb Rental Income: $3,015
2- New York–Brooklyn
While it might not be easy to buy a real estate property in New York City due to its extremely high prices, this gateway market ranks 2nd in the best markets to invest in real estate for growth. The population of NYC has climbed 5.5% since 2010 and according to the Labor Statistics, the city has experienced a 1.7% job growth as of October 2018.
- Median Property Price: $1,113,268
- Traditional Rental Income: $3,130
- Airbnb Rental Income: $3,437
Job opportunities and affordable housing are the main factors that contribute to the success of the Raleigh/Durham real estate market which earned 3rd place among the best markets to invest in real estate for growth. The region is one of the fastest growing regions in the state of North Carolina in terms of population and job growth, thanks to the Research Triangle which is home to many universities and research facilities.
- Median Property Price: $428,306
- Traditional Rental Income: $1,510
- Airbnb Rental Income: $2,359
Owning an investment property in Orlando is a wise decision. The city has been in the top 5 best markets to invest in real estate for 3 years in a row. Since 2010, the population of the Orlando metropolitan has increased dramatically by 17.6% thanks to affordable housing and job opportunities for young professionals.
Owning a rental property in the state of Florida has many advantages since it is one of the most landlord-friendly states in the country.
- Median Property Price: $318,615
- Traditional Rental Income: $1,559
- Airbnb Rental Income: $2,379
The Emerging Trends in Real Estate report ranks the Nashville housing market as #1 in homebuilding prospects in 2019. With one of the lowest unemployment rates in the country at 2.7% and job growth over the last year of 2.1%, Nashville is a booming real estate market that offers a high return on investment, especially for short-term rental investments. Just be sure to check the legal regulations before investing in Airbnb here.
- Median Property Price: $405,269
- Traditional Rental Income: $1,773
- Airbnb Rental Income: $3,666
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.