Top LocationsThe Best Places for Owning Rental Property and How to Find Them by Eman Hamed June 8, 2018June 5, 2018 by Eman Hamed June 8, 2018June 5, 2018What are the three most important factors that any real estate investor should consider when owning rental property? Location, location, and… location! If you’ve been in the real estate market for a while, then you’ve definitely heard this statement before. Where an investment property is located plays a key role in its success. For example, median home prices, running costs, property taxes, insurance, and rental income are all factors that determine how profitable an investment property is – all of which are different from one real estate market to another. So, for a successful real estate investing career, property investors have to find locations where owning rental property will yield a high return on investment.In this article, we will go through what property investors should look for in a real estate market in order to assess whether or not it makes for a good place to buy an investment property. We also list down the top 5 real estate markets in the US for owning rental property this 2018 (based on data from Mashvisor’s rental property calculator). Furthermore, we explain how Mashvisor will help in your search for the best investment property in these markets.To learn more about our platform and services we provide for real estate investors, click here! What to Look for in a Real Estate Market High Occupancy Rate When owning rental property, your main source of income as a real estate investor is the monthly rent collected from your tenants. No tenants = no rental income. This is why occupancy rate is important to look for in a real estate market for owning rental property. High occupancy rate means property investors will have a large pool of potential tenants to rent their investment properties to.In such locations, property investors can charge more for rent because of the high demand for rental properties and, therefore, generate positive cash flow. In addition, they don’t need to worry about vacancies – which results in losing money instead of making money in real estate investing. Thus, the best locations for owning rental property are those with a large or an increasing population as demand for real estate and occupancy rates will be high.High Appreciation RateIn real estate investing, appreciation means an increase in the investment property value over time. Appreciation is a way of making money from owning rental property over the long term. Basically, the longer property investors hold their investment properties, the more equity they build into their investment. Thus, thanks to appreciation, a real estate investor can sell the rental property for a price higher than the initial investment and make a profit.Different locations appreciate at different rates. To find a real estate market with a high appreciation rate, look for locations experiencing major renovations, having future development plans, or turning into business hubs – investment properties in such locations have higher expected appreciation rate and will be worth a lot more in 10 years than what they are worth now!Low Price-to-Rent Ratio In real estate investing, property investors use the price-to-rent ratio to determine which option makes more financial sense: buying or renting an investment property. When it comes to owning rental property, a real estate investor should look for a real estate market with a price-to-rent ratio in the range of 16-20 or more. This number indicates that it’s better to rent than to buy an investment property. As a result, in a location with a higher price-to-rent ratio, a real estate investor will have a larger pool of potential tenants looking for rental properties. This high occupancy rate will allow property investors to generate good rental income and good return on investment regardless of how much they paid for their rental properties.Related: All You Need to Know About Price to Rent Ratio as a Real Estate InvestorTop Places for Owning Rental Property in the US in 2018Here’s a countdown of the top real estate markets in 2018 for owning rental property in the United States. To create this list, we used Mashvisor’s rental property calculator to compute and analyze the different metrics that make for profitable investment properties across the US housing market. These metrics include median property price, rental income, cash on cash return, and cap rate for both traditional and Airbnb investments.So, without further ado, here are the top cities in the 2018 US housing market where any real estate investor should consider owning rental property:#5 Chicago, ILMedian Property Price: $451,462Traditional Rental Income: $1,950Airbnb Rental Income: $1,692Traditional Cash on Cash Return: 0.8%Airbnb Cash on Cash Return: 1.11%Traditional Cap Rate: 0.8%Airbnb Cap Rate: 1.11%#4 Atlanta, GAMedian Property Price: $398,018Traditional Rental Income: $1,870Airbnb Rental Income: $722Traditional Cash on Cash Return: 2.57%Airbnb Cash on Cash Return: 0.91%Traditional Cap Rate: 2.57%Airbnb Cap Rate: 0.91%#3 Memphis, TNMedian Property Price: $191,360Traditional Rental Income: $835Airbnb Rental Income: $846Traditional Cash on Cash Return: 1.67%Airbnb Cash on Cash Return: 1.95%Traditional Cap Rate: 1.67%Airbnb Cap Rate: 1.95%#2 Nashville, TNMedian Property Price: $418,571Traditional Rental Income: $1,810Airbnb Rental Income: $972Traditional Cash on Cash Return: 2.22%Airbnb Cash on Cash Return: 1.51%Traditional Cap Rate: 2.22%Airbnb Cap Rate: 1.51%#1 Napa, CAMedian Property Price: $615,000Traditional Rental Income: $2,483Airbnb Rental Income: $5,915Traditional Cash on Cash Return: 2.12%Airbnb Cash on Cash Return: 5.47%Traditional Cap Rate: 2.12%Airbnb Cap Rate: 5.47%How to Find an Investment Property in These Real Estate Markets? So now that you know the top real estate markets for owning rental property in the United States, you must be wondering how to find the best investment property in any of these markets. Don’t think too hard about this – we’ve got your back! Mashvisor is an online platform that provides property investors with the best real estate investing tools and data analysis instruments regarding traditional and Airbnb investment properties to help you make smart investment decisions for a successful real estate investing career.If you’re planning on owning rental property in one of the above-mentioned real estate markets, here’s a number of real estate investing tools that Mashvisor provides for property investors to analyze and find the best property to buy: Investment Property Finder:A powerful and heavily customizable search tool that allows you to search for rental properties based on specific criteria using different filters, such as finding rental properties of a certain price range, in a certain neighborhood, or with a certain cap rate. This will help you easily compare different investment properties in the same location to determine which one will yield a better return on investment.Investment Property Calculator:A versatile tool that allows you to calculate the different values related to an investment property. These include cash on cash return, cap rate, cash flow, and occupancy rate (for both traditional and short-term Airbnb investments). This will help you evaluate the profitability of buying and owning rental property.Heatmap Function:The heatmap function of the property finder tool allows you to find rental properties much faster using visual cues. For example, you can set the heatmap to indicate the areas with the highest cap rate, and the heatmap will highlight which areas are hot or cold for this feature. This will make it easier to compare different locations and see which one has more profitability for real estate investing.Ultimately, Mashvisor helps property investors find the most profitable rental property to own that matches their personal search criteria and real estate investing goals. Don’t waste months searching for the best location for owning rental property – with Mashvisor, all you need is 15 minutes!Sign up for Mashvisor and start finding the best and most profitable rental properties in the US real estate market! Start Your Investment Property Search! START FREE TRIAL Start Your Investment Property Search! START FREE TRIAL Atlanta GAChicago ILLocationMemphis TNNapa CANashville TN 0FacebookTwitterGoogle +PinterestLinkedin Eman HamedEman is a Content Writer at Mashvisor. With a focus on market reports, she enjoys researching the state of the real estate market in different cities across the US. 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