No doubt real estate investing is one of the best ways to make money in the medium and long term. But how do real estate investors make money? Through rental income, of course. Thus, when you as a real estate investor buy an investment property, one of the first things that you should look at is what rental income your new income property is expected to generate for you.
So here comes the next important real estate investing question: How do real estate investors know how much rental income a certain investment property will generate? Well, the classical answer to this real estate investing question is by conducting a real estate market analysis and an investment property analysis to see how much rental income your rental property will most likely generate based on real estate comps from similar rental properties around. However, as you can imagine, that takes lots and lots of time and efforts. To save yourself all these time and efforts, you could alternatively make use of the newest real estate investment technologies and get yourself a rental property calculator, like the one available at Mashvisor. Mashvisor’s rental property calculator will calculate for you all major figures including the rental income, CoC return, cap rate, occupancy rate, and others, segregated by traditional and Airbnb rental strategy. This means that our rental property calculator not only helps you identify the best city, the best neighborhood, and the best investment property but also the optimal rental strategy for any particular income property.
Related: 6 Better Ways To Spend Rental Income
It is important for any real estate investor to know that rental income is determined not only by the type of investment property but also by the location where the income property is located. Some hot real estate markets are just bound to generate more rental income for their real estate investors and landlords than others. To help you in selecting the location of your next real estate investment property, here are the best places to buy for rental income according to Mashvisor’s rental property calculator. When looking at the numbers below related to the best places to buy for rental income, you should keep in mind that the CoC return and cap rate are the same because our rental property calculator assumes all payments on the investment property are made fully in cash.
Related: How to Use Mashvisor’s Rental Property Calculator
So, now’s the time to look at the best places to buy for rental income according to Mashvisor’s rental property calculator:
The 6 Best Places to Buy for Rental Income for Traditional Rental Strategy
If you are a real estate investor who prefers the traditional rental strategy, here are the best places to buy for rental income for this real estate investment strategy:
1. Warren, VT
- Median Property Price: $250,000
- Traditional Rental Income: $10,860
- Airbnb Rental Income: $1,830
- Traditional CoC Return: 10.2%
- Airbnb CoC Return: 3.0%
- Traditional Cap Rate: 10.2%
- Airbnb Cap Rate: 3.0%
- Airbnb Occupancy Rate: 24.3%
The top city among the best places to buy for rental income is Warren, VT, where a real estate investor is expected to generate the astonishing $10,860 as rental income through traditional rental strategy.
2. Longport, NJ
- Median Property Price: $699,000
- Traditional Rental Income: $10,070
- Airbnb Rental Income: –
- Traditional CoC Return: 14.1%
- Airbnb CoC Return: –
- Traditional Cap Rate: 14.1%
- Airbnb Cap Rate: –
- Airbnb Occupancy Rate: –
The second in the list of the best places to buy for rental income is Longport, NJ, where profitability is quite high for both CoC return and cap rate.
3. Westport, CN
- Median Property Price: $999,000
- Traditional Rental Income: $9,960
- Airbnb Rental Income: –
- Traditional CoC Return: 7.8%
- Airbnb CoC Return: –
- Traditional Cap Rate: 7.8%
- Airbnb Cap Rate: –
- Airbnb Occupancy Rate: –
For traditional rental strategy, Westport, CN is also among the best places to buy for rental income, but this city is quite expensive for buying an investment property, with a median property price of about $1 million.
4. Sag Harbor, NY
- Median Property Price: $1,250,000
- Traditional Rental Income: $9,740
- Airbnb Rental Income: $3,150
- Traditional CoC Return: 5.4%
- Airbnb CoC Return: 1.1%
- Traditional Cap Rate: 5.4%
- Airbnb Cap Rate: 1.1%
- Airbnb Occupancy Rate: 23.0%
Another top choice among the best places to buy for rental income for those in favor of traditional rental strategy is Sag Harbor, NY. But beware, property prices here are well beyond a million dollars, on average.
5. Hampton Bays, NY
- Median Property Price: $549,000
- Traditional Rental Income: $9,530
- Airbnb Rental Income: $2,890
- Traditional CoC Return: 16.8%
- Airbnb CoC Return: 3.1%
- Traditional Cap Rate: 16.8%
- Airbnb Cap Rate: 3.1%
- Airbnb Occupancy Rate: 22.6%
According to Mashvisor’s rental property calculator, Hampton Bays is yet another among the best places to buy for rental income. The good news is that an income property here is a bit more affordable than in the other suggested cities.
6. Cutchogue, NY
- Median Property Price: $779,000
- Traditional Rental Income: $9,160
- Airbnb Rental Income: –
- Traditional CoC Return: 10.9%
- Airbnb CoC Return: –
- Traditional Cap Rate: 10.9%
- Airbnb Cap Rate: –
- Airbnb Occupancy Rate: –
Last but not least, you could also consider an investment property in Cutchogue, NY if you are in search of the best places to buy for rental income.
The 6 Best Places to Buy for Rental Income for Airbnb Rental Strategy
For those real estate investors who like to keep up with the new real estate investing trends, following is a list of the best places to buy for rental income with Airbnb rental strategy, as calculated by Mashvisor’s rental property calculator:
1. Vienna, VA
- Median Property Price: $799,500
- Airbnb Rental Income: $8,470
- Traditional Rental Income: $3,200
- Airbnb CoC Return: 9.2%
- Traditional CoC Return: 2.4%
- Airbnb Cap Rate: 9.2%
- Traditional Cap Rate: 2.4%
- Airbnb Occupancy Rate: 23.1%
The top choice in this category is Vienna, VA, where you can make as much as $8,470 per month in the form of Airbnb rental income. Quite promising for any real estate investor, right?
2. Laie, HI
- Median Property Price: $2,399,500
- Airbnb Rental Income: $7,770
- Traditional Rental Income: $2,870
- Airbnb CoC Return: 2.4%
- Traditional CoC Return: –
- Airbnb Cap Rate: 2.4%
- Traditional Cap Rate: –
- Airbnb Occupancy Rate: 65.3%
The second in the list of the best places to buy for rental income is Laie, HI. However, if you want to invest in a real estate property in this city, you will have to be ready to pay more than $2 million.
3. Napa, CA
- Median Property Price: $779,000
- Airbnb Rental Income: $7,610
- Traditional Rental Income: $2,600
- Airbnb CoC Return: 9.4%
- Traditional CoC Return: 1.8%
- Airbnb Cap Rate: 9.4%
- Traditional Cap Rate: 1.8%
- Airbnb Occupancy Rate: 55.1%
Real estate investors looking for the best places to buy for rental income for Airbnb should also think about Napa, the first of three California cities in this ranking.
4. Sonoma, CA
- Median Property Price: $990,000
- Airbnb Rental Income: $7,580
- Traditional Rental Income: $2,580
- Airbnb CoC Return: 6.6%
- Traditional CoC Return: 0.9%
- Airbnb Cap Rate: 6.6%
- Traditional Cap Rate: 0.9%
- Airbnb Occupancy Rate: 49.6%
If you are ready to pay nearly a million for an income property in one of the best places to buy for rental income, Sonoma, CA could also be the right location for you.
5. Fairfield, CA
- Median Property Price: $475,000
- Airbnb Rental Income: $7,540
- Traditional Rental Income: $1,850
- Airbnb CoC Return: 13.4%
- Traditional CoC Return: 1.7%
- Airbnb Cap Rate: 13.4%
- Traditional Cap Rate: 1.7%
- Airbnb Occupancy Rate: 29.3%
The next in the list according to data from Mashvisor’s rental property calculator is Fairfield, CA, where profitability is really good at 13.4% for CoC return and cap rate.
6. Palestine, TX
- Median Property Price: $154,000
- Airbnb Rental Income: $7,220
- Traditional Rental Income: –
- Airbnb CoC Return: 52.9%
- Traditional CoC Return: –
- Airbnb Cap Rate: 52.9%
- Traditional Cap Rate: –
- Airbnb Occupancy Rate: 28.2%
Finally, if you are looking to purchase an Airbnb investment property in one of the best places to buy for rental income at an affordable price, think about Palestine, TX.
Related: Rental Income from Airbnb
As the figures from Mashvisor’s rental property calculator show, every investor looking for real estate investments in the best places to buy for rental income should be aware of one thing: these locations are likely to host very expensive real estate properties, which explains why the monthly rent – both traditional and Airbnb rental strategy – is also so high. Thus, when buying your next investment property, don’t pay attention to the rental income only; also look at the profitability measures of CoC return and cap rate.
