When it comes to making money in real estate investing, you obviously need to find investment properties that give a high profit and return on the money you invested. Since location is the most important factor to find a profitable investment property, successful real estate investors always look for the best places to invest in real estate.
What Makes the Best Places to Invest in Real Estate?
There are certain factors that a real estate investor has to look for in a real estate market in order to determine how profitable it is.
#1 Demand
First of all, the best places to invest in real estate have a demand for investment properties higher than the available supply. In such markets, real estate investors enjoy high occupancy rates which will further lead to a high rental income. Thus, if you’re in a real estate market with high demand, chances are you’ll find investment properties that yield a good return on investment.
Related: What Is a Good Return on Investment in the Real Estate Business?
#2 Affordable Investment Properties
You may or may not know this, but high profit comes from cheap properties. This is especially true when you’re considering the cash on cash return since it takes the amount of cash you invest into account. Thus, the cheaper the investment property, the higher cash on cash return real estate investors can expect. Consequently, the best places to invest in real estate have lower median property prices.
Did you know that Mashvisor provides an investment property finder tool? This tool allows you to find the best rental property in your city of choice based on different criteria. For example, you can filter the search results to only see investment properties within your budget and how much you can afford to invest in real estate!
If you have a free Mashvisor account, click here to use our Property Finder and find properties in a matter of minutes!
#3 Real Estate Appreciation
This is an obvious point: the higher the value of your investment property, the better returns you’ll receive. In real estate investing, appreciation means the increase of investment properties’ values over time. As a result, the best places to invest in real estate for traditional CoC return are those where you can invest for the long-term and profit from your investment property in the future.
Related: Is It OK to Invest in Real Estate Just for Appreciation?
What Is a Good Traditional Cash on Cash Return?
Real estate experts have different opinions. However, most of them agree that anything in the range of 8-12% is a good cash on cash return. Is it possible to find a rental property that generates this rate of return on investment? Absolutely. There are a number of real estate markets across the US where you can find the above characteristics and enjoy a good CoC return! Here’s a list of the 10 best places to invest in real estate 2018 in the US for a traditional cash on cash return:
Best Places to Invest in Real Estate #10 – Hampton Bays, NY
- Median Property Price: $883,681
- Traditional Rental Income: $7,723
- Traditional Cash on Cash Return: 8%
Best Places to Invest in Real Estate #9 – Longport, NJ
- Median Property Price: $609,975
- Traditional Rental Income: $8,507
- Traditional Cash on Cash Return: 8.44%
Best Places to Invest in Real Estate #8 – Hubertus, WI
- Median Property Price: $429,229
- Traditional Rental Income: $7,390
- Traditional Cash on Cash Return: 9.1%
Best Places to Invest in Real Estate #7 – E. Massapequa, NY
- Median Property Price: $259,500
- Traditional Rental Income: $3,684
- Traditional Cash on Cash Return: 9.84%
Best Places to Invest in Real Estate #6 – Slinger, WI
- Median Property Price: $346,454
- Traditional Rental Income: $5,411
- Traditional Cash on Cash Return: 10.01%
Best Places to Invest in Real Estate #5 – New York, NY
- Median Property Price: $210,703
- Traditional Rental Income: $4,816
- Traditional Cash on Cash Return: 10.03%
Best Places to Invest in Real Estate #4 – Londonderry, VT
- Median Property Price: $207,288
- Traditional Rental Income: $7,120
- Traditional Cash on Cash Return: 10.79%
Best Places to Invest in Real Estate #3 – Maypearl, TX
- Median Property Price: $220,000
- Traditional Rental Income: $2,740
- Traditional Cash on Cash Return: 10.85%
Best Places to Invest in Real Estate #2 – Princeton Township, MN
- Median Property Price: %209,900
- Traditional Rental Income: %3,462
- Cash on Cash Return: 11.56%
Best Places to Invest in Real Estate #1 – Hayden, CO
- Median Property Price: $332,175
- Traditional Rental Income: $2,100
- Traditional Cash on Cash Return: 14.5%
Click here to look for and find the best investment properties in your city and neighborhood of choice in a matter of minutes!
Where Do We Obtain Data?
In our list of the top 10 real estate markets for traditional cash on cash return, we use data from Mashvisor’s rental property calculator. Mashvisor uses both traditional and predictive analytics of cities, neighborhoods, and properties across the US. This makes its data not only easy to obtain but also highly reliable.
Related: Why You Should Consult a Rental Property Calculator First
Mashvisor’s rental property calculator further allows real estate investors to calculate the different values related to the profitability of investment properties. These values include not only traditional but also Airbnb cash on cash return, traditional and Airbnb cap rate, as well as traditional and Airbnb potential rental income. With this tool, real estate investors can analyze different investment properties in the same location in order to identify the one with the highest return on investment!
The Bottom Line
To conclude, be a smart real estate investor and base your investment decisions on what gives you the highest return on investment. If you’re looking for the best places to invest in real estate 2018 for traditional CoC return, the above markets will give you just that!
Make sure to sign up with Mashvisor to start looking for and analyzing the best investment property in any of these locations. To get access to our real estate investment tools, sign up for a 7-day free trial of Mashvisor today, followed by 15% off for life.
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