Top Locations 5 Best Rental Investment Markets for 2020 by Hamza Abdul-Samad January 8, 2020December 26, 2019 by Hamza Abdul-Samad January 8, 2020December 26, 2019 What are the three most important things when investing in real estate? You already know the answer: location, location, and location! The location of an investment property has the largest impact on its return on investment. So when considering where to invest in real estate, investors should always take a look at the best rental investment markets. What are the best rental investment markets in the US for 2020? According to the PwC’s Emerging Trends in Real Estate 2020 report, the 5 best places to invest in real estate in 2020 are: Austin, Texas Raleigh-Durham, North Carolina Nashville, Tennessee Charlotte, North Carolina Boston, Massachusetts Today, we’ll show you why you should invest in these cities. We’ll also provide the real estate data of the rental markets and their best up and coming neighborhoods. Related: Location, Location, Location – Is Location Really All in Real Estate Investing? 1. Austin, TX Median Property Price: $581,727 Price per Square Foot: $296 Price-to-Rent Ratio: 24 Traditional Rental Income: $2,032 Traditional Cap Rate / Cash on Cash Return: 0.57% Airbnb Rental Income: $3,629 Airbnb Cap Rate / Cash on Cash Return: 3.1% Airbnb Occupancy Rate: 54.7% The capital of Texas will be the best rental investment market in 2020. This ranking is an improvement from 6th place for overall real estate prospects a year ago. And real estate investors have a choice of rental strategy here as the Austin real estate market will be one of the best places to buy a vacation home and a traditional rental property. Much of the projected success of the traditional Austin housing market is due to its economy. High-paying tech jobs, in particular, are growing in the city. Apple’s planned $1 billion North Austin campus, for instance, is a clear testament to this fact. Overall, Austin has a below national-average unemployment rate of 2.7%. Its 47% ten-year job market growth forecast is also much better than the US average of 33.5%. Due to such economic success, Austin is estimated to have the highest population growth rate in the US for the next five years. The Austin real estate market’s position as #1 of the best rental investment markets wouldn’t exist without its Airbnb success. As seen from Mashvisor’s data above, Airbnb investment property is very profitable in the Austin real estate market. With cultural events and venues, such as South by Southwest, Austin draws in millions of tourists annually. So it’s no surprise that Austin is among the most profitable Airbnb locations. Fortunately, Airbnb is fully legal in the Austin real estate market. You can learn more about its Airbnb laws and regulations by clicking here. The Best Neighborhoods in Austin Where should you invest in Austin real estate 2020? According to Mashvisor’s neighborhood analysis, the best neighborhoods in the Austin housing market are Johnston Terrace and North Lamar: Johnston Terrace Median Property Price: $242,310 Price per Square Foot: $173 Price-to-Rent Ratio: 11 Traditional Rental Income: $1,814 Traditional Cap Rate / Cash on Cash Return: 3.0% Airbnb Rental Income: $4,174 Airbnb Cap Rate / Cash on Cash Return: 11.1% Airbnb Occupancy Rate: 53.7% North Lamar Median Property Price: $309,850 Price per Square Foot: $214 Price-to-Rent Ratio: 13 Traditional Rental Income: $1,980 Traditional Cap Rate / Cash on Cash Return: 2.4% Airbnb Rental Income: $3,903 Airbnb Cap Rate / Cash on Cash Return: 7.4% Airbnb Occupancy Rate: 69.4% To start looking for and analyzing the best investment properties in the Austin real estate market, click here. 2. Raleigh-Durham, NC Median Property Price: $435,043 Price per Square Foot: $178 Price-to-Rent Ratio: 24 Traditional Rental Income: $1,508 Traditional Cap Rate / Cash on Cash Return: 1.2% The Raleigh-Durham real estate market is second among the best rental investment markets for 2020. While it is second overall, it is the top rental market for homebuilding prospects, according to the PwC report. This is expected to help cool the current seller’s market and meet the high demand for property for sale as the year continues. The metro’s booming tech industry, behind only Silicon Valley and San Francisco, will continue to play a large role in the demand for rental property. The most in-demand type of income property is multifamily properties. While the area’s traditional market is among the best places for buying rental property, the same cannot be said of its Airbnb market. Non-owner occupied properties are illegal for Airbnb real estate investing in the Raleigh-Durham housing market. Still, investors who rent out traditionally will enjoy a high return on investment through the metro’s rental income and real estate appreciation rates. Both the Raleigh and Durham rental markets are projected to have among the highest appreciation rates in 2020. According to Zillow, properties in the Raleigh real estate market will appreciate by 4% in 2020. Durham house prices are expected to increase by 4.4%. Related: 5 Best Cities for Real Estate Appreciation in 2020 The Best Neighborhoods in Raleigh/Durham Raleigh and Durham deserve their spot among the best rental investment markets for 2020. But where should you invest in these markets? The best neighborhood for owning a rental property in Raleigh is North Central. For Durham, Mashvisor’s real estate heatmap lists Rockwood as the top neighborhood. Raleigh – North Central Median Property Price: $414,844 Price per Square Foot: $280 Price-to-Rent Ratio: 18 Traditional Rental Income: $1,942 Traditional Cap Rate / Cash on Cash Return: 2.0% Durham – Rockwood Median Property Price: $154,125 Price per Square Foot: $122 Price-to-Rent Ratio: 8 Traditional Rental Income: $1,566 Traditional Cap Rate / Cash on Cash Return: 6.7% To start looking for and analyzing the best investment properties in the Raleigh-Durham real estate market, click here. 3. Nashville, TN Median Property Price: $450,006 Price per Square Foot: $1,183 Price-to-Rent Ratio: 21 Traditional Rental Income: $1,757 Traditional Cap Rate / Cash on Cash Return: 1.8% Airbnb Rental Income: $3,364 Airbnb Cap Rate / Cash on Cash Return: 4.6% Airbnb Occupancy Rate: 56.4% Nashville, Tennessee is next up on the list. With a jump from 5th to 3rd in overall real estate prospects, the Nashville real estate market is projected to continue its success in 2020. Strong investor demand, high homebuilding prospects, and strong development and redevelopment opportunities are among the highlights of the Nashville housing market. The city also boasts a very strong economy. Its unemployment rate is 2.7%, which is 1.2% lower than the US average. Its job market is expected to grow by a whopping 48.3% in the next 10 years. As one of the best rental investment markets, profitable long-term rental properties aren’t all Nashville real estate has to offer. Airbnb is legalized in the Nashville real estate market, which you can learn more about here. The catch is that licenses for new Airbnb non-owner occupied properties can only be issued in non-residential zones. Owner-occupied rentals are allowed everywhere in the city which means if you are a local real estate investor, you can try house hacking. The Best Neighborhoods in Nashville With positive real estate data and trends, the Nashville housing market belongs among the best rental investment markets. Where should you invest in the city? For 2020, Mashvisor’s predictive analytics rank Belair and Kenilworth Estates as Nashville’s best neighborhoods. Belair Median Property Price: $231,000 Price per Square Foot: $169 Price-to-Rent Ratio: 12 Traditional Rental Income: $1,586 Traditional Cap Rate / Cash on Cash Return: 3.6% Airbnb Rental Income: $4,765 Airbnb Cap Rate / Cash on Cash Return: 15.7% Airbnb Occupancy Rate: 47% Kenilworth Estates Median Property Price: $89,900 Price per Square Foot: $140 Price-to-Rent Ratio: 8 Traditional Rental Income: $930 Traditional Cap Rate / Cash on Cash Return: 4.5% Airbnb Rental Income: $1,891 Airbnb Cap Rate / Cash on Cash Return: 9.4% Airbnb Occupancy Rate: 54.9% To start looking for and analyzing the best investment properties in the Nashville real estate market, click here. 4. Charlotte, NC Median Property Price: $401,170 Price per Square Foot: $195 Price-to-Rent Ratio: 21 Traditional Rental Income: $1,566 Traditional Cap Rate / Cash on Cash Return: 1.3% Airbnb Rental Income: $2,241 Airbnb Cap Rate / Cash on Cash Return: 2.4% Airbnb Occupancy Rate: 53.8% The North Carolina real estate market is home to many of the best rental investment markets 2020. Besides Raleigh-Durham, the Charlotte real estate market is an excellent market for traditional real estate investing. Charlotte has an advantage over the metro area, however, as it is also one of the best vacation rental investment markets. Charlotte is right behind Raleigh-Durham in homebuilding prospects, ranking second overall in the PwC report. The Charlotte housing market 2020 will also generate strong investor demand and development and redevelopment opportunities. Even with the high demand, Charlotte home prices will be relatively affordable. According to Mashvisor’s real estate market analysis, the Charlotte real estate market has the cheapest median property price of the best rental investment markets. However, as one of the top up and coming cities, Charlotte’s house prices will increase in 2020. According to Zillow, properties in the Charlotte real estate market will appreciate by 5% in 2020. This is the highest appreciation rate among the best rental investment markets. Charlotte real estate investors will also benefit from Airbnb real estate investing as Airbnb is legal in the Charlotte real estate market. You can learn more about Charlotte’s Airbnb laws on the Airbnb Help Page. The Best Neighborhoods in Charlotte Where should you invest in the Charlotte rental market? According to Mashvisor, Idlewild South and Sugaw Creek-Ritch Ave are the best neighborhoods in the city for 2020. Idlewild South Median Property Price: $187,975 Price per Square Foot: $131 Price-to-Rent Ratio: 13 Traditional Rental Income: $1,191 Traditional Cap Rate / Cash on Cash Return: 2.5% Airbnb Rental Income: $2,896 Airbnb Cap Rate / Cash on Cash Return: 8.8% Airbnb Occupancy Rate: 63.9% Sugaw Creek-Ritch Ave Median Property Price: $146,200 Price per Square Foot: $107 Price-to-Rent Ratio: 11 Traditional Rental Income: $1,116 Traditional Cap Rate / Cash on Cash Return: 3.2% Airbnb Rental Income: $1,985 Airbnb Cap Rate / Cash on Cash Return: 7.1% Airbnb Occupancy Rate: 44.7% To start looking for and analyzing the best investment properties in the Charlotte real estate market, click here. 5. Boston, MA Median Property Price: $972,783 Price per Square Foot: $738 Price-to-Rent Ratio: 29 Traditional Rental Income: $2,795 Traditional Cap Rate / Cash on Cash Return: 0.56% The fifth entry of the best rental investment markets is Boston, Massachusetts. As the other markets on this list, the traditional Boston real estate market is thriving. Boston’s strong economy has a major positive impact on its traditional rental market. According to the PwC report, Boston has the sixth highest GDP per capita in the US. Demand is another key player in the Boston real estate market. Boston was second place for projected investor demand. Only the Austin housing market will have a higher demand. However, the market’s high development and redevelopment opportunities will help to meet the demand for property. Boston is the only cool buyer’s market among the best housing markets for 2020, according to Zillow. You may have noticed that we did not include data on Airbnb Boston. Unfortunately, non-owner occupied rentals are illegal in the Boston housing market. Related: Will the 2020 US Housing Market Be a Seller’s Market or a Buyer’s Market? The Best Neighborhoods in Boston The Boston housing market is home to many up and coming neighborhoods. Which ones are the best? According to Mashvisor’s real estate heatmap, Boston’s best neighborhoods are Mattapan and West End. Mattapan Median Property Price: $341,832 Price per Square Foot: $211 Price-to-Rent Ratio: 14 Traditional Rental Income: $2,090 Traditional Cap Rate / Cash on Cash Return: 2.8% West End Median Property Price: $606,981 Price per Square Foot: $635 Price-to-Rent Ratio: 17 Traditional Rental Income: $3,059 Traditional Cap Rate / Cash on Cash Return: 1.6% To start looking for and analyzing the best investment properties in the Boston real estate market, click here. The Bottom Line Real estate investing is all about location. By investing in the best rental investment markets, real estate investors will achieve the highest return on investment in 2020. Want to invest in these cities for 2020? To start searching for investment properties for sale, CLICK HERE to start your 14-day FREE trial with Mashvisor! Start Your Investment Property Search! START FREE TRIAL Austin TXBoston MACharlotte NCNashville TNRaleigh NC 1 FacebookTwitterGoogle +PinterestLinkedin Hamza Abdul-Samad Hamza is a long-time writer at Mashvisor. With a focus on real estate investing tips, concepts, and top investing locations, he aims to help all aspiring investors who come across his blogs to hit the bank with their investment property. Previous Post 11 Rental Investing Tips for Beginners in 2020 Next Post US Housing Supply Hits 2-Year Low & Prices Rise Related Posts What Are the Best Cities for Florida Airbnb Income in 2022? San Antonio Houses for Sale: Good Real Estate Investment in 2019? 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