Buying a Rental Property? Invest in the Best Cities to Live In

If you want your future rental property investment to make you a lot of money, you should consider investing in some of the best cities to live in!

Naturally, a city labeled as one of the best cities to live in is going to draw a lot of people. This can mean higher demand for your rental property. Higher demand will lead to higher rental rates as well as high property prices in the long run.

We took a look at this list for the best places to live in and analyzed the cities on the list in terms of their real estate markets and the kind of ROI an investor can get there. We narrowed down the 10 most desirable places to live in the US to 4 great real estate markets. Check them out!

Austin, Texas

Central Texas real estate is where you should be. The real estate market is driven by the thriving economy, new jobs, and new business ventures in the area. Additionally, the steady population growth and affordable home values are increasing real estate investment activity in the Austin real estate market.

According to Rentcafe.com, the Austin real estate market has more renters than property owners, with 51.3% of Austin residents renting instead of buying! This means investing in Austin real estate is a gold mine for real estate investors and especially those considering buying a rental property.

Interesting real estate stats that you should know for the Austin real estate market:

  • Median property price: $509,899
  • Airbnb rental income: $2,956
  • Airbnb cash on cash return and cap rate: 1.85%
  • Traditional rental income: $1,909
  • Traditional cash on cash return and cap rate: 1.72%

Other facts that real estate investors should know about:

  • Cost of living index: 117.4
  • Annual job growth rate: 3.1%
  • Annual population growth rate: 1.6%
  • Median household income: $55,216

The Austin real estate market offers great investment opportunities for buying a rental property and specifically, short-term rentals due to the high Airbnb rental income and flexible short-term rental regulations.

Check out the top performing investment properties here.

Colorado Springs, Colorado

Another buyer’s market is forming in Colorado Springs. According to Peakdream.com, the Colorado Springs real estate market is offering more inventory with a drop in the median sales price of approximately $14,000. Interestingly enough, the city of Colorado Springs offers just as much of buyer’s demand to meet the inventory and sales values. Meanwhile, this combination of events in the Colorado Springs real estate market is allowing for negotiations and choices.

Colorado Springs real estate market stats:

  • Median property price: $379,914
  • Airbnb rental income: $2,640
  • Airbnb cash on cash return and cap rate: 4.03%
  • Traditional rental income: $1,445
  • Traditional cash on cash return and cap rate: 1.64%

Other facts that Colorado real estate investors should know about:

  • Cost of living index: 112.9
  • Annual job growth rate: 2.9%
  • Annual population growth rate: 1.52%
  • Median Household income: $54,228

Start looking for Colorado Springs real estate right now. Click here to get started.

Des Moines, Iowa

Des Moines may not be your go-to option when thinking of the best cities for living in or buying a rental property. However, the Des Moines metro is thriving, and demand is on a steadily increasing slope.

New construction in the Des Moines real estate market is supplying the buyer’s market with more inventory. With an average unemployment rate of 4.4% that’s below the US average, it’s definitely a great place for buying a rental property.

Despite the fact that international real estate investors are not showing interest in the Des Moines housing market or most Midwest real estate cities, out-of-state real estate investors from New York, California, and even Colorado are showing interest in Des Moines real estate. Additionally, apartment rental rates are flying off the roof! This can be attributed to the increasing demand for rental properties from millennials postponing homeownership and empty nesters looking for flexibility. Additionally, Drake University and Des Moines University are creating job opportunities in the area as well as student housing demands. Great news for the Iowa real estate investor!

It comes as no surprise that Des Moines Is One of the Best Places to Buy Vacation Home Rentals as well. Just take a look at the numbers below:

Des Moines real estate market stats 2018:

  • Median property price: $127,632
  • Airbnb rental income: $2,050
  • Airbnb cash on cash return and cap rate: 6.4%

Facts you should know about Des Moines:

  • Cost of living index: 85.9
  • Annual population growth rate: 2%
  • Median household income: $65,702

The affordable investment property prices and a low cost of living index combined with the flexible Airbnb laws and regulations in the great Des Moines area make a suitable atmosphere for real estate investors who are looking to invest in short-term rentals or vacation home rentals.

Check out top performing investment properties in Des Moines here.

Minneapolis, Minnesota

For Minneapolis real estate, experts believe that the dominant seller’s market is going to persist until 2020. The city is currently experiencing low inventory combined with fast-paced selling transactions with an average days-on-market of 58!

Minneapolis is among the best places for living and buying a rental property in the last quarter of 2018 and from looking at Mashvisor’s analytical data, it’s going to dominate 2019 as well.

Buying a rental property in Minneapolis ensures real estate investors positive cash flow income properties in addition to the outstanding real estate appreciation rates. Additionally, over the past few years, Minneapolis has witnessed a 2.4% increase in the renting population which led to it reaching 52.9%. With such a demanding and diverse tenant pool, a rental property in Minneapolis may just be the perfect investment for any type of real estate investor!

Minneapolis real estate market stats 2018

  • Median property price: $358,341
  • Airbnb rental income: $2,641
  • Airbnb cash on cash return and cap rate: 2.82%
  • Traditional rental income: $1,746
  • Traditional cash on cash return and cap rate: 1.25%

Check out top performing investment properties here.

Other facts that Minneapolis real estate investors should know about:

  • Cost of living index: 116.4
  • Annual population growth rate: 1.61%
  • Median household income: $65,599

Related: Should a Minneapolis Investment Property Be Your Next Purchase?

These were 4 of our top picks of cities for buying a rental property that also happen to be great places to live in the US housing market.

The analytics and statistical figures provided by Mashvisor can be a great shining star for those looking for the best real estate investments. To start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here.

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