There are many location factors that influence the profitability of real estate properties. Some, like optimal rental strategy, are quite obvious, while others, like real estate amenities, are subtle. One of these subtle factors is a location’s walkability. What is walkability, why is it important, and where are the most walkable cities in the US that are affordable? This blog will provide answers to these three questions!
Related: Location, Location, Location: What Makes for the Best Place to Invest in Real Estate?
What Is Walkability?
Walkability is short for the ability to walk. It refers to a tenant’s ability to walk to nearby amenities from their rented property. Walkability is quantified through a Walk Score. The Walk Score metric ranges from 0 to 100, with 0 being unwalkable or completely car dependent and 100 not requiring a car to complete daily errands. Generally speaking, a good Walk Score begins at 70. The higher the score, the more walkable an area is.
Why Is Walkability Important?
There are many reasons why walkability is important, such as reducing fossil fuel usage and promoting a healthy lifestyle. As it pertains to real estate, however, there are two main reasons to consider. The first reason is that good walkability is needed for attracting tenants. Tenants want to have the convenience of close amenities, such as shopping centers and grocery stores, nearby. A proximity to such amenities enhances their quality of residence in a rental property. This leads to high demand for rental property and thus a justifiable increase in rental income.
Walkability impacts profitability in another way aside from a higher rental rate and overall higher demand for rental property. It also influences property values. A Redfin report, based on a sample size of over a million properties sold between January 2014 and April 2016, analyzed the correlation between walkability and property price. It found that a one-point increase in the Walk Score pushes a property’s value up by 0.9%, or an average of $3,250. Therefore, not only is walkability beneficial for attracting tenants, but it’s also helpful for attracting real estate investors.
Walkability and Affordability
Just because a city has a high Walk Score, however, does not mean it is the best place to invest in real estate. Many of the most walkable cities in the US, for instance, are also very expensive. A perfect example is San Francisco. San Fran is by far one of the most walkable cities in the US with a Walk Score of 86. The city, however, is notorious for its high property prices. Currently, San Francisco’s median property price is over $1.5 million, according to Mashvisor’s analysis. This trend is apparent in many of the other most walkable cities in the US. Boston has a Walk Score of 81 and a median property price of roughly $850,000. New York also has a Walk Score of 89, but it has a more expensive median property price of $1.1 million.
Related: Here Are the Most Affordable Real Estate Markets for 2019
6 Most Walkable Cities in the US That Are Affordable
It is clear that investors should not only consider investing in the most walkable cities in the US. They should focus on investing in walkable neighborhoods or cities that have cheap real estate. There are multiple other factors to consider when asking where to invest in real estate. This will require a neighborhood analysis and an investment property analysis. Want to get access to both analyses? Click here to learn about our product!
But back to the topic at hand. What are the most walkable cities in the US that also have affordable real estate? According to Mashvisor’s analysis, the most walkable cities in the US that have cheap real estate are Saint Paul, MN, St. Louis, MO, Buffalo, NY, Minneapolis, MN, Baltimore, MD, and Philadelphia, PA.
Saint Paul, MN- Walk Score: 59
- Median Property Price: $184,704
- Price Per Square Foot: $128
Traditional
- Rental Income: $1,103
- Cap Rate / Cash on Cash Return: 1.77%
Airbnb
- Rental Income: $2,279
- Cap Rate / Cash on Cash Return: 6.37%
- Occupancy Rate: 55%
St. Louis, MO- Walk Score: 65
- Median Property Price: $196,192
- Price Per Square Foot: $116
Traditional
- Rental Income: $1,003
- Cap Rate / Cash on Cash Return: 1.47%
Airbnb
- Rental Income: $2,139
- Cap Rate / Cash on Cash Return: 4.67%
- Occupancy Rate: 58%
Buffalo, NY- Walk Score: 68
- Median Property Price: $195,763
- Price Per Square Foot: $99
Traditional
- Rental Income: $998
- Cap Rate / Cash on Cash Return: 1.49%
Airbnb
- Rental Income: $2,549
- Cap Rate / Cash on Cash Return: 5.23%
- Occupancy Rate: 58%
Minneapolis, MN- Walk Score: 69
- Median Property Price: $347,746
- Price Per Square Foot: $208
Traditional
- Rental Income: $1,738
- Cap Rate / Cash on Cash Return: 1.47%
Airbnb
- Rental Income: $2,617
- Cap Rate / Cash on Cash Return: 3.14%
- Occupancy Rate: 58%
Baltimore, MD- Walk Score: 69
- Median Property Price: $233,291
- Price Per Square Foot: $361
Traditional
- Rental Income: $1,582
- Cap Rate / Cash on Cash Return: 3.22%
Airbnb
- Rental Income: $2,164
- Cap Rate / Cash on Cash Return: 3.47%
- Occupancy Rate: 54%
Philadelphia, PA- Walk Score: 79
- Median Property Price: $282,090
- Price Per Square Foot: $212
Traditional
- Rental Income: $1,401
- Cap Rate / Cash on Cash Return: 2.32%
Airbnb
- Rental Income: $2,128
- Cap Rate / Cash on Cash Return: 3.2%
- Occupancy Rate: 51%
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
Note: Be sure to check Airbnb regulations by city before investing with this rental strategy.
How to Find Walkable Neighborhoods to Invest In
It’s important to note that walkability differs from neighborhood to neighborhood, not only from city to city. However, with Mashvisor’s neighborhood analysis, you can find the most walkable neighborhoods in any city in the US. Just take a look below:
Overall, when deciding on the best city to buy rental property, investors should keep walkability in mind. Walkability leads to an increase in rental income, rental rate, property value, and demand for rental property. However, when searching for the most walkable cities in the US, investors should consider other factors at play and focus on cheap real estate as well.
Want to find affordable properties in the most walkable cities in the US? Then be sure to click here to start your 14-day free trial with Mashvisor! Mashvisor’s analysis will point you to the best place to invest in real estate in a matter of minutes!
Related: Mashvisor: The Best Rental Property Calculator You Can Ask For