The 7 Best Cities to Invest in Rental Properties in 2018

I’m pretty sure any real estate investor is going to want to read this- we’re talking about the best cities to invest in rental properties.

Making money in real estate means making the best real estate investments. So what’s the secret formula that most successful real estate investors have behind their booming careers? We can tell you one thing for sure, knowing where to invest in real estate is definitely a key factor. Location plays a major role in the identification of a ‘good’ real estate investment. Here at Mashvisor, we know that. So we want to let you in on the best cities to invest in rental properties this year. Before we get to that though, let’s cover a couple basics any real estate investor should know.

Tools for Finding the Best Investment Properties

You should know what real estate investment tools are used to find the best cities to invest in rental properties. With Mashvisor, you won’t just know what the best is today, but you’ll know what the best is for the future too. The housing market is always fluctuating- a real estate market could be good today and bad tomorrow. Be prepared, and always be equipped with the right tools to find the best real estate investments. Do you have questions about Mashvisor? Click here to read our FAQs and learn about our tools.

The 3 main tools you should know about are:

#1. Real Estate Market Analysis:

Also known as a comparative market analysis, this is done to gain a better understanding of how much a property is worth. If you want a steady cash flow from your real estate investments, you’d make sure to do this. It’ll make sure you’re making the right investment. Here’s how it works. Let’s say you’re interested in buying a rental property. Before making this investment, you’d want to make sure you’re getting your money’s worth. To do this, you’d have to collect data about other similar rental properties which have recently been sold on the housing market. Ideally, they’d be in the same location as your potential investment. This data will allow you to compare and contrast between your property and its rental comps. You can find out the property’s potential profitability and performance.

For more on how it works, read this blog: How to Perform a Real Estate Market Analysis.

#2. Mashvisor’s Rental Property Calculator:

A rental property is an income property. Finding the best cities to invest in rental properties doesn’t cut it. You need to find the best properties in the best cities. You would be depending on this real estate investment to provide a stable income stream. That’s why this second tool is so important. It’ll digitally calculate the property’s profitability- its return on investment. It works for traditional rentals and Airbnb rentals. It calculates the cap rate, cash on cash return, cash flow, and much more.

#3. Heatmap Analysis:

Where to invest in real estate? The easiest way to finding that answer is by using a heatmap. It’s a map with visual cues and highlights on the different performance levels of certain neighborhoods. The performance and highlighted areas depend on the investment criteria you set. For example, if you’re searching for an area with a high cap rate or high occupancy rate, just let the map know and it’ll quickly light up the most promising locations in green. The heatmap analysis tool will find the top neighborhoods in the best cities to invest in rental properties depending on what you’re looking for, quickly and easily.

For more on real estate investment tools, check out these blogs:

The Best Cities to Invest in Rental Properties

The following cities have been chosen as the best cities to invest in rental properties in 2018 based on the data from Mashvisor’s investment property calculator.

Orlando, FL

Median Property Price: $343,663
Monthly Traditional Rental Income: $1,544
Traditional Cap Rate: 1.48%
Traditional Cash on Cash Return: 1.48%
Monthly Airbnb Rental Income: $1,156
Airbnb Cap Rate: 1.46%
Airbnb Cash on Cash Return: 1.46%

Orlando is a great city for investing in rental properties! According to GoBankingRates, it’s the number 1 spot to invest in. Orlando has experienced growth in population, employment, and most significantly home values (12% increase from July 2016). To search for investment properties in Orlando, click here.

Nashville, TN

Median Property Price: $428,107
Monthly Traditional Rental Income: $1,614
Traditional Cap Rate: 1.51%
Traditional Cash on Cash Return: 1.51%
Monthly Airbnb Rental Income: $2,288
Airbnb Cap Rate: 3.33%
Airbnb Cash on Cash Return: 3.33%

Nashville is on fire right now! Home values have risen 14% and there’s great employment growth. If you’re looking for great neighborhoods for rental properties, definitely check out Germantown and Melrose in Nashville. To search for investment properties in Nashville, click here.

Atlanta, GA

Median Property Price: $465,824
Monthly Traditional Rental Income: $1,793
Traditional Cap Rate: 1.82%
Traditional Cash on Cash Return: 1.82%
Monthly Airbnb Rental Income: $1,882
Airbnb Cap Rate: 2.39%
Airbnb Cash on Cash Return: 2.39%

Atlanta’s home values have increased by 9.5% and rental growth is expected to continue increasing. To search for investment properties in Atlanta, click here.

Las Vegas, NV

Median Property Price: $359,201
Monthly Traditional Rental Income: $1,286
Traditional Cap Rate: 1.47%
Traditional Cash on Cash Return: 1.47%
Monthly Airbnb Rental Income: $1,388
Airbnb Cap Rate: 2.20%
Airbnb Cash on Cash Return: 2.20%

Shocked Las Vegas made it on the list of the best cities to invest in rental properties? We’re not. Sin City’s been realizing double-digit percentage growth in home values, year-over-year. You should definitely keep your eye out for investment opportunities here. To search for investment properties in Las Vegas, click here.

Houston, TX

Median Property Price: $421,159
Monthly Traditional Rental Income: $1,819
Traditional Cap Rate: 1.34%
Traditional Cash on Cash Return: 1.34%
Monthly Airbnb Rental Income: $1,990
Airbnb Cap Rate: 1.41%
Airbnb Cash on Cash Return: 1.41%

To search for investment properties in Houston, click here.

Columbus, OH

Median Property Price: $255,303
Monthly Traditional Rental Income: $1,241
Traditional Cap Rate: 1.23%
Traditional Cash on Cash Return: 1.23%
Monthly Airbnb Rental Income: $1,455
Airbnb Cap Rate: 1.33%
Airbnb Cash on Cash Return: 1.33%

When you compare the high rental income with the low cost of the property, the price-to-rent ratio is pretty great in Columbus. That’s something any property owner would want to hear. To search for investment properties in Columbus, click here.

Joshua Tree, CA

Median Property Price: $281,319
Monthly Traditional Rental Income: $952
Traditional Cap Rate: 0.97%
Traditional Cash on Cash Return: 0.97%
Monthly Airbnb Rental Income: $2,588
Airbnb Cap Rate: 6.71%
Airbnb Cash on Cash Return: 6.71%

One of the best cities to invest in rental properties in The Golden State is definitely Joshua Tree. With an occupancy rate of 55.57% and such high Airbnb cap rates and rental incomes, investing here is definitely the right move for you! To search for investment properties in Joshua Tree, click here.

Note: Interested in the real estate market for bigger cities like New York? Read this blog: New York Housing Market 2018 Forecast – What’s the Deal?

Final Word- Best Cities to Invest in Rental Properties

These cities are listed as the best according to Mashvisor’s investment property calculator. What you should be looking for when choosing a rental property is cap rate, cash on cash return, rental income, and property price. How do these factors balance each other out? Weigh the costs with the benefits, and use reliable sources. With Mashvisor, you can quickly and easily make the best real estate investments. If you want to search for investment properties in any other location, click here. 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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