If you have around $200,000 lying around and you would like to invest it, then your best bet is to invest in real estate. But, exactly where to invest 200k now for income and make a good return on investment?
To answer this question, I went through real estate data for hundreds of different cities across the U.S, focusing on cities with great investment opportunities that are available at around $200k.
In this article, you will find two types of data:
1- State-wide data from Zillow’s 2020 report which includes the size of property you would get for $200k, the typical size of a home in the state, and the median home value in that state.
2- City-specific data from Mashvisor’s 2021 reports:
- 2021 Cash on Cash Return by City – based on property type
- 2021 Cap Rate by City-based on rental strategy
Based on this data, I identified the cities with obvious as well as not-so-obvious investment opportunities that allow you to invest $200k and make a profit on your investment.
So, without further ado, let’s jump into the list of the best 7 cities to invest $200k in:
Where to Invest 200k? Invest in These Markets
Before getting into the data, you will notice that some of the states listed below have median home values that are above the 200k mark. However, there are cities within these states where the median property price is lower than the state’s median.
Additionally, in some cities, you can only find median property prices that are around below $200,000 when looking at specific property types.
I made sure to explain the reasoning behind the inclusion of each city on the list, whilst also including all the relevant data that you need to know about each city’s real estate market in general.
Where to Invest 200k in Virginia?
Typical Size of a $200k home: 1,576 sq. feet
Size of a typical home in Virginia: 1,891 sq. feet
Median home value: $286,379
Median household income: $72,577
Rooms in a typical home: 6 rooms
If you’re asking “what should I do with 200k in Virginia?”, you can buy a 1,576 sq. feet house, which ranks it as the 16th smallest size of the house that you can buy for that amount of money, according to Zillow’s data. However, that doesn’t mean that there aren’t some great investment opportunities to be found in Virginia, and specifically in Portsmouth:
Portsmouth, VA: –
Traditional CoC: 4.77%
Traditional Rental Income: $1,345
Airbnb CoC: 6.05%
Airbnb Rental Income: $2,469
Median Property Price: $213,569
Price to Rent Ratio: 13
As you can see from this data, which is based on Mashvisor’s Investment Property Analysis Report for 2021, for a median price slightly above the $200k mark, you can buy properties that have the potential Cash on Cash Return of 6.05% if opting for a short-term Airbnb-style rental.
Additionally, when looking at specific types of real estate like single-family homes and multifamily homes, we find that Portsmouth ranks 2nd and 4th highest respectively in terms of cap rate for traditional long-term rentals, amounting to 4.82% for single-family homes and 5.31% for multifamily homes when compared to the top 100 cities in the U.S in these respective categories.
This makes Portsmouth a favorable pick when it comes to investing in income property in Virginia, and it is flexible enough to allow you to rent out short-term or long-term while generating a high return on investment.
Where to Invest 200k in South Carolina?
Typical Size of a $200k home: 1,989 sq. feet
Size of a typical home in South Carolina: 1,802 sq. feet
Median home value: $188,004
Median household income: $52,306
Rooms in a typical home: 5.6 rooms
According to Zillow’s data, the median home value in South Carolina is relatively cheap (ranks 16th lowest compared to other states), and you should be able to easily find a good pick to buy for $200k. Additionally, the size of home you would get for that amount ranks 9th highest compared to other states.
In terms of investment opportunities in South Carolina, I picked the city of Sumter:
Sumter, SC: –
Traditional CoC: 4.36%
Traditional Rental Income: $1,119
Median Property Price: $199,688
Price to Rent Ratio: 15
The median property price in Sumter is above the state’s average, but it hovers around your target price of $200,000, which is a pretty good price for a 4.36% projected Cash on Cash Return – ranking it as the 3rd highest average city in terms of traditional rental CoC compared to other cities in the U.S.
However, that does limit your rental strategy, as short-term rentals don’t perform as well in Sumter, and it did not make it into the top 100 list of short-term rentals return on investment.
Where to Invest 200k in New York?
Typical Size of a $200k home: 1,739 sq. feet
Size of a typical home in New York: 1,692 sq. feet
Median home value: $327,569
Median household income: $67,844
Rooms in a typical home: 5 rooms
The median home value in the state of New York is way above the target budget of 200k. In fact, based on Zillow’s data, it ranks as the 9th highest across the entire U.S. Additionally, with 5 rooms per typical home, New York ranks as the 3rd lowest.
This, however, doesn’t mean that there are no viable options in New York. So, if you’re asking yourself what to do with 200 dollars, try investing them in Buffalo:
Buffalo, NY: –
Traditional Cap Rate: 3.90%
Traditional CoC: 3.90%
Traditional Rental Income: $1,043
Median Property Price: $200,985
Price to Rent Ratio: 16
As you can see, based on our data in Mashvisor, Buffalo has a median property price of $200,985 and ranks 3rd highest in terms of traditional cap rates when looking at all types of properties – compared to other cities in the U.S.
When looking at multifamily homes in particular, Buffalo ranks 12th highest in terms of traditional rentals cap rate, with an average of 4.54%.
This means that investing in a rental multifamily home in Buffalo is a great way to invest around $200 and expect high returns.
Where to Invest 200k in Wisconsin?
Typical Size of a $200k home: 1,780 sq. feet
Size of a typical home in Wisconsin: 1,700 sq. feet
Median home value: $202,559
Median household income: $60,773
Rooms in a typical home: 5.6 rooms
For $200k, Wisconsin should be a very affordable choice with plenty of options to choose from as it stands at the 18th from the bottom when it comes to the median home value of properties per state – based on Zillow’s data.
When it comes to the best options to choose from in terms of cities, I chose Milwaukee:
Milwaukee, WI: –
Traditional CoC: 3.43%
Traditional Rental Income: $1,059
Median Property Price: $201,431
Price to Rent Ratio: 16
While the numbers seem modest, Milwaukee ranks as the 16th highest in terms of average cap rates for traditional rentals compared to other cities in the U.S.
And when looking at single-family homes in specific, we find that Milwaukee ranks as the 9th highest in terms of average cap rates, which sits at 3.67%, compared to a median price of $193,314 for this type of property.
This makes it a very affordable place to invest $200k in with a modest yet stable return on investment.
Where to Invest 200k in Ohio?
Typical Size of a $200k home: 1,955 sq. feet
Size of a typical home in Ohio: 1,577 sq. feet
Median home value: $151,382
Median household income: $56,111
Rooms in a typical home: 5.9 rooms
Ohio is a very interesting state which gets neglected a lot when talking about real estate investing.
While the median home value ranks as the 7th lowest compared to other states, the small size of the typical home in Ohio (which ranks 5th smallest) means that for $200k you can buy a pretty sizeable house comparatively.
Similarly, I picked an odd and interesting choice when it comes to best cities for investing in Ohio:
Canton, OH: –
Airbnb CoC: 6.06%
Airbnb Daily Rate: $106
Airbnb Occupancy Rate: 54%
Airbnb Rental Income: $2,965
Median Property Price: $200,989
As you can see, based on Mashvisor’s data, the city of Canton in Ohio has an exceptionally high Cash on Cash Return when it comes to short-term / Airbnb rental properties.
For a median property price of $200,989, you can find properties that can generate around $2,965 in monthly rental income.
This means that Canton sits in 4th place when it comes to Airbnb CoC compared to other cities across the U.S.
Where to Invest 200k in Missouri?
Typical Size of a $200k home: 1,714 sq. feet
Size of typical home in Missouri: 1,534 sq. feet
Median home value: $163,999
Median household income: $54,478
Rooms in a typical home: 5.6 rooms
Similar to Ohio, the average size of a typical home in Missouri is pretty small – ranking 4th smallest compared to other states.
However, compared to Ohio, the size of home you would get for $200k is also smaller, yet the median home value is higher.
So, what makes Missouri a good choice to invest in? The city of Independence:
Independence, MO: –
Airbnb CoC: 5.99%
Airbnb Daily Rate: $107
Airbnb Occupancy Rate: 61%
Airbnb Rental Income: $1,697
Median Property Price: $192,067
Based on our data, Independence has an amazing potential when it comes to short-term rentals.
While the average Airbnb CoC in Independence sits in 6th place compared to other cities, making it sit at a lower position than our previous city, the median property price in the city of Independence is lower, and the occupancy is considerably higher.
While Airbnb rentals don’t generate as much rental income in Independence, the high occupancy rate makes it a less risky choice and it offers a steadier stream of income.
Read: What is a Good Airbnb Occupancy Rate?
Where to Invest 200k in Texas?
Typical Size of a $200k home: 1,971 sq. feet
Size of typical home in Texas: 1,928 sq. feet
Median home value: $209,048
Median household income: $60,629
Rooms in a typical home: 5.4 rooms
Of course, this wouldn’t be a real estate list if the Texas housing market wasn’t on it.
With a median home value of $209,048, Texas is still an affordable market in 2021 (although it won’t be for long considering the current trends).
What’s more is that the typical home in Texas is pretty sizeable, as it has the 6th largest size of a typical home compared to other states.
This means that the size of home you would get for $200k is also pretty big – 12th largest compared to other states.
So, where in Texas should you invest?
Houston, TX: –
Traditional CoC: 2.66%
Traditional Rental Income: $1,814
Median Property Price: $407,186
Price to Rent Ratio: 19
While the median property price in Houston might scare most buyers away as it more than doubles the target budget of $200k if you look closely at Mashvisor’s data you will find a couple of niche markets within Houston that have amazing potential for investing and a much lower price range.
Specifically, if you want to invest $200k in Houston, then you should be looking at condos, apartments, and townhouses.
When it comes to townhouses, Houston ranks 1st in terms of average cap rates for long-term renting, and it ranks 3rd when it comes to condos and apartments.
But more importantly, these types of properties have a median property price of $192,840, which is way lower than the median property price of single-family homes and other types of properties.
All of this makes Houston, TX, one of the most lucrative and sound choices when it comes to investing $200k for income in real estate.
So, now what?
Now that you know where to invest 200k, let’s get you started on the process immediately!
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