Where to Invest in Real Estate for Affordable Investment Properties

The US housing market 2018, while booming, is making it hard for real estate investors to decide exactly where to invest in real estate this year.

While there are many great real estate markets all across the board, many of the best cities to invest in real estate for 2018 just don’t have affordable investment properties for the average real estate investor.

Attempting to find affordable investment properties that will still bring a good return on investment can be difficult and time consuming. That’s why (with the help of Mashvisor’s investment property calculator) we can show you where to invest in real estate for affordable investment properties in 2018.

Housing Prices 2018: Just What Is Going on?

Real estate news is buzzing about the housing prices and inventory in the 2018 real estate market. So, what is going on and how does it affect where to invest in real estate?

According to realtor.com, the national median house price has gone up significantly in the month of February. Based on real estate market statistics they’re seeing now, the experts over at realtor.com are saying “Home prices (are) set to reach new highs this spring”. Let’s take a look at the numbers of the national real estate market for February provided by realtor.com:

• Median House Price: $275,000
• Days on Market: 83 days
• Active Listings: 1.25 million

To get a better idea of what the real estate market is facing, review the statistics from a month before, in January:

• Median House Price: $269,500
• Days on Market: 89 days
• Active Listings: 1.23 million

Already in the first two months of the year, the median house price has risen, and it’s not stopping there.

Another factor to note is the days on market. Investment properties are being sold at a fast rate and are trending to be even faster as the year moves forward. Along with the housing inventory shortage, this spells out a seller’s market. When looking where to invest in real estate, most locations in the housing market will be unfavorable for buying investment property.

While the housing inventory did increase somewhat in February (with around 422,000 new listings across the US real estate market), it’s still 8% lower than it was this time last year. The increase hasn’t aided in lowering house prices or slowing the growth!

This information might stop some real estate investors from trying to locate where to invest in real estate for 2018 and buying investment property. They’d be missing out on making money in real estate this year. Instead, why not look for affordable investment properties that you can still get a great return on investment from? These amount to being the best real estate investments, no matter the condition of the real estate market.

To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.

Why Knowing Where to Invest in Real Estate 2018 Will Make All the Difference

Finding affordable real estate investments is one thing, but finding them in a great location for real estate investing is a whole other challenge. Cheap real estate investments or below market value investment properties can be a great deal in terms of a return on investment. However, if they are not in a good location for making money in real estate and getting a return on investment, forget about them!

The best real estate investments are both affordable and lucrative. They should have a good cash on cash return as well as a good cap rate for real estate investing. These two real estate analysis metrics depend not only on the investment property but heavily on the location in the real estate market.

When deciding where to invest in real estate for success, a real estate investor also has to choose the right real estate investment strategy that will work for the investment property and the location. Comparing the potential return on investment of Airbnb rentals to traditional, long-term rentals will help a real estate investor make this decision.

Related: 10 Most Profitable Airbnb Locations for Cash on Cash Return

Below is the list of where to invest in real estate for affordable investment properties in 2018. You’ll find not only the city but the exact neighborhood of where to invest in real estate.

Where to Invest in Real Estate 2018 for Affordable Investment Properties

Mashvisor’s investment property calculator has returned 17 locations in the US housing market that not only have a median house price below the national price but also have a cash on cash return/cap rate close to ideal for either of the real estate investment strategies.

Orlando, FL

Millenia

• Median House Price: $115,000
• Monthly Airbnb Rental Income: $2,266
• Airbnb Rental Cap Rate: 11.72%
• Airbnb Rental Cash on Cash Return: 11.72%
• Monthly Traditional Rental Income: $1,078
• Traditional Rental Cap Rate: 2.22%
• Traditional Rental Cash on Cash Return: 2.22%
• Best Real Estate Investment Strategy: Airbnb Rentals

Las Vegas, NV

Rancho Charleston

• Median House Price: $239,900
• Monthly Airbnb Rental Income: $2,575
• Airbnb Rental Cap Rate: 6.6%
• Airbnb Rental Cash on Cash Return: 6.6%
• Monthly Traditional Rental Income: $1,376
• Traditional Rental Cap Rate: 3%
• Traditional Rental Cash on Cash Return: 3%
• Best Real Estate Investment Strategy: Airbnb Rentals

Huntridge

• Median House Price: $193,250
• Monthly Airbnb Rental Income: $2,151
• Airbnb Rental Cap Rate: 7.38%
• Airbnb Rental Cash on Cash Return: 7.38%
• Monthly Traditional Rental Income: $934
• Traditional Rental Cap Rate: 1.67%
• Traditional Rental Cash on Cash Return: 1.67%
• Best Real Estate Investment Strategy: Airbnb Rentals

Winchester

• Median House Price: $225,000
• Monthly Airbnb Rental Income: $2,334
• Airbnb Rental Cap Rate: 7.55%
• Airbnb Rental Cash on Cash Return: 7.55%
• Monthly Traditional Rental Income: $1,112
• Traditional Rental Cap Rate: 2.55%
• Traditional Rental Cash on Cash Return: 2.55%
• Best Real Estate Investment Strategy: Airbnb Rentals

Michael Way

• Median House Price: $199,999
• Monthly Airbnb Rental Income: $2,151
• Airbnb Rental Cap Rate: 7.65%
• Airbnb Rental Cash on Cash Return: 7.65%
• Monthly Traditional Rental Income: $934
• Traditional Rental Cap Rate: 2.12%
• Traditional Rental Cash on Cash Return: 2.12%
• Best Real Estate Investment Strategy: Airbnb Rentals

Tampa, FL

Seminole Heights

• Median House Price: $209,000
• Monthly Airbnb Rental Income: $2,187
• Airbnb Rental Cap Rate: 6.63%
• Airbnb Rental Cash on Cash Return: 6.63%
• Monthly Traditional Rental Income: $1,082
• Traditional Rental Cap Rate: 1.61%
• Traditional Rental Cash on Cash Return: 1.61%
• Best Real Estate Investment Strategy: Airbnb Rentals

Historic Ybor

• Median House Price: $162,500
• Monthly Airbnb Rental Income: $1,910
• Airbnb Rental Cap Rate: 6.44%
• Airbnb Rental Cash on Cash Return: 6.44%
• Monthly Traditional Rental Income: $1,162
• Traditional Rental Cap Rate: 3.07%
• Traditional Rental Cash on Cash Return: 3.07%
• Best Real Estate Investment Strategy: Airbnb Rentals

Related: Top 5 Reasons to Invest in Tampa Real Estate

Kansas City, MO

Westside North

• Median House Price: $250,000
• Monthly Airbnb Rental Income: $2,426
• Airbnb Rental Cap Rate: 6.25%
• Airbnb Rental Cash on Cash Return: 6.25%
• Monthly Traditional Rental Income: $1,301
• Traditional Rental Cap Rate: 2.01%
• Traditional Rental Cash on Cash Return: 2.01%
• Best Real Estate Investment Strategy: Airbnb Rentals

Columbus, OH

Indianola Terrace

• Median House Price: $149,900
• Monthly Airbnb Rental Income: $1,352
• Airbnb Rental Cap Rate: 4.8%
• Airbnb Rental Cash on Cash Return: 4.8%
• Monthly Traditional Rental Income: $1,554
• Traditional Rental Cap Rate: 6.1%
• Traditional Rental Cash on Cash Return: 6.1%
• Best Real Estate Investment Strategy: Traditional Rentals

South Side CAN

• Median House Price: $170,000
• Monthly Airbnb Rental Income: $1,651
• Airbnb Rental Cap Rate: 6.73%
• Airbnb Rental Cash on Cash Return: 6.73%
• Monthly Traditional Rental Income: $700
• Traditional Rental Cap Rate: 0.7%
• Traditional Rental Cash on Cash Return: 0.7%
• Best Real Estate Investment Strategy: Airbnb Rentals

Southside

• Median House Price: $119,900
• Monthly Airbnb Rental Income: $1,219
• Airbnb Rental Cap Rate: 6.35%
• Airbnb Rental Cash on Cash Return: 6.35%
• Monthly Traditional Rental Income: $697
• Traditional Rental Cap Rate: 1.46%
• Traditional Rental Cash on Cash Return: 1.46%
• Best Real Estate Investment Strategy: Airbnb Rentals

Related: Now is The Time to Invest in Airbnb Columbus, Ohio

Joshua Tree, CA

• Median House Price: $199,000
• Monthly Airbnb Rental Income: $2,198
• Airbnb Rental Cap Rate: 6.78%
• Airbnb Rental Cash on Cash Return: 6.78%
• Monthly Traditional Rental Income: $991
• Traditional Rental Cap Rate: 1.71%
• Traditional Rental Cash on Cash Return: 1.71%
• Best Real Estate Investment Strategy: Airbnb Rentals

Fort Lauderdale, FL

Oak River Homeowners

• Median House Price: $259,750
• Monthly Airbnb Rental Income: $2,974
• Airbnb Rental Cap Rate: 8.33%
• Airbnb Rental Cash on Cash Return: 8.33%
• Monthly Traditional Rental Income: $1,437
• Traditional Rental Cap Rate: 2.81%
• Traditional Rental Cash on Cash Return: 2.81%
• Best Real Estate Investment Strategy: Airbnb Rentals

Baltimore, MD

Pleasant View Gardens

• Median House Price: $148,900
• Monthly Airbnb Rental Income: $1,488
• Airbnb Rental Cap Rate: 5.19%
• Airbnb Rental Cash on Cash Return: 5.19%
• Monthly Traditional Rental Income: $1,813
• Traditional Rental Cap Rate: 7.29%
• Traditional Rental Cash on Cash Return: 7.29%
• Best Real Estate Investment Strategy: Traditional Rentals

Heritage Crossing

• Median House Price: $132,500
• Monthly Airbnb Rental Income: $1,263
• Airbnb Rental Cap Rate: 4.44%
• Airbnb Rental Cash on Cash Return: 4.44%
• Monthly Traditional Rental Income: $1,507
• Traditional Rental Cap Rate: 6.21%
• Traditional Rental Cash on Cash Return: 6.21%
• Best Real Estate Investment Strategy: Traditional Rentals

Ridgely Delight

• Median House Price: $135,500
• Monthly Airbnb Rental Income: $1,789
• Airbnb Rental Cap Rate: 6.58%
• Airbnb Rental Cash on Cash Return: 6.58%
• Monthly Traditional Rental Income: $1,347
• Traditional Rental Cap Rate: 4.03%
• Traditional Rental Cash on Cash Return: 4.03%
• Best Real Estate Investment Strategy: Airbnb Rentals

Anaheim, CA

Platinum Triangle

• Median House Price: $139,500
• Monthly Traditional Rental Income: $2,257
• Traditional Rental Cap Rate: 12.25%
• Traditional Rental Cash on Cash Return: 12.25%
• Best Real Estate Investment Strategy: Traditional Rentals

Note: Cash on cash return and cap rate are equal, as investment property financing cannot be accounted for. If you want a cash on cash return unique to your investment property financing, use Mashvisor’s investment property calculator and enter in your information.

Once you’ve reviewed the list, use Mashvisor’s investment property finder to easily find an investment property in the location of your choice.

To start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here.

Now that you know where to invest in real estate for affordable investment properties, what are you waiting for? If you buy an investment property now, you’ll benefit from the rising appreciation and get a great return on investment if you choose to sell. Don’t miss out!