When you are looking for the best cities to buy investment real estate in 2016, you most certainly shouldn’t overlook the most important aspect of real estate investing – WHO is the team that is helping you find, renovate, and manage those properties? No matter how good the market is, your investment won’t be successful if you haven’t surrounded yourself with the right people to help you manage it. And this rule applies no matter how active of an investor, or passive of an investor, you are. Don’t forget it!
That being said, obviously the cities that you choose to invest in will have a big impact on how successful your investments are as well, and hopefully this article will help you make the right choice!
We went through the most well-known cities for turnkey real estate investing, and then ranked them based on the following factors:
- The Ratio of Median Home Price to Market Rents (using data from Zillow)
- Strength of the Local Economy (using Nov 2015 Unemployment Rates)
- Potential for Future Home Price Appreciation (Using Population Growth from 2000-2013, Home Price Appreciation from 2013-2015, and the Zillow Market Temperature.
And here is what the data said:
#1 – Jacksonville, FL
- Ratio of Median Home Price To Market Rents: 10.38%
- Unemployment Rate: 4.7%
- Population Growth from 2000-2013: 24.13%
- Home Price Appreciation from 2013-2015: 15.39%
- Zillow Market Temperature: Very Hot
#2 – Orlando, FL
- Ratio of Median Home Price To Market Rents: 10.05%
- Unemployment Rate: 4.5%
- Population Growth from 2000-2013: 37.81%
- Home Price Appreciation from 2013-2015: 22.31%
- Zillow Market Temperature: Warm
#3 – Nashville, TN
- Ratio of Median Home Price To Market Rents: 9.29%
- Unemployment Rate: 4.3%
- Population Growth from 2000-2013: 33.92%
- Home Price Appreciation from 2013-2015: 22.37%
- Zillow Market Temperature: Warm
#4 – Cleveland, OH
- Ratio of Median Home Price To Market Rents: 20.5%
- Unemployment Rate: 3.7%
- Population Growth from 2000-2013: -3.88%
- Home Price Appreciation from 2013-2015: -6.37%
- Zillow Market Temperature: Very Hot
#5 – Atlanta, GA
- Ratio of Median Home Price To Market Rents: 9.35%
- Unemployment Rate: 5.0%
- Population Growth from 2000-2013: 29.99%
- Home Price Appreciation from 2013-2015: 25.63%
- Zillow Market Temperature: Warm
#6 – Tampa, FL
- Ratio of Median Home Price To Market Rents: 10.01%
- Unemployment Rate: 4.6%
- Population Growth from 2000-2013: 19.78%
- Home Price Appreciation from 2013-2015: 18.46%
- Zillow Market Temperature: Cool
#7 – Kansas City, MO
- Ratio of Median Home Price To Market Rents: 11.08%
- Unemployment Rate: 3.9%
- Population Growth from 2000-2013: 11.9%
- Home Price Appreciation from 2013-2015: -1.1%
- Zillow Market Temperature: Warm
#8 – Houston, TX (although you might want to be wary of this one with the recent drop in oil prices)
- Ratio of Median Home Price To Market Rents: 11.80%
- Unemployment Rate: 4.9%
- Population Growth from 2000-2013: 33.88%
- Home Price Appreciation from 2013-2015: 6.37%
- Zillow Market Temperature: Cool
#9 – Indianapolis, IN
- Ratio of Median Home Price To Market Rents: 10.53%
- Unemployment Rate: 4.2%
- Population Growth from 2000-2013: 28.07%
- Home Price Appreciation from 2013-2015: -3.15%
- Zillow Market Temperature: Cool
#10 – Birmingham, AL
- Ratio of Median Home Price To Market Rents: 14.37%
- Unemployment Rate: 5.2%
- Population Growth from 2000-2013: 8.37%
- Home Price Appreciation from 2013-2015: -3.19%
- Zillow Market Temperature: Warm
Jacksonville tops our list as the best city for real estate investment 2016.
