2023’s Top Cities Prime for Real Estate Investment

Investing can be a really scary prospect, especially if you’re trying your hand in the real estate market for the first time, but investors must weigh countless things to consider before dropping tens of thousands of dollars in a potential investment. 

However, according to Doorloop, a property management software company, their research creates a jumping-off point for investors so they have an idea of which real estate markets will more than likely be profitable, saving investors time, and therefore money. 

Looking at the raw data, Doorloop bases their findings on choosing a rental property that returns the most on their initial investment such as high rental demand, high rental income, and low tenant default rate. These three things are important to consider and will almost always give investors a profitable investment. Other factors of the housing market that affect the profitability of investment properties include population growth, job growth, and median home price. 

“Think about it,” Doorloop said. “If you have more people and more jobs, you will surely have more real estate potential. 

While Doorloop adds a disclaimer that investors should do their own research, the top three cities for investment include: 

Nashville, Tennessee: While the housing market has experienced a recent slowing, this term is relative. Even with the slight decrease in growth, Nashville is still experiencing more demand for housing than there is inventory. 

Key factors that put Nashville on the list of best real estate markets are activity, real estate market growth, growth in property values, and the strength of the local economy. 

As the capital city, it is also the most populous city in the state and has experienced immense population growth and job growth in the past few years. Median households have also grown by 6.6%, meaning there is more potential for cash flow from rental properties. 

And, if this isn't enough, experts predict a 19% growth in home prices in the next year. This is an extremely high increase and can definitely yield bountiful returns. 

Tampa, Florida: Second on Doorloop’s list of cities ripe for investment is Tampa as the median purchase price of a home is around $323,040 and the average rent price is $1,970—while these numbers are only slightly above the national average, what isn’t considered is growth, which is occurring exponentially. 

Over the past year, homes have appreciated more than 27.7%; this extreme change, especially considering the 1.4% increase in population and a 39% increase in rental prices. 

These growth rates are far above national averages and one of the key reasons why it took second place in Doorloop’s rankings. 

Austin, Texas: Over the past few years, the Austin market (and its suburbs) have really picked up as some houses have almost doubled in the last few years. It has also experienced a massive population growth, ranking first out of the major cities in America. 

In addition, many Silicon Valley firms have relocated to the Austin area—however, the city’s growth has also been fueled by movers coming for low housing prices and low median rent. 

Among positive data, Austin boasts an unemployment rate of 4.2%, lower than the national average. This, along with low inventory, high rental demand, rising prices, and a soaring jobs market has caused Austin's housing market to boom. So much so that large tech companies, like Apple, Samsung, and Tesla have chosen to either fully relocate or set up large offices in Austin. 

Click here to see more of the top cities ripe for investment.