Investing in real estate can be a challenging process. Investors have countless aspects to consider and can spend thousands comparing potential investments. Today we are going to skip the grunt work and dive into the best real estate markets going into 2024.
What to Look for in a Rental Market
Regardless of where you’re looking to invest, the principles of real estate will remain similar. Regardless, investors want to choose a rental property that returns the most on the initial investment.
So how can you maximize your returns on a real estate investment? Here are a few things to consider:
- High rental demand
- High rental income
- Low tenant default rate
These factors are all extremely important to consider and once analyzed properly, will almost always get you a positive return on investment. There are also outside factors to take into consideration as well:
- Population growth
- Job growth
- Median home price
Now that we’ve touched on the factors to consider, let’s dive into the best housing markets for 2024.
Best Cities to Buy Real Estate in 2024
Please note there is no particular order to this list and ensure to do your own research before investing in real estate.
Tampa, FL
The median purchase price of a home in Tampa is approximately $323,000. The average rent price is just under $2,000. Although these are only slightly above the national average, what stands out about Tampa is its growth.
Over the last year, there has been approximately 27.7% increase in home prices, which is an extreme rise considering the 1.4% increase in population. Rental prices in Tampa have also seen a 39% rise in cost.
These growth rates far surpass the national averages, making it a great location to invest in property in the coming year.
Austin, TX
The real estate market in Austin has picked up tremendously over the last 10 years with some house prices as much as doubling. At the same time, it has experienced a large population growth, ranking first out of any major city in the U.S.
In addition to this, growth has been fueled by companies relocating to Austin from the more costly Silicon Valley as well as movers looking to capitalize on the low housing prices and median rent.
The unemployment rate in Austin, comes in at a measly 4.2% which is much lower than the national average. This, coupled with other factors such as low inventory, high rental demand, rising house prices and a thriving job market has caused Austin’s housing market to boom.
Las Vegas Nevada
Next on our list is Las Vegas, Nevada. Homes in Las Vegas have appreciated around 75% over the past five years, far surpassing the national average.
The rental market is also something to keep an eye on in Las Vegas. With higher rent to income ratios and relatively low vacancy the rental outlook is extremely promising. The number of businesses in Las Vegas has also increased along with the home value and rental market.
All together, this makes Vegas a hot market to watch.
Phoenix, AZ
Phoenix is the fifth- largest city in the United States and has one of the fastest-growing economies in the entire country. They also have a growing housing market as well as population.
The biggest factor to take into consideration in Phoenix is the massive appreciation in home value. With a home price appreciation of 81%, phoenix is a great option for any investor.
Phoenix is also one of the most affordable major cities. The median home price is only $269,175, making the Phoenix market is not only affordable, but rapidly growing. It’s low cost of living, reasonably priced housing, large available workforce and stable climate keeps Phoenix’s economy strong and housing market on the rise.
Orlando, FL
Orlando is known for its large tourist industry such as Disney World and Universal Studios, however, the greater Orlando area is reportedly welcoming over 1,000 new residents every single week.
The good news here for real estate investors is that 55% of these new residents are renting their homes. This means Orlando’s rental market is poised for large growth, likely surpassing its current rapid rise.
Orlando’s home prices have also been skyrocketing in the past years. The year over year change in Orlando’s home price was 18.7% with another 15.8% set for 2024. These numbers, coupled with increasing population both contribute to Orlando ranking as #2 in Forbe’s fastest growing cities in America.
Denver, CO
The last on our list is Denver, Colorado which is another rapidly growing area which has seen an increase in population, cost of living as well as rent prices. Denver is also a great market for investors as 51% if homes in Denver are renter occupied.
The rental market has seen a steady and consistent growth in the past few years, driven by a soaring economy as well as an increase in job growth. Tourism in Denver is also high which drives strong returns, especially in the holiday rental market.
Denver also hosts an incredibly low unemployment rate of 3%, well below the national average. It was named the best place to live in the United States in 2016 and has been in the top 10% national for real estate appreciation. All of this makes Denver an extremely promising rental market.
Key Takeaway
There are many cities throughout the U.S. that are poised to be great investments in 2024. It is extremely important to do your own do diligence and research when looking to invest, but this guide is a great way to start looking at your options for 2024.
