As a real estate investor, there are certain areas of the country that offer more investment opportunities than others. The ideal real estate investment market is one where property is undervalued, with good population growth and strong job growth. So what American cities meet this criteria? Which cities are the best for real estate investors?   That’s precisely what we’ll explore in today’s article from The Short Sale Gal, Kristine Zelazo!

What Factors Were Considered When Finding the Best Cities for Real Estate Investment Properties?

A North Carolina real estate analytics company called the Local Market Monitor recently screened 100 of the largest Metropolitan Statistical Area and Divisions — geographical designations used by the U.S. Census Bureau to delineate a core city and its surrounding suburbs. The regions selected all had a population of at least 600,000 and traits that signal a good area for investment.

Some of the traits that were evaluated were:

  • the rate of local job growth
  • the rate of local population growth; and
  • anticipated home price appreciation rate

The majority of the cities are still considered undervalued; home prices in seven of the 100 cities are a bit higher, but not so high that they’re considered risky to investors.

Which Cities Are the Best for Real Estate Investors?

The best metro area for real estate investment properties was Grand Rapids, Michigan. Along with Tampa, FL, (which came in at number 14), the Grand Rapids area saw a strong 3.1% three-year population growth rate. What’s more, Grand Rapids has a diverse economy and the region has seen a 3.9% growth in its employment rate over the past year — the highest rate  of growth amongst all 100 regions that were analyzed. Grand Rapids had many thriving industries including the medical suppliers, aerospace and advanced manufacturing industries. 

Tampa came in with a 2.6% job growth rate, in case you were curious. In fact, Tampa wasn’t the only Florida city on the list Orlando actually clenched the #2 spot, while Fort Lauderdale came in at #8, Cape Coral came in at #10 and West Palm Beach came in at #19. The average rate of home value growth ranged from 9% to 14% in these Florida cities. 

“The Florida situation surprised me,” explained Local Market Monitor President and Founder Ingo Winzer. “But in light of the national economic recovery, Florida’s rise makes a lot of sense. Because it attracts retirees, second-home buyers, and investors, the Sunshine State’s housing market is subject to more volatility than other markets. With would-be retirees and vacationers staying away during the downturn, housing prices tumbled dramatically. Since the national economy has stabilized and is growing again, the factors that prompt people to go to Florida have recovered.”

As retirees and vacationers return, they need services, in turn creating a steady stream of jobs, which leads to a steady supply of renters. In 2015 alone, Florida added nearly 250,000 jobs.

While Florida had the highest number of cities on the top 100 list, Texas came in second place. San Antonio — with an average home price of $201,000 — came in at #3. Dallas — with an average home price of $211,000 — came in at #6. And Austin — with an average home price of $281,000 — came in at #7.  Texas’ desirability amongst investors is attributed to the fact that Texas didn’t see such a pronounced recession and its local economy recovered in fairly short order. 

Noticeably absent from the top 100 list of the best places to buy real estate investment properties was California, where prices are as much as 30% overpriced at the moment according to Winzer.

Instead, consider properties in Indianapolis (which came in at #11), Seattle (which came in at #9), Nashville (which came in at #13) or Madison, Wisconsin (which came in at #17).

Click here for the full list of the best locations for real estate investors. 

Ready to Get Started in Real Estate Investing?

If you’re getting started in real estate, consider working with a real estate investing mentor like The Short Sale Gal, Kristine Zelazo. Getting started in real estate investing can be somewhat challenging,  but when done right, you can stand to make significant profits. You’ll have lots of advantages in this regard when you work with a real estate investing and short sale expert like Kristine Zelazo, better known as The Short Sale Gal.

Based in Florida, Kristine works with both buyers and sellers and she is an experienced negotiator. So if you’re an investor seeking to get started in buying short sales and need a great mentor or wish to pursue a short sale transaction for the sale of your property, turn to Kristine Zelazo, the Short Sale Gal!

To get started with selling your home, simply complete the home pre-sale form to provide Kristine with additional information on the property in question. Then, call 800.664.0616.

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