How did some of the wealthiest people in the country become billionaires? Some founded tech companies. About 90% of billionaires built wealth through real estate investments.
You might not want to make a billion dollars in real estate. You might have other goals, like preparing for retirement, or financial freedom.
If you want to be a success, you need to know the best markets for real estate investing. The location is just as important as the type of property and the price.
For the last 10 years, everyone raved about places like Portland, and Austin which were touted as the best places to live and invest. Those cities experienced population growth and severe growing pains.
Those real estate markets had their days, but what are the cities waiting in the wings for real estate investors?
Read on to learn the best markets for real estate investments and learn some of the top real estate investing tips.
- 1 1. San Antonio
- 2 2. Charlotte
- 3 3. Las Vegas
- 4 4. Miami
- 5 5. Manhattan
- 6 6. Pittsburgh
- 7 7. Lehigh Valley
1. San Antonio
Rental properties are a smart investment in San Antonio. The rental market is stable, even during the pandemic. Like many other cities, San Antonio does have a tight home market because of low inventory.
The economy is robust and diverse, so you don’t have to rely on the tourism sector to make money. There is healthcare, defense, financial, and oil and gas industries in the area.
These industries produce high-paying jobs. Combine that with a competitive real estate market, and more people become inclined to rent.
The Business environment in Charlotte encouraged a lot of businesses to invest and open shops in the metro area. As the jobs arrived, so did people. These factors contributed to the hot real estate market.
Just because the market is a seller’s market, it doesn’t mean that there aren’t good investment opportunities. Real estate appreciation is well above the national average and homes sell for an average of $250,000.
If you’re already an investor in the area, you should sell now before the market corrects. If you’re new to the real estate market, you can still find profitable multi-family homes, or fix and flip properties.
3. Las Vegas
Las Vegas was the hottest city before the pandemic, thanks to record numbers of conventions and conferences in the city.
The conventions created job demand, which meant people could live and work in Las Vegas and experience a high quality of life.
The real estate market is hot in Vegas, but most people are renters, so you’ll compete with other investors to purchase property.
The average rental prices increased by 18% over the last year, as demand is high and supply is low. Plus, the population continues to grow.
These pressures make Las Vegas an opportunity to invest in profitable properties.
How many people dream of living in a place with oceanfront views just steps from the beach? That dream comes true in Miami.
Miami has everything a real estate investor could want. It has a luxury lifestyle, affordable properties, a high renter population, and increasing real estate values.
You do need to do your homework before you invest in Miami real estate. The market continues to change fast, and you have to stay on top of those changes.
You probably came across the stories of people fleeing Manhattan and other big cities. Workers discovered that they didn’t need the high cost of living and went to surrounding suburban communities.
That left holes in the rental market, which were quickly filled when the economy reopened. There were still plenty of real estate deals to make up for so many people leaving.
Manhattan is now a seller’s market, but there are still very good deals from the pandemic. If you find yourself torn between Miami and Manhattan for property, you can compare them at ManhattanMiami.com.
Is it possible to find a city where home prices are below the national average? Look no further than Pittsburgh, PA.
The city combines the best of what you want to see in a potential real estate investment. The city has a strong economy and high quality of life.
Real estate appreciates above the national average, so this is a great time to invest in the city.
7. Lehigh Valley
At the other end of Pennsylvania, there’s a swath of land that was once home to Bethlehem Steel. Lehigh Valley includes Bethlehem, Allentown, and smaller surrounding towns.
The steel plant closed about 25 years ago, but the local economy bounced back. What took the place of steel mills? Warehouses.
Hundreds of thousands of commercial square feet are now devoted to warehouses for Amazon, Cigars International, QVC, among other companies. The area is also the home of Mack Trucks.
It takes just over an hour to travel to New York or Philadelphia, making it a great location. Real estate prices are still affordable here.
Many people rent in the area, which makes this a great place to invest in real estate.
Getting Started in the Best Markets for Real Estate Investing
Now that you know what the best markets for real estate investing are, how do you get started?
You have to do a little soul searching first. Figure out what kind of real estate investments you want to make. Do you want to make money from rental properties?
You might want to buy a property and hold onto it. Plenty of investors make money from fix and flips. There are investors that have some cash and use crowdfunding apps to invest in real estate.
You have to know what you’re willing to do and what your skills are to make the most of your investments. For instance, if you know real estate and you have experience in construction, then fix and flips are right for you.
If you want to be a hands-off investor, it makes sense to invest in rental properties and hire property managers to manage them.
For investors that want to leave their jobs and bootstrap their way to wealth, purchase properties and handle them yourself.
Get Your Financing in Order
Yes, you want to have your financing ready to go before you start searching for properties. You could start your search for properties.
You risk finding the perfect real estate investment and losing it in a hot real estate market. All because you really weren’t prepared to purchase the property.
Figure out how much cash on hand you have and how much you can afford to invest. You don’t want to overextend yourself on a home loan in a weak rental market.
Search for Properties
Your next step is to find properties to invest in. Each of the best markets for real estate investments have neighborhoods and areas that are more desirable than others.
You have to look at these neighborhoods and determine if it makes sense to invest there or not. This is where the expertise of a real estate professional is valuable.
Calculate Operating Expenses
The best thing you can do for your real estate investment is to treat it like a business. Approaching real estate investing like a hobby yields poor results. Adopt a business and profit mindset if you really want to see success.
Part of that is calculating your operating expenses. Before you purchase a property, figure out how much it costs to maintain the property, property taxes, community fees, and advertising vacancies.
This step helps you come up with a cost analysis to determine what you need to rent the property for to make a profit.
Take Your Tax Deductions
Investing in real estate is the best way to lower your tax bill. You can deduct expenses, property taxes, and so much more. You can even defer capital gains taxes on the sale of your property when you use a 1031 exchange.
If you invest in the best markets for commercial real estate investing, you might be able to take advantage of local tax incentives.
Local governments know that investment in the community is a way to boost the local economy. There are often grants and incentives to encourage people like yourself to invest.
The Best Markets for Real Estate Investments
You just learned the best markets for real estate investing. No matter where you are in the country, there are regions that present incredible opportunities for real estate investors.
Even with this knowledge, investing in the best markets for real estate investments doesn’t guarantee success. You have to do your homework on every property you buy.
Do a cost analysis to make sure the property is profitable. Calculate your operations expenses to make sure you’re making money before you buy the property. Treat investing like a business and you’ll have the mindset to succeed.
Check out the other articles on this site for more real estate investing tips today!
Read Also : The Ultimate Guide to Investing in Real Estate