Are you interested in investing in rental property but need help figuring out where to start?
Do you ever wish you had a crystal ball to help you learn where the best places to buy rental property are?
Well, sadly a rental market crystal ball doesn’t exist — we’d be the first in line if it did!
At Awesomely, our future forecast uses cold hard data, which I personally trust more than a crystal ball anyway!
So, we’re gonna check out some of the best places to buy rental property based on our top metrics and dive into different ways you can find these properties.
4 Best Places to Buy Rental Property
- Charlotte, North Carolina
- Charlotte is the largest city in North Carolina. It tops our list of the best places to buy rental property due to its positive population growth, job growth, and average rent price. The city is the second-largest banking hub after New York City, creating high-paying jobs in the area.
- The population has grown from approximately 874,629 in 2020 to 911,311 in 2023, a 4.2% increase since the 2020 U.S. census.
- Employment has risen 10.3% over the past 5 years.
- According to the U.S. census, the median value of owner-occupied housing units from 2018 to 2022 was $312,800. Based on data from Zillow Rental Manager, the median gross rent in 2024 is $2,019.
- Raleigh, North Carolina
- Raleigh is the capital of North Carolina. The Raleigh-Durham metro area is known for its higher education institutions, including Duke University, the University of North Carolina at Chapel Hill, and several others. And where there’s schooling, there’s def a need for rentals.
- The population has grown from approximately 467,867 in 2020 to 482,295 in 2023, a 3.1% increase since the 2020 U.S. census.
- Employment has risen 15.6% over the past 5 years.
- According to the U.S. census, the median value of owner-occupied housing units from 2018 to 2022 was $347,000. Based on data from Zillow Rental Manager, the median gross rent in 2024 is $1,900.
- Las Vegas, Nevada
- Vegas may be known for its exceptional hotel scene, but the rental market is booming, too. The city’s hotels, casinos, and other entertainment and retail businesses offer many employment opportunities.
- The population has grown from approximately 644,883 in 2020 to 660,929 in 2023, a 2.5% increase since the 2020 U.S. census.
- Employment has risen 12.5% over the past 5 years.
- According to the U.S. census, the median value of owner-occupied housing units from 2018 to 2022 was $365,300. Based on data from Zillow Rental Manager, the median gross rent in 2024 is $2,078.
- Jacksonville, Florida
- Jacksonville is the largest city in the state of Florida. The population has grown from approximately 949,618 in 2020 to 985,843 in 2023, a 3.8% increase since the 2020 U.S. census.
- Employment has risen 11.6% over the past 5 years.
- According to the U.S. census, the median value of owner-occupied housing units from 2018 to 2022 was $243,000. Based on data from Zillow Rental Manager, the median gross rent in 2024 is $1,710.
What Makes a Market Good for Owning Rentals?
Many different factors go into choosing the best places to buy rental property. At Awesomely, we see population growth, job growth, and the average rent price in a city as the top indicators of a rental market primed for investors.
Impt.: The best places to buy rental property can be calculated using many factors that vary from state to state and platform to platform. The three designators we’re using could differ from what others choose to focus on in their research.
Our research is based on data from the U.S. Census Bureau and the U.S. Bureau of Labor Statistics.
Here are some top indicators to determine the best places to buy rental property:
- Population Growth
- As a city’s population grows, there is a higher need for rental properties. It’s all about supply and demand.
- Job Growth
- Increased employment opportunities lead to an influx of people moving to cities with job openings, creating more demand for rental properties.
- Average Rent Price
- Of course, New York City and San Francisco have some of the highest rent prices in the country. But it’s extremely difficult to break into these markets due to the large capital requirement and the existing market competition.
- The markets discussed below offer median rents that are competitive with the national average and have more affordable home prices to break into the rental market.
I mean, more people, more jobs, more money — that’s an investment plan I can get behind!
How to Find Rental Properties
Whether you’re purchasing a rental property in cash or with financing, you want to find a quality home for the best possible price. If you could find a property where the monthly rent you charge is higher than your mortgage, you’d have instant cash flow for your REI business. Happy day.
Here, we’ll walk you through our top tips for finding rental property…
1. Bird Dogs:
Bird dog may seem like a funny thing to call a person, but it’s a common title in REI. Don’t worry; they won’t take offense!
These folks drive around looking for properties that are distressed, unkempt, junky… likely with motivated sellers who may just be interested in selling should they get a decent offer. (Psst, that’s where you come in!)
An experienced bird dog now only knows what areas to search in, but also what to look for and important intel to gather for you. They might even have market knowledge to help as they’re finding off-market deals that’ll be below market rate.
Compensation is typically a flat free for a certain number of leads.
2. Real Estate Agent:
A traditional real estate agent with access to the MLS is an excellent resource for finding the best places to buy rental property. Your agent will use your desired property specs to customize search results and track properties that fit your criteria.
They’ll want to help, because when you’re ready to do deals, you could bring them in for their services and they’ll get a nice commission. Or! Send them deals you find that just don’t work for you, and they can scoop them up for their business.
3. Real Estate Wholesalers:
Working with a wholesaler (and yes, wholesaling is in fact legal!) is a great way to find properties under market value. Wholesalers identify and get under contract on distressed properties, and then transfer the contract to other investors for an assignment fee.
The downside is that some properties will be in pretty rough shape, so you or your contractor will likely have to get your hands dirty to fix it up.
These renovations require additional capital, of course.
No money trees in sight, sadly.
Also, traditional financing isn’t always available for wholesale properties, so you might have to go through private lenders.
Don’t forget, wholesaling can vary state to state. For example, wholesaling real estate in California is different from wholesaling in Texas.
Final Thoughts — 4 Best Places to Buy Rental Property
Any of the cities mentioned above would be great markets to explore for your REI business!
Based on the data, population and job growth should drive more and more people to those cities, creating demand for rental properties. That’s where you swoop in and save the day with the perfect rental property!
Remember, the best places to buy rental property are areas with a high growth outlook.
As you’re on the hunt to buy a property and turn it into a rental for passive income, make sure you pay attention to these important metrics!
