Best rental markets for landlords in 2023
Determining the best rental markets for landlords in 2023 is mainly based on population growth, the local economy, market trends, and the current job market. A good indicator of a market ripe for real estate investment also includes laws that favor landlords, rental affordability, and low competition. The perfect rental markets to invest in offer a mix of variables conducive to increasing profits and optimizing gains.
GoBankingrates.com gathered data from Zillow regarding unemployment rates, typical home value, and monthly rent from the 200 largest housing markets in the U.S. These factors usually amount to good jobs and affordable housing. The previous indicators offer savvy investors seeking maximum return on investment (ROI) huge potential when choosing which markets to purchase rental properties.
When considering the best rental markets for landlords to purchase property in, investors should determine their investment strategy. Is your focus on new builds or reconstructing old homes? Although larger markets exploding with job and population growth may yield the highest returns, there’s market saturation, low inventory, and more competition among investors to take into account as well. Every investment strategy is unique to each individual investor. There is no right or wrong way to invest.
3 best rental markets for landlords in 2023
- Nashville, Tennessee – The first city to crack the list is the rapidly growing U.S. capital city and home of country music, Nashville, Tennessee. Nashville, or the “Music City” as it is known, experienced population and job growth that exploded into a housing influx that left builders scrambling to meet the soaring demand for homes. Doorloop cites a median household income increase of 6.6% as a key factor behind the growth. A jump in household income presents a cash flow opportunity for investors.
- Las Vegas, Nevada – Forget the city of “sin,” an abundance of work opportunities in tech, gaming, construction, and tourism have people flocking to Viva Las Vegas in droves. “You can also enjoy comparatively lower housing prices and cost of living here, which make it even more attractive for people who are looking for a reasonable place to invest in,” David Tully, a realtor with Exp Realty in Reno, Nevada, told U.S. News, “Not to mention, an excellent return on vacation rental investments.” The city also boasts a 22% higher median rate that is both relative and promising.
- Madison, Wisconsin – Ranked in the top #20 at #11, Madison, Wisconsin has a growing population trending upward. “The Dairyland” metropolis celebrates a median home sale price slightly higher than the national average. The steady incline in growth over the years and higher property values, make it an attractive investment for buyers.
In summary, areas with diverse industries and strong job growth tend to attract renters. Real estate experts advise choosing markets with steady growth and low vacancy rates in moderate-sized smaller cities over large cities. Also, consider the proximity to business hubs, universities, and developing areas. Other factors that make the best markets for landlords include existing amenities, future infrastructure plans, and land development.
Are you looking to diversify or expand your real estate investment portfolio? Have you considered adding turnkey properties in Detroit to your roster of rental properties? Team LBR Real Estate can apply our expansive understanding of Detroit real estate investment and property management to formulate a customized plan for your real estate business. Contact Team LBR Real Estate today for a free consultation!