The real estate industry is among the most profitable markets in the United States. Recently, the cost of materials and labour increased, and the supply reduced, tumbling the inventory and inflating demand and housing prices.
That made the market quite standoffish for low-stake investors but provided a safe investment avenue for high-profile investors. With the booming market and high scarcity of homes, finding suitable homes for sale in the U.S can seem impossible.
However, all you need is the right mindset and knowing which cities offer a safe avenue for real estate investors.
How to Choose the Best U.S Cities with the Most Profitable Real Estate Markets
Understanding the real estate market of a locality determines is the first step to choosing U.S. cities with the most profitable real estate markets. You want maximum return on investment, and that’s why you have to consider things such as:
- Rental demand and tenancy rates
- Overall rental income of the property
- The tenant default rates and prices of the rental homes
- Overall population growth and market potential
- Job growth and the median home prices
- Property tax rates
Whichever your goals as an investor, the following are the top 10 cities in the United States with profitable markets.
1. Buckeye, AZ
Buckeye, Arizona, is the fastest-growing city in the United States, with a rapid population growth. Between 2010 and 2017, its population increased by about 3%. The town is built on top of a significant and abundant groundwater source.
This is one of the least expensive cities in the country to invest in real estate. For more than a decade, it has been one of the best places to invest, offering some of the highest returns on residential and commercial real estate.
Because of the state of the housing market and the area’s housing shortages, the value of many Buckeye homes for sale has increased significantly since 2019. This city is an excellent investment opportunity because it will only grow as more people discover it.
2. Youngstown, Ohio
Youngstown is the most populated and largest city in Mahoning County but one of the most lucrative cities for real estate investors. Its approximated home value is $42,867, the home value appreciation is 77 percent, and the property tax rate is 1.54 percent.
The Youngstown’s rent to home value ratio is 18.53 percent, the rent to income ratio is 28.50 percent, and the rental vacancy rate is 3.20 percent. The city’s population is low, but the high population growth and the new Youngstown Business incubator make it one of investors’ best real estate markets.
3. Tampa, FL
Tampa, FL is undoubtedly a friendly and livable place with one of the most profitable real estate markets in the U.S. This city’s home median purchase price is $323, 040 while the average rent price is $1,970.
The city has experienced a home price growth of 27.7 percent within a year and a population increase of 1.4 percent. The rental prices have increased by 39 percent within the last twelve months.
These are significant growth rates, way beyond the national averages, which gives Tampa, FL, an edge over similar-sized cities.
4. Detroit, Michigan
Detroit, Michigan, comes number four among the best cities with profitable real estate markets in 2022. Detroit is the biggest and most populated city in Michigan, with 640,000 inhabitants. It’s the home to big and leading companies such as DTE Energy, Quicken Loans, and Ally Financial.
The city enjoys an extremely high home value appreciation rate of 103 percent and good home prices. The effective property tax rate is 2.90 percent, while the rent-to-home value ratio is 16.99 percent.
5. Boise, Idaho
Boise, Idaho, has demonstrated to be a leading U.S. destination for real estate investors in 2022. The divergent supply and demand dynamics continue causing inflation of home prices in Boise. In the last two years, the city experienced incredible home sales and significantly high home prices.
Statistics have shown the city’s job growth to be two to three times that of the national average, while the unemployment rates are all-time low at 3.5 percent. It was ranked 6th as the best city with outstanding job growth, while its yearly home appreciation rates were estimated at 15 to 20 percent.
6. Spring Hill, Florida
First-time and established investors will also find Spring Hill in Florida a great location for real estate investment. Spring Hill, Florida, is a bustling suburb with a low population of 100,000 people. The value of homes in this city is clocking in below $250,000, while the home appreciation rates are as high as 85 percent.
The city’s effective property tax is rated at 0.82%, while the rent-to-home value ratio is 5.28%. The rental vacancy rate is 3.10 percent, while the income ratio is 30.50 percent.
7. Houston, Texas
Investors looking to invest in the United States will also love the profitable Houston, Texas, real estate market. Houston is the hub of oil and gas in the United States and the fifth-largest metro region in Texas.
Its population is slightly over 7 million and continues to grow. Houston homes 53 companies ranked among the best 1000 by Fortune. On average, homes in Houston cost $412,000, and the average rental income is $1550. It’s an active real estate market with significant trades and fast-moving housing stocks.
8. Birmingham, Alabama
Birmingham in Alabama is also a great destination for real estate investors in 2022. The city has a population higher than 207,000, with its metro area having slightly over 1.2 million residents. It’s rated among America’s top-leading banking and manufacturing centers.
The home prices are low, while the rent-to-home value ratio is significantly high. Average home value is $90,047; the effective property tax rate is 0.80% while the rent-to-home value ratio is 11.15%.
9. Dallas, Texas
Real estate investors in 2022 also have to reap in the Dallas, Texas, real estate market. The city has strong housing stock and higher rental rates. Studies have shown that Dallas receives approximately 340 new residents daily, making its population growth super high.
The homeowner rate in Dallas is the lowest throughout Texas, while the rental tenancy rates have increased by slightly over 14%.
10. Atlanta, Georgia
The last city on the list of the best places with strong real estate markets is Atlanta, Georgia. Over the last ten years, Atlanta’s population has increased by 14 percent. Atlanta is rated among the top best U.S rental markets IN 2022.
The population growth is quite high considering the city gets approximately 5000 new residents every twenty fours. The annual property appreciation rates are forecasted at 10 to 15 percent.
Are you nursing the idea of investing in the United States’ real estate market in 2022? The top ten cities offer the most profitable real estate markets. Decide on which city to invest in, depending on your investment goals and budget.
Look at the property’s suitability in these cities, depending on whether you’re buying rental property or undeveloped land.