Anyone with even the slightest interest in building long-term wealth knows that real estate is a prime way to do it. Land is an asset that usually holds value very well. And in most cases, you’ll always make back your initial investment, at the very least. In many other cases, you’ll make much, much, much more. But as realtors often chant, for buyers who intend to move in and those who want to use it as an invest property alike, “location, location, location” is everything. So, how can you determine where you should be spending your money? We’re here to help, as we answer the question so many ask: What is the best place to buy investment property?
Factors to Help You Decide the Best Property Investment
Before we jump into our top location recommendations, we want to touch on what you should consider when deciding where you’ll purchase an investment property. We used these factors to make our own list, but you can use them to determine whether or not any location will be a good one.
If you intend to spend some time in the property, you’ll want to be sure that you actually like the locale. Of course, you don’t have to use an investment property that way. But many of us love the idea of a vacation home where we can spend a few months of the year happily but then rent it when we aren’t there. All we’re saying is that you should know where you stand on this point before you make any decisions!
Of course, this is particularly relevant if you plan to make money off of the property by renting. But even if you’re concerned with long-term profits, you’ll want to have a finger on the pulse of the local rental market. Competitive renters often signal an all-around strong market that will continue to grow for years to come. This is because renters are generally more concerned with things like walkability, things to do, amenities, etc. Mashvisor has a great article about how you can conduct an accurate rental market analysis of an area.
Type of Investment:
This goes hand in hand with our first point of consideration, but the type of investment you’re making is a big factor to consider when deciding where you’ll buy. Do you want to flip a house? It might be best to pick an up-and-coming but still somewhat cheap suburban area. Do you want to make passive rental income for the next few decades? A walkable downtown district that is already established as a hot spot is probably your best best.
All of the above said, there are a few locations that most financial and real estate pros agree make for a smart move in general.
So now, in no particular order, let’s talk about the best places to buy property!
#1 Atlanta, Georgia
You might think that Atlanta is a big enough city to be prohibitively expensive for investment buyers. But in actuality, this city-suburb has somehow managed to grow into a mecca of exciting cultural and entertainment experiences while maintaining home costs that are below the national average. Because of this, acquiring a property can be relatively cost-effective, and given its ongoing job growth (in 2019, it had passed the national average by 46%) you’ve got a good outlook for increases in value.
#2 Birmingham, Alabama
While we’re on the affordability note, we need to mention Birmingham! This is also a great place to buy an investment property because it has a fairly centralized Southern positioning. It isn’t too far from Atlanta, Nashville, Memphis, or New Orleans. And, according to the city’s official website, Millennials are increasingly calling it home.
#3 Jacksonville, Florida
Home to multiple Fortune 500 companies, yet simultaneously a quaint beach-y town, Jacksonville is a prime candidate for investment properties. Although purchasing here might be a little bit more of an expensive transaction (especially if you plan to buy something beachfront), it is a place that has the perfect formula for rental success, if that is your goal.
#4 Savannah, Georgia
Certainly, you knew this was coming from us! 😉 As we mentioned in a previous recent blog post of ours, the Savannah market is hot. Obviously, that means that it’s a great place to invest in. But it’s also well-suited for that pursuit because of its history, in two ways. First, it’s a place that beautifully combines historic districts and legendary places with modern amenities and things to do. Environments like that, especially urban ones, have a long tradition of thriving nonstop from a real estate perspective. Second, Savannah itself has a history of holding value. Home prices have risen year after year after year for decades. Just ask Zillow. Plus, all of our world-renowned chefs, historic museums and tours, nearby beach and mountains, and arts and culture scene make Savannah a “something for everyone” vacationer’s paradise.
#5 Durham, North Carolina
In just one year, Durham’s average rent price increased by 7%. That is not a small figure! According to Norada Real Estate Investments, it “has a track record of being one of the best long-term real estate investments,” too. This is all likely related to its positioning. Durham happens to sit within the famous “Research Triangle,” which comprises Duke University, UNC-Chapel Hill and North Carolina State University at its points.
There are, of course, many reasons to invest in many places, and as you can see, we’ve focused on the Southeast (we know it best). But we hope this list has helped you contemplate your next big investment move. What is the best place to buy investment property? Now, maybe you know what your answer would be!