Our current market is seeing high interest rates and stubborn sales prices throughout the country. At the time this article was written, home buyers could expect the average 30-year fixed mortgage to be 7%. The average home in the United States is currently priced at $416,100 according to Rocket Mortgage. Given all this, we still see many people interested in investing in real estate with a recent trend of real estate investors focusing on acquiring single-family homes all over the country. With so much competition, we thought we would help do some of the work for our investor readers by sharing the top 10 locations recommended by Rocket Mortgage for real estate investing in 2024.
Before identifying the top 10 locations let’s discuss what makes an area a good location for investing. Consider several factors like location, property value, and potential rental income. According to a 2023 Rocket Homes survey, 9 of the 10 best places to invest in American real estate are in the Southeast states or Texas. Metrics used to identify these top investment cities include population growth, gross rental yield, vacancy rates, housing price index data, unemployment rates, and the percentage of renters. A growing population indicates a diverse, job-friendly economy and higher housing demand. Gross rental yield measures annual rent as a percentage of the property’s market value, with 7% or higher being ideal. Healthy vacancy rates (5%-10%) indicate a balanced supply and demand. The housing price index shows trends in market prices, and the median home sold price provides a typical market value, less affected by outliers. Factoring in these metrics can help ensure a wise investment decision.
Top Cities for Real Estate Investment in 2024
1) Athens, GA: Home values in Athens are rising, with a median sold price of $328,265 as of September 2023. Despite a challenging real estate market, home sales increased by 7.6% from August to September 2023, and 30% of sales were above asking. Athens, home to the University of Georgia, has a high demand for rental housing, with popular neighborhoods including Cobbham, Five Points, and Normaltown. Population: 128,561; Gross rental yield: 40%; Vacancy rate: 48%; Housing price index 5-year growth: 9%; Median home sold price: $328,265.
2) Savannah, GA: Savannah’s economy is driven by tourism and the Port of Savannah, the fourth largest in the U.S. The Historic District and Ardsley Park are key investment areas. Population: 148,004; Gross rental yield: 49%; Vacancy rate: 14%; Housing price index 5-year growth: 22%; Median home sold price: $327,125.
3) Waco, TX: Home to Baylor University, Waco has seen a 96% home value increase over the past 5 years. The city’s development plan promotes mixed-use communities, and a $35 million riverfront project is in progress. Population: 143,984; Gross rental yield: 55%; Vacancy rate: 82%; Housing price index 5-year growth: 79%; Median home sold price: $252,500.
4) Jacksonville, FL: Jacksonville offers a mix of beachfront living and community vibe. Despite market challenges, the median home price rose 2.5% in 2023. Population: 971,319; Gross rental yield: 44%; Vacancy rate: 4%; Housing price index 5-year growth: 99%; Median home sold price: $297,538.
5) Lakeland, FL: Positioned between Tampa and Orlando, Lakeland is attractive for families and retirees. The median home price increased by 5% in 2023. Population: 120,071; Gross rental yield: 52%; Vacancy rate: 57%; Housing price index 5-year growth: 7%; Median home sold price: $314,800.
6) Oshkosh, WI: Oshkosh’s economy benefits from manufacturing, healthcare, and education, bolstered by proximity to Lake Winnebago. Popular neighborhoods include downtown Oshkosh and Town of Algoma. Population: 65,948; Gross rental yield: 43%; Vacancy rate: 17%; Housing price index 5-year growth: 71%; Median home sold price: $222,366.
7) El Paso, TX: El Paso’s affordable living costs and proximity to the Mexican border drive its economy. Key neighborhoods include Castner Heights and Cielo Vista. Population: 677,456; Gross rental yield: 61%; Vacancy rate: 74%; Housing price index 5-year growth: 3%; Median home sold price: $250,570.
8) Tallahassee, FL: As Florida’s capital, Tallahassee supports a large student population from FSU. Top neighborhoods are Betton Hills and College Town. Population: 201,731; Gross rental yield: 50%; Vacancy rate: 31%; Housing price index 5-year growth: 65%; Median home sold price: $310,000.
9) Durham, NC: Known as the “City of Medicine,” Durham attracts residents with its healthcare and tech industries. Popular neighborhoods include Trinity Park and Duke Park. Population: 291,928; Gross rental yield: 36%; Vacancy rate: 42%; Housing price index 5-year growth: 7%; Median home sold price: $404,940.
10) Orlando, FL: Orlando’s strong rental market and diverse economy make it attractive to investors. Key neighborhoods include Baldwin Park and College Park. Population: 316,081; Gross rental yield: 42%; Vacancy rate: 65%; Housing price index 5-year growth: 14%; Median home sold price: $374,387.
Each city presents unique advantages, from Athens’ rising home values to Orlando’s strong rental market. Please keep in mind, this article is for informational purposes and does not constitute financial or any other form of investment advice. Real estate investments carry risk including the potential loss of capital and variability of returns. However, by considering key metrics such as gross rental yield, vacancy rates, and housing price index growth, investors can make informed decisions before deciding to invest in real estate.
