Investing in real estate requires time, effort, and research. After all, your goal is to make money with your investment. However, it’s hard to do so without finding an ideal location. Today, we’re going to discuss finding the best location to invest in real estate in 2023. Read about what makes a good location and the top markets for investors this year.
Contents of This Article:
- What Makes a Good Location for an Investment?
- How to Find the Best Location to Invest in Real Estate
- 5 Best Locations to Invest in Real Estate in 2023
- Find Local Management for Your Investment
What Makes a Good Location for an Investment?
Whether you’re an investor or property manager in Philadelphia, it’s crucial to stay up-to-date with the real estate market. After all, finding a good location for your investment is the first step to earning maximum returns and ultimate success. As such, here are some indications of a good location for an investment property in 2023.
- High Rental Demand
- Population Growth
- Favorable Real Estate Prices
- Low Crime Rate
- Public Amenities
High Rental Demand
Low rental demand may cause you to suffer from vacancies and miss out on profits. As such, it’s important to research areas with high rental demand. In addition, up-and-coming areas are great investments since more people look to move to these areas as they progress. Ultimately, you’re looking for the highest return on investment, which requires an area with high demand.
Areas with projected population growth are best for rental investments. After all, you want to find a market where more people are moving into it rather than leaving for more affordable housing. Ultimately, population increases drive rental demand, which in turn limits vacancies and allows landlords to set favorable rental rates.
Favorable Real Estate Prices
One of the challenges of investing in real estate, especially throughout the past year or so, is real estate prices. We’ve experienced higher-than-usual home prices and extremely inflated mortgage rates. As a result, many investors are waiting for prices to drop before investing in new real estate properties. However, some markets allow for profitable rentals with high demand and fair rates.
Low Crime Rate
Nobody wants to live in an unsafe area with high rates of crime. So, it’s extremely important for investors to look at these statistics while choosing a location to buy rental properties. If you invest in an area that’s known for crime, your property could suffer from vacancies, damages, or increased liability.
While looking for an investment property, search for areas that have plenty of public amenities. For instance, most renters want to live in areas with parks, restaurants, shopping centers, and job opportunities. Another major selling point for rental properties is access to public transportation. These public amenities can attract renters and increase your rental income potential.
How to Find the Best Location to Invest in Real Estate
If you’re looking for the best location to invest in real estate this year, it’s important to research the market and look for areas that are set to do well. Here are some tips for finding the best areas for real estate investments this year.
- Understand the Local Market- Knowing where you plan to invest is the first step to finding a suitable rental property. Next, you’ll want to research and analyze comparable rentals to ensure the investment is profitable.
- Look for Upcoming Developments- Another significant indication of a profitable investment property is a location with upcoming developments. After all, new developments bring jobs, opportunities, and people to an area.
- Know Your Financial Requirements- You need to have a significant amount of money saved to invest in real estate. As such, it’s wise to know what you need to pay for while buying an investment property. For instance, you’ll need to consider closing costs, taxes, insurance, and other fees and expenses.
5 Best Locations to Invest in Real Estate in 2023
Although real estate prices and mortgage rates are extremely high due to inflation, that doesn’t mean it’s impossible to find good places to invest. However, you must look at market statistics and research up-and-coming areas to find profitable properties. That said, here are the ten best locations to invest in real estate in 2023.
- Austin, TX
- Boise, ID
- Charlotte, NC
- Nashville, TN
- Orlando, FL
Austin is a great place to invest if you’re looking for an area with high demand and employment growth. They have one of the highest-rated local economies in the United States and high population growth projected for the next five years. Austin had exponential market growth in 2022 and quickly became an area with high demand for rentals. Research shows that it’s not slowing down any time soon.
- Average Home Price: $540,000
- Average Rental Rate: $2,400
Another great place with high employment growth and favorable rental rates includes Boise, Idaho. They’re named one of the most well-run cities in the United States and had significant population growth in 2022. Luckily, it’s not slowing down any time soon. Boise is one of the top markets projected to have a high population and household growth within the next five years.
- Average Home Price: $490,000
- Average Rental Rate: $1,900
Throughout the past couple of years, Charlotte has been one of the fastest-growing cities in the United States. Due to large population growth and job expansion, Charlotte is a great place to invest in rental properties. Additionally, with plenty of colleges and universities, there are plenty of opportunities to rent to younger individuals joining the workforce.
- Average Home Price: $390,000
- Average Rental Rate: $2,000
Compared to last year, the housing market in Nashville is slowing down. However, even with a slight decrease in growth, Nashville still has high rental demand this year. Tennessee’s capital, Nashville, has the highest population growth rate in the state. Additionally, it has one of the highest-rated local economies in the United States, with high employment growth.
- Average Home Price: $450,000
- Average Rental Rate: $2,000
Known for its tourist attractions and plenty of job opportunities, Orlando has experienced rapid population growth over the past few years. In fact, there’s a reported growth of more than 1,000 new residents every week. Luckily for investors, more than half of new residents are renting their homes, meaning the rental market will continue growing throughout this year.
- Average Home Price: $375,000
- Average Rental Rate: $2,200
Find Local Management for Your Investment
Finding the best location to invest in real estate is the first step in founding a successful rental property business. However, once you scale up with several properties, you’ll need to consider rental management. Luckily, Bay Property Management Group is well-versed in local property management and offers comprehensive services for busy landlords.
Whether you need help marketing your properties, finding tenants, or performing property maintenance, BMG has the expertise to help you. We offer full-service management around Baltimore, Philadelphia, Northern Virginia, and Washington, DC. Contact us today to learn more about our rental management services.