Best Us Housing Markets For Investing
With all of that said, lets take a look at some of the U.S. housing markets that are looking the most enticing right now. These numbers are based on information provided by Local Market Monitor, after collecting data across more than 3,000 markets to create their most recent survey.
If you are considering a jump into real estate investing, the following eight markets are a great place to start looking.
Choosing The Top Websites For Real Estate Investors
While there are literally tons of great real estate websites out there, certain sites stand out for what they can offer to real estate investors. People who are just learning about how to invest in real estate will benefit from knowing which websites to follow.
When coming up with the succeeding list of real estate websites, we chose the ones that are best known for something specific in real estate investing. We scoured through the internet to find what we believe are the best based on what newbie real estate investors can gain.
Website Categories
Weâve selected the following categories:
Instead of just ranking the websites, weââ¬â¢ve decided to highlight specific sites for their specialization. It gives newbie real estate investors a chance to find out which sites to turn to for their specific needs.
Related: Top 7 Qualities of the Best Real Estate App for Property Investors
Maximize Profits With A Pre
Investing pre-construction in an apartment intended for the business traveler market is one of the best available opportunities. Business people staying longer than a week prefer an apartment to a hotel.
It can be possible to qualify for financing as a non-resident of the DR. We dont recommend financing property overseas, however, unless youre sure you can cover the mortgage payment even without any income from the financed property.
That said, Santo Domingo city apartments rent well, and you should have no problem covering your mortgage payment from your rental income.
Read Also: Free Stocks To Invest In
Real Estate Investment Groups
Real estate investment groups are ideal for people who want to own rental real estate without the hassles of running it. Investing in REIGs requires a capital cushion and access to financing.
REIGs are like small mutual funds that invest in rental properties. In a typical real estate investment group, a company buys or builds a set of apartment blocks or condos, then allows investors to purchase them through the company, thereby joining the group.
A single investor can own one or multiple units of self-contained living space, but the company operating the investment group collectively manages all of the units, handling maintenance, advertising vacancies, and interviewing tenants. In exchange for conducting these management tasks, the company takes a percentage of the monthly rent.
A standard real estate investment group lease is in the investors name, and all of the units pool a portion of the rent to guard against occasional vacancies. To this end, you’ll receive some income even if your unit is empty. As long as the vacancy rate for the pooled units doesnt spike too high, there should be enough to cover costs.
-
More hands-off than owning rentals
-
Provides income and appreciation
-
Similar fees as mutual funds
-
Susceptible to unscrupulous managers
What Makes A Real Estate Market Attractive For Investors
In the next part of this article well discuss how to find markets and single-family rental property based on the three main real estate investment strategies:
- Cash flow
- Appreciation
- Balance of cash flow + appreciation
But before we do, lets talk about what makes a real estate market good to begin with.
What does good really mean?
You see, the word good is a pretty subjective term.
Good pizza, good beer, good movie . . . everybody has their own opinion of whats good and whats not. But when youre investing money in real estate, its important to understand exactly what separates good real estate markets from average, not-so-good, and even downright terrible.
Here are seven factors that help make a real estate market good for investors:
Also Check: How To Invest In Austin Real Estate
Top 3 Reasons To Invest In The Albuquerque Real Estate Market In 2022
Job Growth
In the last 12 months, there were 20,800 jobs created in the Albuquerque metro area, which was a job growth rate of 6%. This was 24% higher than the national job growth rate for the year. The unemployment rate is 8%, which is on the higher side, but is likely Covid-related and will therefore adjust as the pandemic comes under control.
Population Growth
Since 2010, the population in Albuquerque has increased by 3%. Although this is less than the 6% growth experienced nationwide, this shows us that Albuquerque is experiencing consistent population growth year after year. And while this growth isnt staggering, its another indicator that Albuquerques real estate market will continue to be stable in years to come.
Affordability
- RealWealth Property Team Data
What To Look For In A Real Estate Investing Location
If you’re a real estate investor looking for monthly rental income and a high potential for annual appreciation, it’s wise to study the data from multiple sources. Preferably, you’ll want to look for areas where rents are steadily increasing.
You also want the local economy to be healthy and stable, where job opportunities are growing. For example, a city where a large industry is moving in will likely experience a demand increase for rental housing. Your rental property should be cash flow positive. And, of course, you want market price appreciation.
Steer clear of cities that don’t have the trends you’re looking for. A city with high home prices is likely not an area where the monthly rental income will cover the mortgage, insurance, and taxes of owning a buy-and-hold investment property.
Top 10 lists offer some insight into metropolitan areas where real estate investors might consider buying rental properties that provide annual cash flow and potential market appreciation. That is not the only research you’ll want to do, but it’s a start.
You May Like: How To Invest In Index Funds For Beginners
Popular Ontario Cities For Investing In 2022
- Bancroft. Known for its proximity to Algonquin Provincial Park and prime Ontario cottage country, Bancroft has long been a vacation destination for those looking to escape fast-paced city life. And, with the onslaught of the COVID-19 pandemic and the resulting increase in remote work, the town also offers attractive incentives for those looking to make it a permanent location.
- Woodstock-Ingersoll. Pre-pandemic, when newcomers visited the Friendly City of Woodstock, it was mainly for sightseeing. This historic city is known for its picturesque downtown core full of original centuries-old architecture, cobbled sidewalks and gardens. These days, however, visitors come from across Ontario with homebuying intentions, snapping up local listings and leading the home value appreciation trend.
- London-St Thomas. The City of London may be best-known as a college town, home to both the University of Western Ontario and Fanshawe College. And while it certainly boasts a vibrant downtown frequented by students for its bars, dining and entertainment options, home seekers love the region for its wide variety of neighbourhoods, access to nature and strong job market. London is also known for its comparatively inexpensive real estate, as detached houses can be had for a fraction of what theyd sell for in other major urban centres, while those already in the market have enjoyed steady value appreciation over recent years.
Tip
How Does Real Estate Investing Affect Your Taxes In Canada
First off, in Canada, you pay a capital gains tax when you sell property for a value higher than the amount you paid for it. The keyword there is sell. Only when you sell your property do you lock in your capital gains. If you dont sell, you wont pay taxes.
Contrary to what some people think, your full capital gains arent taxed at your marginal tax rate. Only half of the capital gains are subject to your marginal rate. So, if you flipped a house and made a profit of $100,000, only $50,000 would be subject to the capital gains tax.
Finally, keep in mind, capital gains apply to properties and houses that arent your principal dwelling. If you profit from the sale of your main home, youll qualify for a tax exemption.
Read Also: Why Is Socially Responsible Investing Important
Pick The Right Neighborhood
Once youve selected the right market, its time to narrow your search to the right neighborhood. Selecting the wrong property in the right market can be as disastrous as selecting the wrong market altogether.
To that end, you should look for a neighborhood that has solid:
- Income Levels
- Transportation
Foreign Investment In Us Real Estate
Foreign individuals and corporations are free to purchase residential or commercial real estate in the United States. In 2013, foreign buyers made up about 7% of transactions in the $1.2 trillion U.S. real estate market . The annual survey of the Association of Foreign Investors in Real Estate ranked San Francisco, which had been one of the top five global cities since 2011, at 11th place, and Washington, D.C., at 25th from 15th place last year. Furthermore, the survey revealed that New York City is no longer the only No. 1 city in the US that appeals to foreign investors that title is now shared with Los Angeles, which is tied with New York in this latest survey.
Read Also: How To Invest In Debentures
Active Vs Passive Investing
An important distinction to make when choosing an investment strategy is between active and passive investments. Active strategies, as the name implies, require a more hands-on management approach. For example, rehabbing a house is considered an active investment strategy. You will be in charge of coordinating renovations, overseeing contractors, and ultimately ensuring the property sells. Active strategies require more time and effort, though they are associated with large profit margins.
On the other hand, passive real estate investing is great for investors who want to take a less involved approach. Examples of passive real estate investing include REITs, buy and holds, or rental property ownership. With these strategies, you can enjoy passive income over time while allowing your investments to be managed by someone else . The only thing to keep in mind is that you can lose out on some of your returns by hiring someone else to manage the investment. Overall, the right investment approach will depend on your schedule, skill level, and finances.
What Are The Best Areas To Invest In Real Estate
We cannot understate the importance of buying an investment property in a location with healthy financial growth. Considering factors such as the internal rate of return can protect your investment and help you avoid mental, emotional and financial stress down the road. When deciding where to invest, you should consider the locations population, home prices, average monthly rent, and its vacancy and growth rates.
So, with all these factors in mind what are the best areas to invest in real estate in 2021? The following list was determined by analyzing data from the U.S. Census Bureau, Forbes annual Top Housing Markets To Watch, and independent Zillow research.
Also Check: Invest In Your Woman Quotes
Rent Out Residential Property
If house flipping sounds like too much work, you could rent out residential property instead. In fact, as more and more Canadians are renting for longer periods of time, becoming a landlord isnt such a bad idea. As a property investor, you could rent out single-family homes, condos, apartments, duplexes, or even townhouses. Rent from your tenants will produce extra cash flow, and you could also benefit from long-term appreciation of your property.
Of course, youll want to buy rental property in a desirable area, preferably one near major employers, schools, and hospitals.
Keep in mind, youll be in charge of the maintenance and upkeep on the property. The mortgage rates on residential property are typically higher than those on your primary residence. So, before you take out a mortgage with just anyone, make sure you compare rates among different mortgage lenders.
How Covid Supercharged The Canadian Housing Market
This new urgency has supercharged what was already a frothy housing market, according to the Canadian Real Estate Association. Initially, the shock of lockdowns and economic uncertainty did cause a nationwide lull between February and March 2020, with sales and listings plunging 14.3% and 12.5%, respectively. However, the market recovered to normal seasonal levels by June 2020, with sales soaring 15.2% year over year, and 63% from May 2020much faster than the industry had anticipated.
Buyers venturing outside their current regions to find a dream home have brought big city market dynamics with them. Formerly sleepy small towns are now grappling with a rapid depletion of inventory, bidding wars and homes selling for considerably higher than they were listed for, both due to overwhelming demand and the practice of pricing properties artificially low to attract more potential buyers and sparking a bidding war. The latter is a tactic frequently used in larger urban markets, and had not been typically seen in small towns prior to the pandemic.
This is sounding alarm bells for policymakers, prompting the Canadian government to take action to cool sizzling price growth: A new national foreign buyer tax was introduced in the most recent federal budget, while the banking regulator has proposed a tougher mortgage stress test, to take effect in June of 2021.
Don’t Miss: Is Roofstock A Good Investment
Best Places To Buy Rental Property
In 2022, US home buyers are under pressure to find a home soon. Many will not because of low supply, high prices, high financing costs, big down payments, and since more buyers are investors. Competition is intense.
And rental property investors are also forced to look widely for the best places to buy a rental property. With unemployment rates dropping, wages rising, overall rents rising, and big demand, houses in particular are in demand as investment properties.
Work from home, rising wages, low supply in the housing market and millennials raising families means houses are in demand as best kinds of investment properties. Investors are looking into the best places to buy those rental houses. For some, property investment is a bit of a hobby, but researching the best cities, states, and property types is wise.
Definitely share our posts and material with your friends and business partners. There are excellent opportunities in real estate and for investors and new rental management companies. And whether its vacation properties or long term rental leasing, owners see how great property management software helps them turn a profit.
Factors For Determining The Best Places To Invest In Real Estate
Various factors impact the real estate market and knowing them is essential before deciding where to invest. Below, we will list some of the criteria we considered before creating our list of top spots for real estate investment.
- Economic and financial issues job and income growth, qualified labor availability, interest rates, and cost of capital.
- Social and political issues political landscape, government budget issues, immigration.
- Real estate and development issues construction costs, construction labor, housing costs, and availability.
Each criterion is supported by additional factors. Meaning, the analysis goes deeper than a few key indicators. Still, destinations with a strong house index value, population growth, job growth, and high median rent are your smartest move.
Plus, wed like to mention the importance of your plans with the estate.
If you plan to invest in one of the best places to buy vacation rental property, you should consider popularity. Also, its critical to know whether that destination is winter-only, summer-only, or all-year-round attractive. Popular spots, moreover, tend to be more expensive. This means you need a more substantial initial investment, but you will also get higher returns.
In contrast, you can focus on economic centers where people move to find a well-paid job. Another alternative is cities with good schools where families with children seek quality education.
Recommended Reading: Start Investing In Stocks With Little Money
Th Place In Population Growth Tampa Florida
Tampa Florida takes 5th place in the percentage of growth since 2000, with a rate of 27%. Tampa has a cost of living score of 95.8, ranking 8th most affordable city on our list of best places to invest in Real Estate. Tampa, on the gulf coast, is home to Floridas largest seaport. The international airport offers nonstop service to 90 plus domestic and international destinations.
Tampa is home to 20 corporate headquarters with over $1 billion in annual revenue, eight of which are Fortune 1000 companies. 500 foreign-owned companies representing more than 40 nations are established in the city.
Florida has no state income tax. Though humid, temperatures have never exceeded 90 degrees. Many investors looking to build their wealth are looking to Tampa for investment opportunities.
Appreciation Of Property Value
Having a rental property lets you hold on to it once its value appreciates. It gives you the option to sell it off at the right moment. The appreciations amount can vary from one market to another.
Look into the potential of appreciation in different neighborhoods and cities to set your expectations.
You May Like: How To Invest With Little Money In Real Estate
