![US Cities With The Best ROI On Investment Properties | citybiz (1) US Cities With The Best ROI On Investment Properties | citybiz (1)](data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==)
- Houma, Louisiana comes out as the US city with the highest ROI for property investors
- Dothan, Alabama and Johnstown, Pennsylvania take second and third
- States of Illinois and Louisiana both feature two cities in the top ten
Research has revealed the US cities where properties offer the best proportional Return on Investment (ROI).
Real estate experts at Agent Advice analyzed home value and typical rent prices across the US cities to establish where investors can currently expect the highest ROI.
Zillow Housing Value Index (ZHVI) indicates the typical housing value in a given geography, and Zillow Observed Rent Index (ZORI) measures asking rent prices. This study uses these measures to establish places with the highest rental values, compared proportionally to the cost of a property.
- Houma, LA
Houma, located in Louisiana’s Bayou country just 55 miles from New Orleans, is the US city with the highest expected ROI. The housing value index indicates the typical property value to be $149,871, while the observed rent index puts the average cost of rent at $1,441.
Rent equates to 0.96% of property value, meaning the payback period on a typical investment property down payment (20%) could be as short as 20.8 months. This is almost half the national average payback period of 39.6 months.
- Dothan, AL
Dothan, in Southern Alabama, comes out second in the list with a typical property value of $166,459. An average monthly rental price of $1,553 means that rent equates to 0.93% of property value.
The potential payback period for the down payment on an investment property here sits at 21.43 months.
- Johnstown, PA
The largest city in Cambria County, and just 57 miles east of Pittsburgh, Johnstown offers the third highest ROI in the US.
A low housing value index of just $83,114, accompanied by an observed rental index of $766 means that rent equals 0.92% of property value. The payback period for a 20% down payment on a property here could be as short as 21.68 months.
- Beckley, WV
Beckley of Raleigh County, West Virginia has a typical property value of $116,252. The observed rental index of $1,000 is equivalent to 0.86% of property value and makes for a typical investment down payment payback period of 23.25 months.
- Decatur, IL
Decatur, the largest city in Macon County and situated along the eponymous lake in Central Illinois, makes fifth on the list. Typical property value sits at just $94,537 and a typical rental price, 0.86% of this at $808. This makes for a potential down payment payback period also just short of two years at 23.39 months.
- Shreveport, LA
The third most populous city in Louisiana, Shreveport has a housing value index of $152,712. With an observed rent index of $1,256 equating to 0.82% of property value, the payback period on a typical down payment comes in at 24.32 months.
- Peoria, IL
A few hours out of Chicago, Peoria has a typical property value of $135,229. Observed rent index also equates to 0.82% of property value at $1,110, again making for a possible down payment payback period of just 24.35 months.
- Sumter, SC
Just 40 miles east of state capital Columbia, Sumter, South Carolina, ranks eighth for ROI in the US. With a typical property value coming in at $163,176 and observed rent index equalling 0.82% of this at $1,337. The potential payback period on a down payment here is 24.4 months.
- Texarkana, TX
Straddling the border of Texas and Arkansas, Texarkana makes the penultimate top ten spot for ROI on property. Typical property value lies at $148,518 while the observed rental index of $1,212 equates to 0.82% of this.
- Jackson, TN
Jackson, Tennessee is the final city in the ROI top ten. Located 70 miles east of Memphis, the city has a typical housing value of $170,667. Observed rent index in the city is $1,387, or 0.81% of property price.
Rank | City | Ave. home value ($) | Observed rent value ($) | Rent as % of value | Payback period on 20% down payment (months) |
| National Average | 319,325.99 | 1,562.89 | 0.53 | 39.64 |
1 | Houma, LA | 149,871.66 | 1,441.39 | 0.96 | 20.80 |
2 | Dothan, AL | 166,459.92 | 1,553.33 | 0.93 | 21.43 |
3 | Johnstown, PA | 83,114.14 | 766.67 | 0.92 | 21.68 |
4 | Beckley, WV | 116,252.50 | 1,000.00 | 0.86 | 23.25 |
5 | Decatur, IL | 94,537.33 | 808.33 | 0.86 | 23.39 |
6 | Shreveport, LA | 152,712.70 | 1,256.08 | 0.82 | 24.32 |
7 | Peoria, IL | 135,229.02 | 1,110.83 | 0.82 | 24.35 |
8 | Sumter, SC | 163,176.76 | 1,337.50 | 0.82 | 24.40 |
9 | Texarkana, TX | 148,518.34 | 1,212.25 | 0.82 | 24.50 |
10 | Jackson, TN | 170,667.30 | 1,387.76 | 0.81 | 24.60 |
As well as the top cities for ROI, the study established the cities at the other end of the scale. With generally higher property values drastically increasing payback periods, here are the ten cities with the least desirable ROI.
- San Jose, CA
Silicon Valley’s San Jose has a huge typical property value of $1,428,238. While observed rent of $3,289 would ordinarily be seen as large, it equates to only 0.23% of home value here. A 20% down payment on a property would take as long as 87.46 months, which is over seven years.
- Missoula, MT
The city of Missoula in western Montana sees property values averaging $519,169, and rental rates of $1,353. With rent equating to 0.26% of property value, the potential payback period comes in at 76.71 months, almost six and a half years.
- San Francisco, CA
The commercial, financial, and cultural center of California, San Francisco, comes in as the place averaging the third worst property ROI in the US. Typical property value sits at $1,116,046 with rent at $3,121. This makes observed rent just 0.28% of property price and a down payment payback period of 71.5 months.
- Logan, UT
Logan, Utah, is just 80 miles outside of the state capital, Salt Lake City. It has a typical home value of $429,880 and asking rent of $1,266. This rent equates to 0.29% of property values and makes for a down payment payback period at 67.89 months.
- Boulder, CO
Boulder, located in the foothills of the Rocky Mountains, has a typical property value of $747,964 and rent comes in at $2,229, 0.30% of total value. This makes for a potential down payment payback period of 67.08 months.
Rank | City | Ave. home value ($) | Observed rent value ($) | Rent as % of value | Payback period on 20% down payment (months) |
1 | San Jose, CA | 1,438,238.28 | 3,289.09 | 0.23 | 87.46 |
2 | Missoula, MT | 519,169.72 | 1,353.53 | 0.26 | 76.71 |
3 | San Francisco, CA | 1,116,046.39 | 3,121.83 | 0.28 | 71.50 |
4 | Logan, UT | 429,880.66 | 1,266.33 | 0.29 | 67.89 |
5 | Boulder, CO | 747,964.25 | 2,229.92 | 0.30 | 67.08 |
6 | Santa Cruz, CA | 1,120,336.91 | 3,364.18 | 0.30 | 66.60 |
7 | Urban Honolulu, HI | 861,629.11 | 2,704.70 | 0.31 | 63.71 |
8 | Salinas, CA | 782,510.09 | 2,493.60 | 0.32 | 62.76 |
9 | Salt Lake City, UT | 538,019.73 | 1,720.94 | 0.32 | 62.53 |
10 | Seattle, WA | 691,947.88 | 2,223.02 | 0.32 | 62.25 |
Chris Heller, co-founder of Agent Advice commented on the findings: “It’s certainly interesting to see which real estate markets are currently showing as strong investments. With this top ten revealing some of the best cities for rental property investment, investors and realtors should keep their eyes on these cities for strong growth”
FAQs
Investors probably need no explanation why and convincing that Florida tops the list of the best states for the long term rental investment strategy. Our nationwide rental market analysis shows that, on average, you can expect the highest rate of return in the Sunshine State.
What city has the highest return on investment? ›
Rank | City | Return on Investment (%) |
---|
1 | Saint Petersburg | 31.1 |
2 | Hokkaido | 24.8 |
3 | Budapest | 23.8 |
4 | phu*ket | 22.3 |
46 more rowsFeb 21, 2020
What type of real estate investment has the highest ROI? ›
Commercial real estate is known to yield higher returns than residential real estate. If you can afford to manage a commercial space, it can prove lucrative over time, depending on your area. The value of commercial real estate is determined in part by how much revenue it generates.
What is a good ROI for investment property? ›
Generally, a good ROI for rental property is considered to be around 8 to 12% or higher. However, many investors aim for even higher returns. It's important to remember that ROI isn't the only factor to consider while evaluating the profitability of a rental property investment.
What state has the best housing market 2023? ›
Texas replaced California in 2023 as the strongest housing market by state. With an existing home inventory of 83,222, the available houses for sale have more than doubled since last year. It has seen a drop of about 6% in new construction and is now at 248,648 since 2022.
Where is real estate growing the fastest? ›
U.S. metros with the biggest increases in home values in 2022
| Metro area | Growth |
---|
1. | FarmingtonNew Mexico | 20.3% |
2. | North Port-Sarasota-BradentonFlorida | 19.5% |
3. | Naples-Immokalee-Marco IslandFlorida | 17.2% |
4. | Greensboro-High PointNorth Carolina | 17% |
11 more rowsFeb 13, 2023
Where do most billionaires invest their money? ›
Securities
Common types of securities include bonds, stocks and funds (mutual and exchange-traded). Funds and stocks are the bread-and-butter of investment portfolios. Billionaires use these investments to ensure their money grows steadily.
Where do most billionaires invest? ›
Here are the the top 10 biggest industries for billionaires in 2023:
- #2. Manufacturing. ...
- #3. Technology. ...
- #4. Fashion & Retail. ...
- #5. Food & Beverage. ...
- #6. Healthcare. 201 billionaires | 8% of list. ...
- #7. Real Estate. 193 billionaires | 7% of list. ...
- #8. Diversified. 187 billionaires | 7% of list. ...
- #9. Energy. 100 billionaires | 4% of list.
What is the safest investment with the highest return? ›
High-quality bonds and fixed-indexed annuities are often considered the safest investments with the highest returns. However, there are many different types of bond funds and annuities, each with risks and rewards. For example, government bonds are generally more stable than corporate bonds based on past performance.
Do most millionaires invest in real estate? ›
Some of the most successful entrepreneurs in the world have built their wealth through real estate. In fact, it's estimated that 90% of all millionaires invest in some form of real estate. There are several reasons for this, but in today's article, we'll share seven reasons why millionaires invest in real estate.
What Types of Commercial Properties Are the Most Profitable? High-Tenant Properties – Typically, properties with a high number of tenants will give the best return on investment. These properties include RVs, self-storage, apartment complexes, and office spaces.
How do you guarantee 10 percent return on investment? ›
Where can I get 10 percent return on investment?
- Invest in stock for the long haul. ...
- Invest in stocks for the short term. ...
- Real estate. ...
- Investing in fine art. ...
- Starting your own business. ...
- Investing in wine. ...
- Peer-to-peer lending. ...
- Invest in REITs.
What is the 2 rule for investment property? ›
2% Rule. The 2% rule is the same as the 1% rule – it just uses a different number. The 2% rule states that the monthly rent for an investment property should be equal to or no less than 2% of the purchase price. Here's an example of the 2% rule for a home with the purchase price of $150,000: $150,000 x 0.02 = $3,000.
Is 7% ROI on rental property good? ›
A good ROI for a rental property is typically more than 10%, but 5%–10% can also be acceptable. But the ROI may be lower in the first year, due to the upfront costs of buying a home. A fixer-upper may offer more upfront savings as their average list price is 25% lower than turnkey homes.
What is the Invest 70% rule in real estate? ›
The 70% rule can help flippers when they're scouring real estate listings for potential investment opportunities. Basically, the rule says real estate investors should pay no more than 70% of a property's after-repair value (ARV) minus the cost of the repairs necessary to renovate the home.
Where is the hottest real estate market in the US? ›
The personal finance website ranked the top most attractive and active housing markets and found that Gainesville, Georgia, was No. 1.
Where is the hottest housing market in the US? ›
A midsize town in Georgia about 75 minutes by car from Atlanta is the nation's hottest real estate market, as a tide of renters flee pricey cities in search of homes in more affordable places. That's the takeaway from a new Bankrate analysis of nearly 200 housing markets around the country.
What are the hottest real estate cities in the US? ›
The hottest housing markets include those markets in North Carolina, Colorado and Texas that were also popular during the pandemic, including Raleigh and Durham, Denver and Austin. Markets to watch that improved the most between November and December 2022 include Portland, Oregon, Richmond, Virginia, and St.
Where real estate prices are cooling the fastest in the US? ›
Home prices in some US cities are finally cooling, with Seattle's housing market slowing faster than any other in the country. The 10 fastest-cooling markets are almost entirely in the West, with Seattle, Las Vegas, and the three California cities of San Jose, San Diego and Sacramento leading the way.
What is the fastest growing city in the US? ›
The Villages, FL metro area was the fastest-growing U.S. metro area between 2021 and 2022, increasing by 7.5%.
Some of the most popular banks for millionaires and billionaires include JPMorgan Chase, Bank of America, and UBS. Other examples of banks that may be popular among the ultra-rich include: Private banks: Private banks are banks that offer specialized financial services to high net worth individuals and families.
Where do millionaires keep cash? ›
Examples of cash equivalents are money market mutual funds, certificates of deposit, commercial paper and Treasury bills. Some millionaires keep their cash in Treasury bills. They keep rolling them over to reinvest them and liquidate them when they need the cash.
What do super rich invest in? ›
Ultra-wealthy individuals invest in such assets as private and commercial real estate, land, gold, and even artwork. Real estate continues to be a popular asset class in their portfolios to balance out the volatility of stocks.
Can you keep millions of dollars in your bank account? ›
Can You Keep Millions in the Bank? Keeping large amounts of money in a bank can be tricky, but it is possible. There are limits to the amount of money that is insured for each depositor at a bank — up to $250,000 per depositor with the FDIC — so the super wealthy often spread out their accounts over multiple banks.
Where does Jeff Bezos keep his money? ›
Jeff Bezos' net worth is $139 billion as of May 2023, making him the third-richest person in the world. Bezos is the founder and former chief executive officer (CEO) of Amazon. He remains the executive chair of the company. He holds traditional investments, such as real estate, and shares in other companies.
Do billionaires use credit cards? ›
Wealthy Americans generally use credit cards the same way that everyone else does. They opt for cash back and no annual fee cards, and generally trust the big issuers.
What is the best safe investment right now in the USA? ›
Here are the best low-risk investments in May 2023:
Series I savings bonds. Short-term certificates of deposit. Money market funds. Treasury bills, notes, bonds and TIPS.
What is the #1 safest investment? ›
What are the safest types of investments? U.S. Treasury securities, money market mutual funds and high-yield savings accounts are considered by most experts to be the safest types of investments available.
Should a 70 year old be in the stock market? ›
Seniors should consider investing their money for several reasons: Generate Income: Investing in income-generating assets, such as stocks, bonds, or real estate, can provide a steady income stream during retirement. This can be especially important for seniors who no longer receive a regular paycheck from work.
Why real estate creates 90% of millionaires? ›
Because of the many tax benefits, real estate investors often end up paying less taxes overall even as they are bringing in more income. This is why many millionaires invest in real estate. Not only does it make you money, but it allows you to keep a lot more of the money you make.
Each real estate office sets its own standards for top producers, but it's safe to say that a top producer would have to sell at least one home per month to qualify. Top producers earn around $112,610 a year to start, according to the BLS. 1 Mega-stars could earn $500,000 per year and up.
How are 90% of millionaires made? ›
Andrew Carnegie, one of the wealthiest entrepreneurs of all time, once said that 90% of all millionaires. become so through owning real estate.
Where are the rich buying property? ›
A new report found that New York City is the no. 1 place for ultra-high-net-worth individuals to own a property. New York City isn't just the city that never sleeps. It's also the most popular place in the country for the 'super-rich.
How many properties do I need to be a millionaire? ›
To become a real estate millionaire, you may have to own at least ten properties. If this is your goal, you need to accumulate rental properties with a total value of at least a million.
How many properties does the average millionaire have? ›
How Many Properties Does the Average American Millionaire Own? Although many people imagine millionaires owning various properties, the average American millionaire prefers to own only one property (43%), with only 8.5% of the millionaire in the U.S owning four properties or more.
Is 12% return on investment realistic? ›
What you really need to care about is how your investments perform over the span of many years. And based on the history of the market, 12% is not some magic, unrealistic number. It's actually a pretty reasonable bet for your long-term investments.
Is 10% return realistic? ›
Most investors would view an average annual rate of return of 10% or more as a good ROI for long-term investments in the stock market. However, keep in mind that this is an average. Some years will deliver lower returns -- perhaps even negative returns. Other years will generate significantly higher returns.
Can you get 20% return on investment? ›
A 20% return is possible, but it's a pretty significant return, so you either need to take risks on volatile investments or spend more time invested in safer investments.
What is the 25 rule in real estate? ›
To calculate how much house you can afford, use the 25% rule—never spend more than 25% of your monthly take-home pay (after tax) on monthly mortgage payments.
What is the 50% rule in real estate investing? ›
The 50% rule in real estate says that investors should expect a property's operating expenses to be roughly 50% of its gross income. This is useful for estimating potential cash flow from a rental property, but it's not always foolproof.
Savvy real estate investors often pay no more than 100 times the monthly rent to purchase a property. In the case of the couple above, an investor following the 100 times monthly rent rule wouldn't pay more than $750,000 because the monthly market rent was $7,500.
What is a good monthly profit from a rental property? ›
The amount will depend on your specific situation, but a good rule of thumb is to aim for at least 10% profit after all expenses and taxes. While 10% is a good target, you may be able to make more depending on the property and the rental market.
What is the ROI in Tennessee? ›
The average rental income is about $1,200 and the average ROI is a whopping 10%. The median property price is one of the lowest in the state, at just $69,900.
What is the average cash flow on a rental property? ›
The Bottom Line
Keep in mind, when it comes to real estate cash flow, calculating your expenses and rental property income will be your number one key to success. Anything around 7% or 8% is the average ROI. However, if you'd really like to succeed, you should always aim higher at around 15%.
What is the rule of 35 in the real estate? ›
By law, lenders can't underwrite the loan unless they can determine the borrower will be able to pay up the loan. The whole idea behind the 35-percent rule of thumb is this: a borrower can afford no more than 35% of its monthly take-home pay.
What is the 5% rule investing? ›
In investment, the five percent rule is a philosophy that says an investor should not allocate more than five percent of their portfolio funds into one security or investment. The rule also referred to as FINRA 5% policy, applies to transactions like riskless transactions and proceed sales.
What is the 5 and 2 real estate rule? ›
The 2-out-of-five-year rule states that you must have both owned and lived in your home for a minimum of two out of the last five years before the date of sale. However, these two years don't have to be consecutive, and you don't have to live there on the date of the sale.
What state makes more money in real estate? ›
The following are the 10 states where real estate agents earn, on average, the most money: New York: $111,800 (average real estate agent salary) Massachusetts: $84,180. Connecticut: $79,780.
What state is the highest to buy a house? ›
1. Hawaii. Hawaii is known for its beautiful beaches, warm climate, and breathtaking scenery. However, it is also the most expensive state to buy a house, with a Zillow Home Value Index of $834,582.
What states are best for landlords? ›
Top 12 Landlord-Friendly States in the U.S. in 2023
- Texas. With high demand for rental properties, cities that are drawing in younger populations, and favorable rental property laws, Texas is considered among the best states for real estate investing. ...
- Alabama. ...
- Indiana. ...
- Colorado. ...
- Florida. ...
- Arizona. ...
- North Carolina. ...
- Illinois.
All of the data below comes from the Census Bureau's 2021 1-year American Community Survey (ACS) Estimates. Hawaii has the lowest property tax rate in the U.S. at 0.27%. The Aloha state has a home median value of $722,500.
What is the best state to make lot of money? ›
This statistic shows the best states to make living in the United States in 2019. In 2019, Wyoming was ranked as the best state to make a living in the United States, with the cost of living index at 90.5 value and the median income of 40,240 U.S. dollars.
Do most millionaires do real estate? ›
Some of the most successful entrepreneurs in the world have built their wealth through real estate. In fact, it's estimated that 90% of all millionaires invest in some form of real estate. There are several reasons for this, but in today's article, we'll share seven reasons why millionaires invest in real estate.
Which cities do real estate agents make the most money? ›
Real estate agents in high cost of living cities such as New York and San Francisco tend to be the highest earners.
Where are the best states to buy a property? ›
10 best states for first-time homebuyers plus key factors
Rank | State | 1-year home price change: 2021–2022 |
---|
1 | Pennsylvania | 4.1% |
2 | North Carolina | 10.1% |
3 | Utah | 5.8% |
4 | Kentucky | 7.2% |
6 more rowsMar 2, 2023
What state sells houses the fastest? ›
California leads the nation for fastest home sales, with the average property snapped up in just 52 days. Compare that to Vermont, the slowest of all 50 states, where it takes nearly half a year — 161 days on average — just to lock down a buyer.
What state has the most unaffordable housing? ›
According to worldpopulationreview.com, Hawaii is the most expensive state to live in, with its housing costing three times the national average. New York and California rank as the second and third most expensive states in which to live, respectively.
What state has the highest rent burden? ›
California has more rent-burdened tenants than anywhere in the United States, according to a new report by the O.C. Register. It's more proof that California desperately needs to end statewide rent control restrictions – and allow localities to create new or expanded rent control policies.
Where is the best place to be a landlord? ›
Based on the factors above, we've put together a list of 10 of the best states to be a landlord in 2022.
- Indiana. The price-to-rent ratio in Indiana is one of the most favorable in the country. ...
- Kentucky. ...
- Arizona. ...
- Texas. ...
- Alabama. ...
- Florida. ...
- Georgia. ...
- Illinois.
Why is Florida a landlord friendly state? ›
Despite not having an extremely low rate, Florida is still a landlord-friendly state due to its favorable security deposit and eviction laws. There are no state-wide rent control ordinances in Florida. Like in all other states, landlords in Florida cannot increase rent if a tenant is on a standard fixed-term lease.
Unfortunately, there are no states without a property tax. Property taxes remain a significant contributor to overall state income. Tax funds are used to operate and maintain essential government services like law enforcement, infrastructure, education, transportation, parks, water and sewer service improvements.
What state has no income tax and lowest property tax? ›
Which Are the Tax-Free States? As of 2022, Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming are the only states that do not levy a state income tax. Note that Washington does levy a state capital gains tax on certain high earners.
Which cities have lowest property taxes? ›
Honolulu had the lowest effective property tax rate in 2022.
This feature is powered by text-to-speech technology.