If you're considering investing in real estate, buying a rental property can be a lucrative option. However, choosing the right location is crucial for success. In this article, we'll explore the best places to buy a rental property in 2022 based on affordability, appreciation, rental income, population growth, and tenant payment behavior.
1. Columbus, Ohio
Ranked as the number one place to invest, Columbus, Ohio offers a lower cost of living, vibrant downtown neighborhoods, and a strong economy fueled by Ohio State University. It has attracted remote workers and transplants from more expensive areas, making it an ideal choice for real estate investors. Columbus ranked highly for investment appreciation and rental income growth, and 90% of renters in the city paid their rent on time in 2021.
- Best place to invest index score: 87.8
- Median purchase price: $217,100
- Median rental listing price: $1,540
- Rental listing price growth: 4%
2. Orlando-Kissimmee-Sanford, Florida
The Greater Orlando area in Florida is not just a popular tourist destination; it's also a thriving rental market. With attractions like Walt Disney World and Universal Studios, the region has seen a steady influx of new residents. Additionally, Florida's lower property taxes and absence of personal income tax make it attractive for investors. Orlando ranked highly for investment appreciation and rental income growth.
- Best place to invest index score: 86.2
- Median purchase price: $216,600
- Median rental listing price: $1,380
- Rental listing price growth: 3.6%
3. Las Vegas-Henderson-Paradise, Nevada
Las Vegas offers a moderate winter climate, a tourism-driven economy, and affordable housing compared to neighboring cities like Los Angeles and San Diego. The demand for rental properties remains high as many first-time homebuyers and non-investors have been forced to continue renting due to local competition. Las Vegas ranked well for rental income growth and presents a viable opportunity for real estate investors.
- Best place to invest index score: 85.3
- Median purchase price: $205,800
- Median rental listing price: $1,174
- Rental listing price growth: 2.7%
4. Raleigh, North Carolina
Raleigh, North Carolina, part of the Research Triangle, has experienced explosive population growth in recent years. Known for its universities, green spaces, and thriving culinary scene, Raleigh attracts young and educated residents. The city ranked highly for both investors and homeowners and had a high percentage of on-time rent payments in 2021.
- Best place to invest index score: 84
- Median purchase price: $220,600
- Median rental listing price: $1,162
- Rental listing price growth: 1.4%
5. Tampa-St. Petersburg-Clearwater, Florida
The Tampa Bay area on Florida's Gulf Coast offers coastal living, warm weather, and a booming rental market. Real estate investors have been particularly active in the region, and rent prices have surged significantly. With lower-than-average state property taxes and no personal income tax, Tampa-St. Petersburg-Clearwater is an attractive choice for real estate investment.
- Best place to invest index score: 83
- Median purchase price: $364,200
- Median rental listing price: $1,287
- Rental listing price growth: 4.4%
6. Austin-Round Rock-Georgetown, Texas
The Greater Austin area in Texas has experienced substantial population growth, attracting tech companies and transplants from all over the country. The demand for housing remains high, and rent prices have surged in recent months. With a large percentage of residents being renters, investing in rental properties in Austin can be a promising opportunity.
- Best place to invest index score: 80.8
- Median purchase price: $360,100
- Median rental listing price: $1,476
- Rental listing price growth: 1.1%
7. Denver-Aurora-Lakewood, Colorado
Denver, Colorado, with its mix of outdoor recreation and city culture, has become a popular destination for newcomers. The rental market in Denver has seen significant growth, with over half of the homes in the city being occupied by renters. The area presents opportunities for real estate investors looking for rental income growth.
- Best place to invest index score: 80.7
- Median purchase price: $374,400
- Median rental listing price: $1,712
- Rental listing price growth: 4.7%
8. Atlanta-Sandy Springs-Roswell, Georgia
The real estate market in metropolitan Atlanta has thrived due to population growth, job opportunities, and affordability. However, the supply of housing is low, especially for single-family homes. With a large percentage of renters, Atlanta presents investment opportunities for landlords. The market is projected to show steady price growth, making it an attractive location for real estate investors.
- Best place to invest index score: 80
- Median purchase price: $269,000
- Median rental listing price: $1,364
- Rental listing price growth: 3.3%
9. Boston-Cambridge-Newton, Massachusetts/New Hampshire
Greater Boston is known for its higher education institutions, healthcare, and finance industries. The area attracts both students and affluent professionals, creating a strong rental market. As renters return to tech-based cities, rent prices in Boston have increased significantly. Despite being a pricier area, the Greater Boston region offers a promising opportunity for rental property investment.
- Best place to invest index score: 80
- Median purchase price: $1,012,400
- Median rental listing price: $3,491
- Rental listing price growth: 7.7%
10. Riverside-San Bernardino-Ontario, California
Located in the "Inland Empire" of California, the Riverside-San Bernardino-Ontario metro area offers affordable housing options and easy access to transportation and manufacturing hubs. The region has seen significant rent increases, attracting renters and homebuyers from neighboring cities. With a competitive rental market, investing in rental properties in the Riverside area can be a wise choice.
- Best place to invest index score: 79
- Median purchase price: $392,000
- Median rental listing price: $1,383
- Rental listing price growth: 2.9%
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Metrics used: Data is based on Realtor.com®’s 2021 median purchase price and annualized growth, Avail 2019-2021 median rental listing prices with annualized growth, 2018-2019 U.S. Census population growth data, and Avail data showing the share of tenants who paid their rent by the end of each month in 2021. The analysis considered the 50 largest metro areas in the U.S. Rankings were determined based on index score, investment affordability, investment appreciation, rental income, rental income growth, population growth, and share of on-time rent payments.
