Real estate investment is one of the most common strategies for building wealth outside of a primary occupation. It can be very lucrative since properties tend to increase in value over time naturally. Then, if you choose to upgrade them, rent them out, or sell them, you can make significant returns as a real estate investor.
While there is no perfect formula for someone looking to invest in real estate, one of the most important decisions you will make is where to invest in property. Some markets are more successful than others and provide great opportunities for real estate investors to make money while others are not as lucrative. Here are some of the best cities to invest in real estate if you want to start building wealth for a brighter future.
Tampa, Florida
Tampa, Florida is a prime location for real estate investment. Home values are growing at a favorable rate, with the current median sale price of a home sitting at $401,000. There are many advantages for real estate investors in this city, primarily because of the favorable tax benefits.
In Florida, there is no individual income tax, so you get to keep more of the money you make from rental income. Additionally, the robust job market continues to grow along with the population, indicating a strong economy. These characteristics combine to create a very strong rental market.
Those interested in short-term rentals will find a lot to love about Tampa tourism. For example, Tampa’s Pride festival is held in March, right around Spring Break; this drew in over 90,000 tourists last year, many of which intended to stay overnight. Other major festivals celebrating Tampa’s diverse culture include Chinese New Year, the Tampa Bay Caribbean Carnival, and the AAPI Heritage Festival.
Tampa Real Estate Market Trends
Tampa real estate trends present a great outlook for real estate investors. 501 homes were sold in April of 2024, and homes often sell within 32 days of being listed in this attractive, stable real estate market. This demonstrates a strong buying and selling rhythm for both residential and commercial properties. Additionally, thousands of people are moving to Tampa each year, especially from NYC, D.C., and Chicago, making it the fastest-growing city on this list.
Atlanta, Georgia
The city of Atlanta, Georgia is another hotspot for real estate investors. The area features a strong and diverse economy in many industries, which means job-seekers from every major sector can build a successful life in this attractive market.
The vacancy rate is very low and there is high demand for single-family home rentals. With a median home sold price of $415,500, these homes are very affordable for real estate investment. One of the major advantages for Atlanta real estate investors is the low property tax rate, which is only calculated for 40% of a home’s fair market value.
The business-friendly environment in this city makes it an ideal location for commercial and residential properties. Additionally, the city’s transportation system, the MARTA, is very robust, making it easy for people to head downtown from the nearby suburbs.
Atlanta is a huge hub for LGBTQ+ tourism, hosting numerous events throughout the year; this includes the Black Gay Pride Celebration on Labor Day and Atlanta Pride Festival in October. This is in addition to one of the largest LGBTQ+ populations per capita in the United States and an incredibly diverse population; it’s the second largest Black majority metropolitan area in the nation.
Atlanta Real Estate Trends
Home values are increasing quickly in Atlanta and have risen 6.6% since this time last year. In April of this year, 754 homes were sold, so that alone shows how healthy the city’s real estate market is. Popular homes can sell within 14 days of being on the market for an average of 1% above their listing prices.
Charlotte, North Carolina
Charlotte, North Carolina is well known for its quality schools, vibrant culture, and diverse communities. This makes it an attractive option for real estate investors. There is also a ton of growth in the financial sector, so both residential and commercial properties hold up a stable market.
Many young professionals are moving to the area as well as young families because of the low crime rates, so rental properties are thriving. Additionally, many LGBTQ+ individuals have found Charlotte to be a safe and affordable place to live due to its high rankings on the Municipal Equality Index, drawing in more young professionals who want to live in an inclusive environment.
The median home sold price is about $432,000, so it is still a very affordable housing market to start investing in.
Charlotte Real Estate Trends
Charlotte home prices have ballooned 7% since this time last year, which is a sign of a strong economy. It is rated relatively competitive, so there is a balance between buyers and sellers. Plus, over a thousand homes were sold in April. This is good news for those who want to invest in real estate and sell when market value rises.
Orlando, Florida
For such a large city, the median home sold price in Orlando, Florida may surprise you. It sits at a favorable $395,000. There are many reasons to invest in real estate in Orlando. First, home prices are very affordable. Second, this city has a thriving tourist industry, so the market for short-term rental properties is incredible.
Orlando has become incredibly popular with LGBTQ+ tourists and was one of the first major markets to recognize the value of same-sex and transgender tourism; its LGBTQ+ specific tourism advertising dates back to 1991. Come Out With Pride is held in October due to the hot summer weather, but you can also find celebrations like One Magical Weekend and Gay Days in June that draw in thousands of tourists every year.
Services like Airbnb have tons of hosts in the area who have made stable rental income from travelers. Additionally, the lack of a state income tax is very appealing to real estate investors who want to hang onto their profits.
You could even purchase a bit further out near Silver Springs State Park in Silver Springs, FL, in order to attract nature lovers who want to be close to the many attractions in Orlando. Other options nearby include Ocala, FL, which is home to the Ocala Regional Medical Center, known for its bariatrics and cancer treatment centers.
Orlando Real Estate Market Trends
Orlando is one of the fastest-growing markets in terms of home values. Prices have grown by a whopping 12.3% since last year, so buying now will get you in on this strengthening housing market. Homes typically sell in less than a month, so house flippers or investors who want to offload properties won’t have to wait long for competitive offers on their homes. Orlando real estate trends present a very positive outlook for savvy investors.
Those looking for options nearby will not be disappointed, either. Ocala real estate trends are a bit cheaper than downtown Orlando, at around $279,999 but are growing at a respectable rate of 1.8% per year, suggesting great interest.
Dallas, Texas
Texas is one of the most business-friendly states in the entire country. Hundreds of businesses are migrating their headquarters to the Lone Star State every year, especially in the Dallas area and in industries like technology, finance, major healthcare providers, and manufacturing.
The growing job market attracts many young professionals and families, plus the unique culture of Texas makes it an appealing place to visit for travelers.
The median home sold price is $390,000, so it is very affordable for most real estate investors. Population growth is also stimulating the economy even further, making the right real estate investment a low-risk venture.
Dallas is growing increasingly diverse as well; the Hispanic population has grown by an incredible 108% in the last 22 years, which bodes well for those who would like to ensure affordable housing for BIPOC renters.
While Texas is often thought of as an unwelcoming place for LGBTQ+ individuals, Dallas itself has many events that bring in gays, lesbians, bisexuals, and transgender individuals from across the country – many of whom will want to stay the night. For example, the Dallas Pride Parade is one of the largest LGBTQ+ events in the entire state; approximately 60,000 people visit each year.
Dallas Real Estate Market Trends
The average home in Dallas sells for only 2% below listing, which means property owners are able to get the deals they want. Plus, with home values climbing 9.4% since last year, there is money to be made through real estate investments.
Nashville, Tennessee
Demand for real estate is high in the city of Nashville. The population has been growing steadily for years, resulting in more properties being built, especially in suburban areas. If you want to invest in real estate, the city with a thriving music scene is a great place to start. Plenty of workers are moving to the area, and with their families alongside them, they need places to live.
This is especially true because Nashville is one of the most LGBTQ-friendly areas in the South, especially for lesbians, gays, and bisexuals. Nashville was the only Tennessee city that ranked above the national average on the Municipal Equality Index, making it a bastion of protection for LGBTQ individuals across the state.
The median home in Nashville sells for about $475,000, so it is a little on the expensive side, but prices are growing steadily each year, so appreciation can make the real estate investment worth it.
Nashville Real Estate Market Trends
Nashville prices have also grown significantly in the last year, with an increase of 11.5%. Your investment property can quickly build equity with these kinds of numbers. The cost of living is 1% lower than the national average, so expenses as a property owner will be very manageable even if the property costs a little more.
Austin, Texas
Returning to Texas for round two. We now head to Austin, which has become a hub for major tech companies in the business world. World-class food, music, and art are adding to the appeal of this city as thousands flock to the area each year. This has created more demand for living spaces, making Austin one of the best cities to invest in real estate.
Additionally, Austin is one of the most socioeconomically diverse cities in the country and also ranks in the top 50 municipalities for cultural diversity. This makes it an attractive market for investors because price points across the board can work here depending on what you intend to purchase.
In terms of LGBTQ+ people, Austin is one of the most liberal cities in Texas and recently passed specific protections for transgender people, bucking the overall trend in the state. Its Pride Festival draws an incredible 400,000 people per year, representing a huge boost for short-term rentals.
The median sold home price is $527,400, which reflects the rapid growth of the Austin housing market. The city’s primary industries all have bright futures, such as clean technology, advanced manufacturing, and data management. It has also adopted a smart city initiative, making progress and efficiency the focus of its development.
Austin Real Estate Market Trends
Austin real estate trends are very attractive for potential investors in both residential and commercial properties. The thriving job market makes many commercial properties a safe bet if you have the resources. For homes, prices continue to climb each year. Almost a thousand homes were sold in April, indicating a good relationship between buyers and sellers. Residents from Los Angeles, San Francisco, and Dallas were the biggest population movers to take advantage of the diverse job market in Austin.
Raleigh, North Carolina
We’ll head back to North Carolina for the next entry on this list, Raleigh. One of the most impressive indicators of job growth in this area is Research Triangle Park, which is the largest research and development establishment in the country.
More than 300 companies and 60,000 workers use this park as their home base, contributing to Raleigh’s thriving start up culture and strong job market. Large universities like Davidson, Duke, and UNC are driving demand for housing as well with the large student population.
It is also an ethnically diverse area; each of its BIPOC communities, including Hispanic, Asian, Native America, and Black individuals, have grown by over 90% since 2000. Raleigh ranks high in equality for LGBTQ+ individuals, which also encourages population movement.
Quality of life and educational opportunities have made Raleigh one of the top-rated cities to move to in the country. The affordable real estate prices are the cherry on top for investors, with a median home sold price of $453,000.
Raleigh Real Estate Market Trends
Raleigh is one of the most competitive markets on this list. Redfin rates it as a 76 out of 100, which means it is very competitive. The average home goes pending in around 15 days and prices have risen 9% in the past year [16]. As real estate investing goes, that is a lot of demand that can lead to significant income potential.
Phoenix, Arizona
If a warm climate and tourism hotspot is your goal for a real estate investment, then it is tough to beat Phoenix, Arizona. It’s close to one of the greatest wonders of the world, the Grand Canyon, as well as other popular spots like the Hoover Dam and the Petrified Forest.
This makes it an ideal location for vacation rental properties, especially those appealing to LGBTQ+ visitors. Approximately 50,000 people visit Phoenix Pride each year, and the city has the ninth-largest population of same-sex couples in the US. High diversity, with about equal concentrations of Latino and white residents, also makes it feel safe and inclusive for both long-term residents and short-term guests.
However, the strong job market and relatively affordable housing also make it appealing for a long-term rental property. In Phoenix, the median sale price is around $468,000. Suburban development is particularly strong in this area.
Phoenix Real Estate Market Trends
Inventory turnover is incredibly fast in Phoenix. Over 1,500 homes were sold in April this year, with the average home selling for no more than 2% below listing. Home prices in general have risen about 6.5% since last year. These indicators point to a favorable outlook if you plan to invest in real estate in this Southwestern city.
Indianapolis, Indiana
Job growth in Indianapolis, as well as the revitalized downtown, has turned it into a real estate hotspot, especially for investors. Sectors like technology and life sciences are growing rapidly, and the outlook for long-term property appreciation is very strong.
Indianapolis has a significant Black population, which constitutes approximately 28.8% of total residents; this helps attract those who want to live in a more diverse and multicultural area. Additionally, 4.6% of the population identifies as LGBTQ+, and around 35,000 people attended the Indy Pride Festival last year, bringing in thousands of dollars in tourism.
Median home sales are as low as $264,800, making it one of the most affordable housing markets on this list. There are also many local resources available to help investors get started, and the low property tax rate makes every property a more lucrative option.
Indianapolis Real Estate Market Trends
With lower home prices that have still managed to grow by 6.2% since last year, Indianapolis is one of the more competitive markets that still has an affordable cost for many homes.
For those who plan to invest in real estate, you can look forward to very short selling periods, with the average being only 11 days. Plus, there were well over a thousand home sales in April. The affordable housing compared to other cities, as well as the supply of properties, makes Indianapolis a perfect location as a small but growing city.
Factors to Consider for Real Estate Investors
Investing in real estate to build wealth has a number of benefits. Namely, it can be a very effective solution to prepare for retirement, improve your current lifestyle, or leave a greater legacy for your children. However, there is still plenty of risk if you choose to buy real estate investments. Let’s look at some factors that are important to consider before you purchase an investment property.
Budget and Financial Goals
The point of investing is to make money, but you need a solid plan for your finances to turn a profit. What is your budget for investing? Are you able to afford a property of your own or should you start smaller like investing in a real estate investment trust (REIT)? You should also look at your goals for this investment. Do you want some supplemental and passive income or do you want to pursue an entire rental property business? Budgeting and laying out your financial goals are crucial first steps.
It’s important to note that you will typically require a larger upfront investment than when purchasing a primary residence; most lenders will want at least a 20% down payment for an investment property. However, Pride Lending can assist you in finding additional opportunities to save money, including local, state, and national programs that are meant to encourage investment.
Risk Tolerance
What level of risk can you take on by getting involved in the rental market or another real estate opportunity? If money is tight, then you probably should not go all in on buying a property with all your savings and renting it out. In this case, it is probably better to consider an REIT. However, if you have a stable income and plenty of cash reserves, perhaps you can take that leap to buy a property and navigate the waters of property management yourself. Before you make any decisions, evaluate your finances to determine your risk tolerance.
Property Type (Single-Family Homes, Multi-Family Units, Commercial)
The type of property you plan to invest in should play a big role in the planning stage. Are you going to look for residential properties like single-family units or multi-family units to rent out to tenants? If you have more resources at your disposal and the local market is very friendly to businesses, would commercial real estate be a better option for your goals? You can always work with a real estate agent to discuss the options in your chosen market, whether it is one of the cities listed above or another community.
Rental Market Conditions and Vacancy Rates
The state of the rental market should always be your first priority when researching an area. You want to find a strong rental market that is appealing to young professionals, families, or even students. This will help ensure a low vacancy rate so that your rental income is stable. This should also play a role when you are coming up with rental pricing, as you do not want to price yourself out of the market or risk losing money on the investment.
Local Regulations and Property Taxes
Most local municipalities have some regulations to abide by as a property owner, particularly regarding rental properties. Being a landlord or property manager comes with certain responsibilities, so you need to be aware of the rules for those roles in the local area. Additionally, there are plenty of costs to keep in mind when you purchase and run a rental unit. One of those costs is property taxes.
The property tax rate is likely based on the various taxing units in your area, so before you close on a property, make sure you have an accurate idea of what property taxes will cost you each year.
Potential for Future Development and Infrastructure Projects
Location is one of the most important aspects when someone chooses to invest in real estate. Local market conditions, economic outlook, and population growth are all metrics that should be understood. However, another feature to look into is the future development of the area.
Are there big infrastructure projects planned that will result in property value changes in a certain area? Will certain developments be beneficial to the number of renters in the area, driving up demand for your investment? Is stagnating population growth creating a slow pace of development that could be a warning sign to not invest in real estate quite yet?
Evaluating the potential for future development in the area of your property is an extra step that can improve your investing experience.
Tips for Successful Real Estate Investment
When you invest in real estate, you are putting your hard-earned money on the line. It takes money to make money, so you want to be as confident as you can that you will get a positive ROI from your investment, no matter where the property is located. Along with researching the above considerations, here are a few tips to help you achieve greater success as a real estate investor.
Partner with a Knowledgeable Real Estate Agent
Real estate agents can be your secret weapon when you are on the hunt for properties. They understand local markets better than anyone and have connections that can lead to finding the right seller. Additionally, these agents likely have a network of other connections such as contractors, property managers, and fellow landlords that can help you on your journey as an investor. If you choose to invest in real estate, then lean on the expertise of local realtors as you search the market for the right property.
Conduct Thorough Due Diligence on Properties
Research is one of the keys to a successful investment strategy. It is easy to buy a property if you have the money, the credit score, and the debt-to-income ratio that lenders want to see. It is much harder to make that property profitable so that you get a positive ROI. Spend a lot of time in the research phase and do your due diligence.
If you feel hesitant about a certain property, think about the considerations listed above to figure out why you have concerns. The more deeply you research a property and its market before buying it, the easier it will be to envision a path to profitability.
Develop a Solid Investment Strategy
Although real estate is one of the safer bets for investing, that does not mean it is always easy. Before you get started, you need to develop a solid investment strategy. This means planning your budget well and evaluating your financial goals. You need to determine what type of investor you want to be and if you prefer passive or active management.
Are you more interested in short-term vacation rentals in the most popular tourist destinations or long-term housing in a diverse and robust economy? Developing your strategy early on will create a guide for making smart decisions when you start buying properties and managing them.
Consider Property Management Options
As mentioned previously, property management is an important element of investing to plan for. When you buy a property, you are responsible for renting it out to tenants, handling lease agreements, responding to maintenance requests, and a hundred other tasks related to the property. This is a huge burden to bear, especially if you are unprepared for it.
Your best course of action for commercial or residential real estate may be to hire a property management firm to handle the heavy lifting. This will cost you more money, but it can yield far more passive income. Make sure you determine your property management strategy before purchasing any properties.
Stay Informed About Market Trends and Regulations
Timing your investment can be just as important as conducting thorough research. There are significant market patterns that develop over time. Homes sell differently based on seasons, whether there is a strong job market or not, the current Federal Reserve interest rates, and even the area’s population growth.
Additionally, policies can change how potential buyers evaluate their investments. Keeping track of these market trends and regulations will ensure that you can invest in the housing market at the right time and get a great price.
Check Your Real Estate Investing Loan Options With a Lender
Let’s say you have identified a market with a strong economy. There is a thriving business community, real estate values are steadily growing, and you can get a home at an affordable cost. However, you still need to finance the purchase because you do not have enough cash to cover the purchase price. Finding the right lender and loan product can vastly improve your investing experience. Pride Lending is prepared to help you finance your property purchase to help you reach your financial objectives.
Summary
Real estate investing is a great strategy to build wealth. However, it comes with plenty of risks. That is why you must spend time researching markets, planning your strategy, and figuring out what your goals are for your investment.
Does your local city’s economic growth indicate a bright future for your professionals and families who want to rent? Is there a thriving tourism industry in a city that you want to leverage for profit with a short-term rental? Are you looking for a strong seller’s market that will turn your original investment into a profit machine or a favorable tax environment for a future property?
No matter what your needs are for investing in real estate, Pride Lending will be by your side when it comes to financing. Our team is composed of allies and members of marginalized communities who are committed to providing the best possible service to borrowers, no matter their background or identity. We serve everyone with the same care and attention, ensuring you’re familiar with all aspects of the application process and have access to additional programs that can save you money on upfront expenses.
Contact us today to learn more about how we help the LGBTQ+ community build wealth through investments. You can easily reach us at Andrew@pridelending.com or 727-591-7909.
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