With the new year comes new year’s resolutions. If you set a resolution to get the most bang for your buck, you might be thinking about investing in a rental property to help create some passive income. Below you will find a list of some of the best places to invest in rental properties in 2023.
10 Cities to Consider for Investment Property in 2023
- Grand Rapids, MI
- Cincinnati, OH
- Louisville, KY
- Tampa, FL
- Raleigh, NC
- San Diego, CA
- Chicago, IL
- New York, NY
- Phoenix, AZ
- Atlanta, GA
Grand Rapids, MI
Grand Rapids is known for being the second largest city in Michigan and it’s becoming known as a great place for passive income investors. Even though rent in the Grand Rapids real estate market has not increased much, landlords will see plenty of demand this year due to the city’s lack of rental inventory. Issues with the supply and demand of rental properties have led to an overall increase in rent over the last year and this trend will continue as demand for rental properties goes up in 2023.
Cincinnati, OH
The real estate market in Cincinnati is growing more and more attractive every year, but it’s become especially attractive this year. Cincinnati's local rent rates have grown by 6% in the last few months, one of the fastest rent growth rates in the United States.
Louisville, KY
Today more and more renters are choosing to call Louisville, KY home due to it having a more affordable real estate market. But since the demand is so high in Louisville, landlords will have no problems securing tenants. Finally, due to the lack of inventory, the rates of rent in Louisville have already increased by 8% over the past year.
Tampa, FL
In 2022, Tampa had one of the best rental markets, and this trend is expected to continue in 2023. According to Florida Realtors, the inventory of available homes to buy is down by 20%. This means that even though buyers have enough money to buy a home, they can’t find one due to a lack of inventory. As a result, many would-be buyers have to rent, and landlords will be seeing an increase in interest as well as rental rates due to this demand.
Raleigh, NC
Due to more and more people moving to Raleigh since the pandemic, local home values in the city have increased more than 50% since 2020 and rent has increased by around 30%. As more people choose to move to Raleigh, this allows landlords to increase rent even higher, making Raleigh one of the best rental markets for investors in 2023.
San Diego, CA
As people continued to work from home after the pandemic, many decided to move to warmer cities, making San Diego a popular place to live for remote workers. Since this city has become so popular, landlords have been able to increase the rent by 5% in the last six months. Since demand for homes in San Diego is still at an all-time high, rent prices will likely remain strong in 2023.
Chicago, IL
Chicago represents the third-largest city in the United States and more than 50% of the city’s population are already renters, making Chicago the perfect city to buy rental property. Plus, there are limited listings and a high demand for rentals. This has led to rent rising around 7% over the last year, and it is only expected to increase in 2023.
New York, NY
In the past six months, rent in New York City has increased by 5%. This is due to people heading back to the office after the pandemic, and landlords are seeing more demand for their units. Therefore, landlords have been able to increase their rents, and demand is expected to increase in 2023.
Phoenix, AZ
Since 2020, rent in Phoenix, AZ has increased by 32%. The increase was due to households deciding to move to warmer cities during the pandemic. Even though rent increases have slowed down in the past few months, Phoenix is still a top destination, ensuring that demand for rental properties will only increase in 2023.
Atlanta, GA
Last but certainly not least is Atlanta, GA. As the years go on, Atlanta’s population and job growth rates continue to increase, making it a popular city in the south to move to. Atlanta is known for being the best place to buy rental properties due to its average home price being around $412,000 and the average rent being around $1,800. Any investor who can purchase a property in Atlanta will have no issues renting a property due to the increase in demand for rental properties.
If you have decided this is the year to invest in rental property, hopefully this overview will help you compare cities to find a place that helps you get the best return on your investment.
