You took on the risk and invested for a reason: a return.

But how much should you expect back?

Here’s what’s considered a good rate of return on a rental property:

The Short Answer (and Why it “Depends)

A “good” return on a rental property exceeds your cost of capital (your hurdle rate reflecting loan costs, the return you require on your cash, and a risk/effort premium). It should outperform local comps on the same metric, whether that’s cap rate, rental yield, or cash-on-cash.

Because returns vary by location, property type, and expected vacancy, aim to be above your local average after adjusting for those factors.

Okay, The Long Answer

Building on our short answer, here’s the long and (fair warning) more number-heavy answer:

Across U.S. counties, the average gross rental yield for three-bedroom properties is approximately 7.45% for 2025, with top-yield counties achieving yields of roughly 10% to 18%.

Institutional benchmarks add more insight. Core multifamily going-in cap rates (day-one net operating income (NOI) divided by purchase price) are around 4.73% in Q3 2025.

On the equity side, many investors view 6% to 10% cash-on-cash return as an attractive range for residential deals, adjusted for risk and effort.

How to Calculate Your Return (Step-By-Step)

Okay, so how exactly do you calculate your return? Grab your notepad, here’s how:

1. Start With Your Income

Begin with the monthly rent you do or will earn from the property, multiply by 12 to get gross rent. Subtract a vacancy allowance and any expected credit loss to get the effective gross income. Add other income such as pet fees, parking, or laundry.

Example: $2,500 per month × 12 = $30,000 gross rent. With a 5% vacancy allowance, the effective gross income is $28,500. Assume no other income for simplicity.

Learn more: What is a rental ledger?

2. Now, the Expenses

List annual operating expenses you will pay: property taxes, insurance, repairs and maintenance, utilities that are owner-paid, management fees, HOA dues, and a small reserve for capital items such as roof, HVAC, or appliances. You can itemize or apply a conservative expense ratio if you have a limited history.

Example: Using a 35% expense ratio on $28,500 gives $9,975 in operating expenses.

3. Get NOI, Then Capitalization Rate

NOI, or net operating income, equals effective gross income minus operating expenses. Cap rate equals NOI divided by purchase price or current market value.

Example: $28,500 − $9,975 = NOI $18,525. If the purchase price is $240,000, the cap rate ≈ 7.7%.

4. Layer in Financing to get Cash-on-Cash Return

Subtract annual debt service from NOI to get pre-tax cash flow. Divide that by your total cash invested to get the cash-on-cash return. Total cash invested usually includes the down payment, closing costs, and initial repairs.

Example: 20% down on $240,000 is $48,000. Loan is $192,000 at, let’s say, 6.5% for 30 years, which is about $1,213.57 per month, $14,562.85 per year. Pre-tax cash flow ≈ $18,525 − $14,562.85 = $3,962.

That means your cash-on-cash return ≈ $3,962 ÷ $48,000 = ~8.3%.

Confused? Here’s how to calculate your rental rate in more detail.

Your Rate of Return Against the Local Market

If we go back and look at the average gross rental yield across the US, 8.3% is above the average of 7.45%, so our example delivers an above-average rate of return.

But just remember, despite averages, your local comparables (properties similar to yours) matter most. If a neighbor’s rate of return is, say, 12% and yours is only 8.3%, you’ll need to ask yourself why that is.

Let’s look at this in more detail:

Compare to Local Yields and Cap Rates

Select three to five recent comparable properties that are similar in terms of property type, number of bedrooms and bathrooms, condition, and location. For each, estimate the vacancy rate and typical expenses, then calculate a quick net yield or capitalization rate.

Your deal looks “good” when it lands above that local band on the same measure without leaning on rosy assumptions. If the property is unusual, widen the radius a little and normalize for size and condition.

Keep It Micro-Local

Do not average an entire city. Anchor your comparables inside the same school catchment, on the same side of any major arterial, and with similar walkability and transit access. A unit one block deeper into a top-rated school zone, closer to a rail stop, or shielded from freeway noise can justify stronger rent and faster leasing than one located just a few streets away.

If you cannot find three to five true peers, widen the radius a little, then note each difference in a short line item, such as “outside school zone” or “faces arterial”, and temper your effective rent or expected vacancy accordingly.

Vacancy and Seasonality Check

Sanity-check your vacancy before you celebrate a “good” result. If your pro forma uses a tighter vacancy rate than the comparables, back it up with evidence such as recent days-on-market, the time of year you will list, or a clear presentation edge like better photos and in-unit laundry.

If you cannot justify the difference, lift your vacancy assumption to the comparable average and recompute yield, cap rate, and cash-on-cash.

Seasonality matters as well. Listings that come on the rental market during peak leasing months often turn over faster than winter listings in the same block. If a small increase knocks your metric back into the local middle of the pack, your return is not “good” yet.

Expenses Investors Underestimate (And Shouldn’t)

Unseen expenses hurt your returns. Keep an eye out for these commonly unaccounted-for costs:

Turnover Costs and Vacancy

Between tenants, getting the place ready usually means a deep clean, touching up or repainting walls, fixing small items, tidying or replacing worn carpet or vinyl plank flooring, and checking locks and door hardware. If you use an agent or manager, include any leasing or placement fees.

Empty days also cost money: estimate the cost per day by dividing the monthly rent by 30, then multiplying by the number of extra days the home sits empty (for example, at $2,400 per month, each empty day is about $80, so a 6-day delay costs roughly $480).

Keep the work list short enough to finish in a few days to about a week, and if it will take longer, add the extra empty day cost to your return calculation before you approve the work.

Property Taxes and Insurance Drift

Buying can trigger a property tax reassessment, and your insurance premium can change after a claim, as the roof ages, or if regional risk shifts (storms, fires).

What to do:

1. Check tax history. Look up the parcel on the assessor’s site. See how taxes changed after prior sales on this property and nearby. Estimate what your taxes would be at your purchase price, not the seller’s older assessed value.
2. Get specific insurance quotes. Provide roof age, construction type, square footage, and coverage needs (replacement cost, liability, wind/hail, flood if required). Ask for an estimate of the next renewal increase, too.
   Budget a “drift” buffer. Add a small annual line item for increases so a mid-year escrow adjustment does not wreck cash flow.

Simple example:

• Current taxes: $3,000. Model $3,600 in Year 1 after reassessment, then +3–5% per year.
  Current premium: $1,800. Model $2,000–$2,200 at renewal if the roof is older or you are in a higher-risk area.

Revisit both lines every renewal and update your pro forma so your return stays realistic.

Not sure what your property tax rate is? Ranked low to high, here’s the property state rate for each US state.

Depreciation, Taxes, and Your After-Tax Return

Residential structures are typically depreciated over 27.5 years; land is not depreciable. Depreciation can lift your after-tax cash yield today because it reduces taxable income reported on Schedule E.

At sale, some or all of that benefit may be recaptured, and you may also face capital gains on appreciation. Investors sometimes use a 1031 exchange to defer recognition when swapping into another property, so be aware of this.

What Moves Returns Most (Levers You Control)

Three levers move almost every rental’s return. First, price and presentation raise what the market will pay. Second, vacancy control shortens the time between leases, so more of the year is earning rent. Third, expense discipline keeps operating costs from eating cash flow.

Think in days and dollars. One extra vacant week can erase a meaningful slice of annual rent, so a small, realistic price adjustment that fills the unit faster often beats holding out.

Let’s explore this more:

Pricing and Marketing Reduce Vacancy

Price to the market you have, not the one you wish you had. Use clean, bright photos and a tight feature list that leads with must-haves like in-unit laundry or parking. Publish at a realistic asking rent based on fresh comparables, then review inquiries and showing volume within the first 72 hours.

If interest is lackluster, adjust early instead of drifting vacant. Offer flexible viewing windows or self-tours so prospects can see the place quickly. Keep screening criteria consistent and start renewal conversations 60 to 90 days before expiry with fair increases and a small tune-up offer, which is cheaper than a turn and a gap. Track four simple ratios, each listing cycle to keep yourself honest: days on market, inquiry-to-showing, showing-to-application, and application-to-lease.

Renovations that Lift Rent Without Overcapitalizing

Refresh before you reinvent. Focus on updates that renters pay for and that survive turnovers: neutral paint, resilient flooring in high-wear areas, a kitchen and bath refresh, bright task lighting, smart access, and storage adds.

Run a quick payback check for each item and aim for a vacancy-neutral scope that fits a standard turn window. Pre-order materials, batch trades, and schedule the final clean and photos before you start, so the unit goes live the moment work wraps. If the math looks thin or the work would extend vacancy, scale the scope or defer it to the next natural turnover.

Expense Discipline

Protect NOI with boring, repeatable habits. Set a preventative maintenance calendar that includes filter changes, recaulking wet areas, gutter cleans, and an annual HVAC tune-up to prevent bigger failures. Standardize paints, flooring, and hardware across units so touch-ups and repairs are faster and cheaper.

For larger jobs, collect at least two comparable vendor bids and document the scope so you are not paying for extras you did not approve. Trim utility spend with whole-home LED lamps and simple comfort upgrades, and consider a smart thermostat where the system supports it. Review insurance annually, shop coverage if premiums jump, and keep a small capital reserve so inevitable replacements do not crush cash flow mid-year.

Your Rate of Return is Looking Great, Now What?

The easiest way to protect a “good” return is to shorten vacancy, present the unit like a true professional, and keep operating costs predictable…

And that’s precisely what Ziprent’s flat-fee services are built for.

Our tenant placement includes next-day listing with professional photography, 3D tours, on-demand showings, instant screening, and automated lease generation, so more prospects see your unit and good tenants sign sooner.

While our property management offers 24/7 support covering rent coordination, accounting, maintenance requests, and coordination, plus inspections and renewals.

Sounds great, right? Simply head over to our homepage, and let’s get you signed up.

For US-based homeowners and real estate investors, the old saying, “There are only two things certain in life: death and taxes,” is painfully accurate. Property taxes are no exception.

Buy in the wrong location and they’ll make short work of the American dream.

So, before you sign on the dotted line, let’s uncover which states are the most (and least) tax-friendly for rental property investors like yourself.

What are Property Taxes?

Property taxes are recurring fees that homeowners and real estate investors pay to their local governments. They’re basically a “membership fee” for your community, used to fund essential services like schools, police and fire departments, road maintenance, and other local infrastructure.

Before we move on, a quick note on semantics: The terms “property tax” and “real estate tax” are used interchangeably. However, technically, there is a difference:

• Property tax is an umbrella term encompassing all taxes levied on property, both real and personal. Real property is immovable (land, buildings), while personal property is movable (cars, furniture).
• Real estate tax specifically refers to taxes levied on real property, such as houses, apartments, commercial buildings, and land.

For the average homeowner or investor, the terms are essentially synonymous, and we’ll be using them in this way from here on out.

States With Lowest Property Taxes

If low property taxes are a priority for your next rental investment, look no further than these five states:

1. Hawaii boasts the nation’s lowest rate at a mere 0.27%. Surprised? Hawaii gets a big chunk of its budget from income and sales taxes, relieving the burden on the property tax side of things.
2. Alabama has the second-lowest at 0.39%. The state’s homes, farmland, and timberland are protected under the state’s constitution, making property taxes hard to raise.
3. Colorado keeps its 0.49% rates low thanks to the Taxpayer Bill of Rights (TABOR). This law caps how much the government can collect, making it investor-friendly even with the booming real estate market.
4. Nevada is a new contender in the top five with a tax rate of 0.50%. Nevada’s appealing tax climate now includes one of the lowest property tax rates, adding another reason to consider the Silver State for your real estate ventures.
5. Louisiana slips down one place with a 0.55% tax rate, but it’s still a low-tax leader. The state offers property tax exemptions, like the homestead exemption, which helps keep the effective tax rate down for many property owners.

To put these numbers in perspective, the national average property tax rate is a hefty 0.99%, nearly FOUR TIMES higher than Hawaii’s rate.

Learn more: 15 best places to buy rental properties.

States With Highest Property Taxes

If dodging high property taxes is your goal, you might want to think twice about these five states. Let’s take a closer look at the tax revenue heavy hitters:

1. New Jersey holds onto a top spot at 2.23%, though their rate has seen a bit of a dip. The State’s high property taxes continue to be driven by factors like dense population, relatively high real estate values, and those well-funded public services, especially their school system.
2. Illinois homeowners will also see a decrease in their tax rate, sitting at 2.08%. The reliance on property taxes to fund essential services like education keeps them near the top of the list.
3. New Hampshire’s rate has also fallen slightly to 1.93%, although property owners still shoulder a heavy tax burden. This is largely due to the state’s lack of income and sales taxes, meaning property taxes are a primary funding source for local services.
4. Connecticut, known for its affluent areas and strong public services, continues to have one of the highest property tax rates in the nation at 1.79%, although it has decreased from the previous year.
5. Vermont rounds out the top five with a rate of 1.76%. The state’s commitment to well-funded public services, particularly its focus on equitable education across districts, contributes to its relatively high property tax rate, which has also seen a slight reduction.

Remember, the national average is around 0.99%. That’s less than HALF of what New Jersey residents are paying.

Do All States Have Property Taxes?

The short answer is yes, every state levies some form of property tax. However, savvy investors need to be aware of nuances and exceptions.

Tax rates vary drastically from state to state. As we’ve seen, a property in Hawaii is taxed at a tiny fraction of the rate compared to a property in New Jersey. But even within a high-tax state, certain areas might have lower tax rates on other commodities or specific exemptions that will significantly reduce the burden.

So, a word of warning. Don’t take things at face value. While places like Hawaii and Colorado might sound tempting, states often compensate for low property taxes and missed revenue with higher property and sales taxes. Those costs add up fast, especially for landlords who aren’t just investing in property in a specific state but are living there, too.

That’s why smart investors look beyond the flashy headlines and analyze the total tax burden.

Learn more: Out-of-state real estate investing for newbies.

Property Tax Cuts and Relief Programs

Eligibility criteria for tax reliefs vary by state. Certain states also offer tax breaks for properties used for specific purposes, like agriculture or conservation.

While we won’t break down every single program here, as there are too many to list and they are frequently updated, here are a few examples of the types of relief you might find:

• Tax credits can be applied directly, often targeting specific situations like installing energy-efficient upgrades or owning historic properties.
• Tax deferrals allow you to delay paying a portion of your taxes. While not technically a “cut,” it can be a lifesaver if cash flow is tight.
• Rental property programs are offered by some states or municipalities through specific programs for rental properties. These might include tax credits for providing affordable housing or deductions for certain expenses.

Property Tax Exemptions

And tax exemptions, what about those? Let’s take a look at some of the most common:

• Homestead exemptions lower the taxable value of a property, which means you’ll pay less in taxes. The specifics vary by state, but typically, it’s a fixed amount or a percentage reduction based on the property’s value.
• Senior and veteran exemptions offer additional tax breaks for seniors or veterans. These can be quite substantial, so it’s definitely worth looking into if you qualify.
• Disability and limited income exemptions are also available in some states. Under such exemptions, eligible individuals can qualify for property tax reductions.
• Agricultural exemptions allow land that is used for commercial purposes to qualify for lower tax rates, as these properties often have different valuations than residential homes.

Applying for tax cuts, relief programs, and exemptions usually involves filing paperwork with your local assessor’s office. The specific process can vary, so check your state’s website for guidance.

Property Taxes Ranked by State

Curious as to what the property taxes are outside the five least expensive and five most expensive that we covered earlier? Done. See all 51 states and districts below:

Rank	State	Median Effective Property Tax Rate
1	Hawaii	0.27
2	Alabama	0.39
3	Colorado	0.49
4	Nevada	0.50
5	Louisiana	0.55
6	South Carolina	0.56
7	District of Columbia	0.57
8	Delaware	0.57
9	West Virginia	0.58
10	Wyoming	0.58
11	Arkansas	0.61
12	Utah	0.63
13	Mississippi	0.65
14	New Mexico	0.65
15	Tennessee	0.66
16	Idaho	0.69
17	Arizona	0.72
18	Missouri	0.73
19	Montana	0.74
20	California	0.76
21	Indiana	0.76
22	Kentucky	0.78
23	Florida	0.83
24	North Carolina	0.84
25	Virginia	0.85
26	Maryland	0.87
27	Oregon	0.90
28	Washington	0.93
29	Georgia	0.94
30	Maine	0.94
31	Oklahoma	0.97
32	South Dakota	0.99
33	Alaska	1.02
34	North Dakota	1.05
35	Minnesota	1.08
36	Pennsylvania	1.09
37	Texas	1.10
38	Kansas	1.14
39	New York	1.26
40	Michigan	1.31
41	Nebraska	1.36
42	Wisconsin	1.53
43	Ohio	1.56
44	Iowa	1.57
45	Massachusetts	1.63
46	Rhode Island	1.63
47	Vermont	1.76
48	Connecticut	1.79
49	New Hampshire	1.93
50	Illinois	2.08
51	New Jersey	2.23

Data source: US Census Bureau, B25103 dataset.

Counties With Highest Tax Rates

Some counties really know how to take a big bite out of your budget! If you’re looking for a deal, you might want to steer clear of these notorious high-tax counties:

• Menominee County, Wisconsin, tops the charts with a whopping 3.64% effective property tax rate. That means for every $100,000 of your home’s value, you’re shelling out over $3,600 in property taxes each year. Ouch!
• Camden County, New Jersey. Don’t let the Garden State fool you; some areas come with a hefty tax burden. Camden County residents face an effective rate of 3.08%.
• Salem County, New Jersey, appears again, with Salem County close behind at a 3.03% effective tax rate.
• Orleans County, New York. Upstate New York also makes an appearance. Orleans County residents pay an effective property tax rate of about 3.00%.
• Allegany County, New York. Staying in New York, Allegany County shows an effective rate of 2.94%.

And the list goes on! Several other counties in New Jersey and New York also rank among the highest, along with Lake County in Illinois.

Below, you’ll find which ten counties pay the most in property taxes:

Rank	County	State	Median home value (USD)	Median Property Taxes Paid (USD)	Effective Property Tax Rate
1	Menominee County	Wisconsin	97,000	3,527	3.64%
2	Camden County	New Jersey	262,200	8,063	3.08%
3	Salem County	New Jersey	223,000	6,757	3.03%
4	Orleans County	New York	126,200	3,781	3.00%
5	Allegany County	New York	97,900	2,881	2.94%
6	Gloucester County	New Jersey	283,500	7,964	2.81%
7	Monroe County	New York	197,100	5,495	2.79%
8	Cattaraugus County	New York	109,400	2,946	2.69%
9	Lake County	Illinois	326,600	8,743	2.68%
10	Cortland County	New York	158,100	4,184	2.65%

Data source: US Census Bureau, B25103 dataset.

Why Do Property Taxes Vary From State to State?

State property tax rates vary depending on several factors:

• State, county, and city tax authorities decide how much money they need to run things, from schools to garbage collection. Property taxes are a major source of that funding, so if those budgets are high, taxes often are, too.
• Some states provide more funding for local services than others, which means less reliance on property taxes. Others leave it largely up to local governments, resulting in greater variation across regions.
• Each state has its own mix of tax sources—income tax, sales tax, and property tax. A state with a high sales tax might rely less on property taxes to fund its budget.
• A booming economy can mean higher property values, leading to higher assessments and tax bills, even if the rate itself stays the same.

It’s a complex puzzle, but one thing’s for sure: understanding the tax environment of your state—and specific areas within it—is imperative for making smart investment decisions. Don’t just look at the top-line number. Dig into the details to see how taxes impact your bottom line.

How Are Property Values Assessed?

Think property taxes are based on what you paid for your place? Nope—it’s all about assessed value, which is what the government thinks your property is worth right now.

How do they come up with this number? Local assessors are the people behind the curtain. They crunch data annually or every couple of years using a few different methods:

• Sales evaluation is the most common method. They look at what similar properties in your area have sold for recently.
• Cost approach involves estimating the cost of replacing your house from scratch, including materials, labor… the works.
• Income approach is another commonly used method. If your property is a rental, they’ll look at the income it generates to figure out its value.

The assessed value isn’t the final say, though. The government applies a tax rate, which is a percentage that varies by location. This rate is multiplied by the assessed value to calculate your actual property tax bill (you’ll see how this works in the next section).

What are Property Taxes Based On?

Property taxes are based on two factors:

1. The assessed value: the metric we just discussed, the value given to a property by a government assessor.
2. The local mill levy: a tax determined by a local government based on the determined funding requirements of various public services and governmental functions within a specific jurisdiction.

It’s important to note that the assessed value is often a percentage of the property’s market value, not the entire value. This percentage, known as the assessment rate, varies by locality. For example, if a home’s market value is $500,000 and the assessment rate is set at 8 percent, the assessed value would be $40,000.

So, how are property taxes calculated? It’s fairly straightforward. Just multiply the assessed value by the mill rate.

For example, if a property’s assessed value is $40,000 and the mill levy is 4.5 percent, you’d

1. convert the 4.5 percent mill rate into a decimal: 4.5 / 1,000 = 0.0045
2. and then multiply the assessed value of $40,000 by the mill rate of 0.0045 = $1,800.

If you owned the example property, you’d pay $1,800 annual property tax or $150 per month.

The Impact of Property Taxes on Homeowners

Property taxes aren’t just a line item on your bill. Oh, no. They can significantly impact your finances and your real estate decisions. For homeowners, those annual tax payments add up, especially in areas with high rates, making housing less affordable.

For rental investors, property taxes are a make-or-break deal. If the tax rate is sky-high, your rental income gets eaten up before you even see a profit.

Here are a couple of things to consider for landlords:

• High property taxes severely limit your cash flow, making it hard to cover unexpected expenses or reinvest in your property.
• If you have to pass those high taxes onto your renters, it could lead to higher vacancy rates or force you to accept less qualified tenants.

That’s why savvy investors factor in the tax burden when evaluating potential markets. It’s not just about home prices—it’s about the continued cost of ownership.

Learn more: Real estate taxes for landlords with small portfolios.

How to Effectively Manage Your Property Taxes

With a bit of planning and know-how, you can take the sting out of that annual bill and keep more of your hard-earned rental income.

First things first: set aside some cash each month. You’ll thank yourself later when that tax bill arrives. Even a small amount saved regularly can make a big difference.

Next, know your options. Some states let you pay your taxes in installments throughout the year, which can make it more manageable. Check with your local tax office to see what’s available.

Don’t forget about those sweet exemptions and relief programs. As we discussed earlier, there might be ways to lower your property tax bill depending on your situation. It’s worth digging into those options, as they could save you a bundle.

And don’t be afraid to ask for help. A tax professional will guide you through the ins and outs of deductions and credits specific to your state. It might seem like an extra expense, but their expertise could save you way more than it costs (plus, their services are tax-deductible).

Learn more: helpful tax tips for landlords.

Maximize Your Property Value

Understanding the factors that influence tax rates, researching your state’s specifics, and taking advantage of potential exemptions will allow you to take control of your tax burden and protect your investment.

Remember, being a savvy property owner isn’t just about finding the right property; it’s about making smart financial decisions.

Ready to make your property work for you? Explore our range of property management services and take the first step towards a stress-free, profitable future.

Tired of watching your money gather dust in a low-yield savings account?

Itching to build a solid real estate portfolio?

You’re in luck—our guide breaks down 12 proven strategies, from generating passive income to building long-term wealth. Lesssgo!

1. Buy and Hold

Think of buy-and-hold as the tortoise in the real estate investing race. It’s not about quick flips; it’s about building long-term wealth through appreciation and rental income. Start by finding your diamond in the rough—properties with strong potential in up-and-coming neighborhoods or areas with planned development.

The best approach? Crunch the numbers. Factor in mortgage payments, property taxes, maintenance, and—if you decide not to live in the property but rent it out—expected rental income. A healthy cash flow is what you’re aiming for here.

Now comes the “hold” part. Patience is key as you watch property values rise and rental income flows in. Holding builds that all-important equity and generates passive income. Eventually, you can sell for a profit, refinance, or continue enjoying that rental income.

Buy-and-hold offers steady income, appreciation, and tax advantages. But it’s best suited to real estate investors who have bucketloads of patience and a willingness to navigate market changes (if this doesn’t sound like you, strategy number three may be better suited to you).

Learn more: rental property tax guide for new and experienced landlords.

2. Rental Property Investment

Want to generate a steady stream of passive income while building long-term wealth? It’s no big secret, but rental properties are a no-brainer in this department. From cozy single-family homes to sprawling multifamily units, the options are as diverse as your investment goals.

But being a landlord isn’t just about collecting rent checks. Nope, managing a property involves finding and screening tenants, crafting ironclad lease agreements, and navigating rental laws. Sound like a headache? This is where professional property management teams do their thing.

A reliable property manager (hey, hello, that’s us, Ziprent) handles all the nitty-gritty, from tenant screening and rent collection to maintenance and legal compliance.

And as an added bonus, they’ll ensure your property is well-maintained, your tenants are happy campers, and your investment property is generating maximum returns.

Learn more: how to buy your first rental property.

3. Fix and Flip

Love those home renovation shows and have a knack for spotting hidden potential? Fix-and-flip might be your real estate calling. This strategy remodels diamond-in-the-rough properties into market-ready gems.

It starts with finding undervalued properties—think outdated kitchens, neglected landscaping, or those “cosmetic fixer-uppers” that scare away average buyers. Next, put on your budgeting hat and estimate renovation costs. Factor in materials, labor, and unexpected surprises that always seem to pop up (hello, leaky pipes).

Now, it’s time to channel your inner Joanna Gaines. Manage the renovation process like a pro, whether you’re DIY-ing it or hiring a skilled crew. Think upgraded kitchens, spa-like bathrooms, and curb appeal that would make your neighbors jealous.

Finally, it’s showtime! Stage your masterpiece and list it at a price that reflects its newfound glory. A successful house flipping hinges on your ability to buy low, renovate strategically, and sell high.

And, unlike the buy-and-hold strategy, fix-and-flip offers short-term returns and the satisfaction of transforming a neglected property. Just beware. It’s not for the faint of heart. Fix-and-flip requires market knowledge, renovation expertise, and a keen eye for design.

4. House Hacking

Want to live rent-free and generate some extra income? Welcome to house hacking. It puts your primary residence to work.

How? By renting out a spare room, converting your basement into a cozy apartment, or even building a separate dwelling unit on your property. Suddenly, your house isn’t just a home. Oh, no, it’s a smart investment that helps you build wealth while you sleep (literally!).

House hacking offers a blend of financial benefits. Not only can you live rent-free (or significantly reduce your housing costs), but you can also generate a steady income stream to pay down your mortgage faster or reinvest in other ventures.

House hacking isn’t all rental checks and all-in-one mortgage accounts, though. It requires property management tact on your behalf—finding reliable tenants, handling maintenance, and finding a harmonious living environment. Easier said than done.

Get it right, though, and you’ll gain valuable experience, build your financial foundation, and maybe even make some new friends along the way.

Learn more: buying a rental property before a home.

5. Wholesaling

Wholesaling connects motivated sellers with eager buyers—a fast-paced strategy that involves finding distressed or undervalued properties, putting them under contract, and then assigning that contract to another buyer for a profit.

The key is to become a master deal-finder. You’ll need to build a network of potential sellers (think those facing foreclosure or needing a quick sale) and establish relationships with investors hungry for their next project.

Becoming a real estate wholesaler also requires strong market knowledge and negotiation skills. You need to accurately assess a property’s value, identify potential repairs, and negotiate win-win deals for both the seller and the end buyer.

It’s a strategy that offers the potential for quick profits with minimal financial investment. You’re facilitating a transaction and profiting from the spread between your contract price and the purchase price the buyer pays.

So, if you’re a natural networker with a knack for deal-making, wholesaling might be your path to real estate rags to riches.

6. Real Estate Investment Trusts (REITs)

Wishing you owned a slice of a skyscraper or a shopping mall? REITs (Real Estate Investment Trusts) make that dream a reality. REIT companies own and operate income-producing real estate, allowing you to invest in a diversified portfolio of properties without the hassle of being a landlord.

Here’s how it works: instead of saving yet another downpayment, you buy shares in a company that owns and manages properties like office buildings, shopping centers, apartment buildings, and even hotels. They generate income through rent and leases and then distribute a portion of those profits to shareholders as dividends.

REITs, like mutual funds, offer liquidity (meaning you can easily buy and sell shares), diversification (spreading your risk across multiple properties), and the potential for both income and appreciation.

These trusts come in different flavors, from retail and residential to healthcare and industrial. Each type focuses on a specific sector of the real estate market, allowing you to tweak your investments to meet your goals and risk tolerance.

If you’re looking for a hands-off way to invest in real estate, REITs might just be the perfect match.

7. Real Estate Investment Groups (REIGs)

Another hands-off investing opportunity? REIGs (Real Estate Investment Groups). These groups pool resources from multiple investors, allowing you to team up and tackle bigger, bolder projects than you could alone.

How does this look? You join forces with other investors, combining your financial firepower and expertise to acquire properties, share risks, and maximize returns. Suddenly, those large-scale apartment complexes or commercial development investments you couldn’t quite swing before seem within reach.

REIGs also provide access to larger and more diverse investment opportunities, reduce your individual risk, and allow you to learn from experienced investors—a win-win-win.

Learn more: out-of-state real estate investing for beginners.

8. Commercial Real Estate

Ready to play in the big leagues of real estate? Commercial properties offer the potential for high income and long-term appreciation. Yup, we’re talking about those towering office buildings, bustling retail spaces, and massive industrial warehouses.

Heads up, though, commercial requires a different skill set from residential real estate investments. Leasing agreements are more complex, tenant relationships can be more demanding, and market conditions fluctuate significantly. You’ll also have to wrap your head around zoning regulations, property taxes, capital gains, and the unique needs of commercial tenants.

Don’t let the complexities scare you away, though.

With careful planning, market research, and perhaps a bit of expert guidance, commercial real estate can be a lucrative addition to your investment strategy.

9. Real Estate Crowdfunding

Ever wished you could invest in a luxury condo or a sprawling apartment complex, but your bank account laughed in your face? We’ve got just the thing: real estate crowdfunding. This strategy allows everyday investors to pool their resources and own a piece of the action with smaller upfront costs.

Think of it like Kickstarter for real estate assets. Crowdfunding platforms connect investors with developers and projects. That way, you can browse opportunities, choose your favorites, and invest alongside others. Suddenly, those high-rise condos and trendy retail spaces are within reach.

The beauty of crowdfunding lies in its accessibility. Minimum investments are often lower than traditional real estate ventures. A low barrier to entry that allows you to diversify your investment portfolio and access exciting projects that were once reserved for the ultra-wealthy.

But before you jump on the crowdfunding bandwagon, remember the importance of due diligence. Research the platform, scrutinize the project details, and assess the risks involved. Look for experienced developers, solid financials, and projects that align with your investment goals.

Get ready to reap the rewards of investing in partnerships!

10. Land Development

Just for a moment, think beyond bricks and mortar. What’s left? Land, of course. Uh-huh, land development is where the true real estate visionaries play. It’s about converting raw, undeveloped land into thriving communities, bustling commercial centers, or even serene nature escapes.

But land development isn’t for the faint of heart. It’s a complex dance of zoning regulations, environmental assessments, meticulous planning, and intricate construction processes. You’ll need to tackle permits, approvals, and potential roadblocks with the grace of a seasoned developer.

The rewards, however, can be substantial. Successfully developing land can generate significant returns as raw land transforms into valuable real estate. Think residential subdivisions, shopping malls, industrial parks, or even eco-friendly communities.

Land development is a long-term investment that requires vision, patience, and a deep understanding of the market. But for those with an entrepreneurial spirit and a knack for transforming landscapes, it can be a rewarding path to real estate success.

11. Tax Liens and Deeds

Ever dreamt of snapping up a property for pennies on the dollar? Investing in tax liens and deeds might be the answer. You see, when property owners fail to pay their taxes, the government can place a lien on the property and, eventually, auction it off to recoup those unpaid dues.

Here’s where the opportunities come in, you savvy investor. By buying a tax lien, you essentially pay off the delinquent taxes and gain a claim on the property. The homeowner then has a set period to repay you, with interest, to clear the lien. If they fail to do so, you might be able to acquire the property through a tax deed sale.

As you can see, tax liens and deeds offer the potential for high returns, as you can acquire properties for significantly less than their market value. Plus, you can earn interest on your investment while you wait for the homeowner to repay or the property to go to auction.

But beware, tax lien investing comes with its own set of risks. Thorough research is super important. You’ll need to understand the local laws, assess the property’s condition, and evaluate potential legal challenges. It’s definitely not a game for the impulsive or uninformed.

However, if you’re a savvy investor with a high-risk tolerance and a knack for due diligence, tax liens, and deeds can be a lucrative way to expand your real estate portfolio.

12. Buy, Rehab, Rent, Refinance, Repeat (BRRRR)

Money printer go BRRRR… Ya-huh, buying properties below market value, renovating them, renting them out, refinancing to pull out equity, and repeating the process is a serious play. A cyclical approach that starts with finding those undervalued properties hiding in plain sight—the fixer-uppers, distressed sales, or off-market deals with untapped potential.

Once you’ve snagged your bargain, you’re ready to transform the property into a renter’s dream with strategic renovations, boosting its value and appeal with cosmetic upgrades, smart improvements, and a touch of design magic.

Now that your property is sparkling, rent the place out and start generating that sweet, sweet rental income. Once your property is generating a steady income stream, it’s time for the magic of refinancing. This allows you to pull out your initial investment (or even some profit!), freeing up capital to fuel your next BRRRR adventure.

With that newfound cash in hand, you’re ready to dive back into the cycle, acquiring another property and repeating the process. The more you BRRRR, the louder the money printer roars, and the faster your real estate empire expands.

So, if you’re ready to embrace the BRRRR cycle and watch your real estate dreams take flight, get ready to buy, rehab, rent, refinance, and repeat your way to financial freedom.

Learn more: should I buy a rental property?

Maximize Your Returns with Smart Management

We’ve covered a LOT of ground here. From flipping houses to building a real estate empire, the possibilities are endless. But remember, every strategy has its own flavor. Choose wisely, my friend.

Speaking of wise choices… If you really want to find success and ditch the landlord drama, Ziprent’s got your back. Our expert property managers handle the daily grind so you can focus on the big picture: making bank.

Ready to partner up? Head to our property management services page, and let’s turn your real estate goals into reality.

Forget the rollercoaster of recent years. 2024 is shaping up to be the year of opportunities for forward-thinking real estate investors. Harvard’s recently released America’s Renting Housing 2024 suggests a stabilizing market, with rents still at record highs and demand remaining strong. Another bullish signal is the FED hinting at mid-year rate cuts. ‘Bout time, right? It’s a forecast duo that’s brewed up the perfect storm: less competition, high profitability potential, and sustainable growth.

The key to success? Location, location, location. Here are the best places to buy rental properties in 2024.

Best Cities for Buying Investment Properties in 2024

Rank	City	GDP Growth %	Metro Pop Growth %	Rental Yield %	Vacancy Rate %	Median Home Price (USD)	Property Taxes by State %	Job Growth by State %
1	Austin, TX	4.3	2.1	7.6	5.0	$533,719	1.63	2.1
2	Las Vegas, NV	1.5	1.9	10.8	7.4	$407,969	0.50	3.4
3	Orlando, FL	2.4	1.5	13.0	7.5	$379,953	0.82	2.3
4	Charlotte, NC	2.5	2.4	11.0	6.9	$391,750	0.73	1.5
5	Athens, GA	3.6	1.5	14.0	7.4	$308,136	0.83	1.0
6	Houston, TX	1.8	1.4	8.3	9.2	$264,626	1.63	2.1
7	Raleigh, NC	3.4	2.4	4.7	13.3	$434,407	0.73	1.5
8	Tampa, FL	1.8	1.1	10.1	9.4	$375,241	0.82	2.3
9	Birmingham, AL	0.3	0.9	14.5	18.8	$126,949	0.39	1.7
10	San Antonio, TX	2.4	1.5	4.9	9.0	$253,762	1.63	2.1
11	Phoenix, AZ	1.4	1.3	9.7	6.6	$422,001	0.56	2.1
12	Seattle, WA	3.5	0.9	5.7	7.7	$847,419	0.88	1.3
13	Jacksonville, FL	2.0	1.1	7.2	8.0	$294,450	0.82	2.3
14	Atlanta, GA	1.4	1.4	10.3	9.2	$390,373	0.83	1.0
15	Cleveland, OH	0.1	0.4	10.2	15.4	$100,734	1.43	0.5

*See the rationale behind our rankings in the methodology section below.

1. Austin, Texas

The best place to buy rental property is…drum roll…Austin, Texas. And it’s not much of a headscratcher why. Austin’s got a buzz that won’t quit. Startups, music festivals, students—the whole city feels like it’s running on high-octane coffee. This isn’t the place to retire; it’s the place to make things happen. That relentless energy is fueling crazy-fast growth: new neighborhoods, new companies, and new opportunities for real estate investing.

Economic and Demographic Growth

Big tech companies have turned Austin into “Silicon Hills,” fueling a job market that’s the envy of Texas. But it’s not just tech: Austin has a booming healthcare sector and clean energy industry, and it still makes stuff. Like actual real stuff. Incredible.

Rental Yields

Recently, rents have cooled, with prices down 3% year-over-year. But don’t panic: those high city-center yields (7.6%) suggest long-term potential, especially with Austin’s population still growing fast. Think of this dip as an investment opportunity, not a sign of the market’s tanking.

Quality-of-Life Factors

Austin boasts great schools, top-notch healthcare, and live music on every corner—what’s not to love? Public transit’s even decent, with new express bus lines making living car-free a real possibility.

2. Las Vegas, Nevada

Las Vegas isn’t your typical city. It’s a neon oasis in the desert where opportunity and excess collide. The 24/7 energy and anything-goes attitude draw tourists and businesses alike, fueling a surprisingly robust economy and diverse workforce.

Economic and Demographic Growth

Vegas isn’t just about casinos anymore. Sure, tourism remains the main driver of the economy, but healthcare, tech, and even mining are on the rise. Big construction projects totaling more than $8 billion in 2023, the hosting of major league sports, and the recent completion of the Las Vegas Sphere mean that growth isn’t slowing down anytime soon.

Rental Yields

Traditional rental yields in Vegas are very respectable (10.8% cash-on-cash return). Even better, short-term rentals offer excellent bang for your investment buck, which makes sense, given that it’s a tourist town.

Quality-of-Life Factors

People come to Las Vegas for the live shows and nightlife. But the practical stuff matters, too, and Vegas is improving in this department. Public transit is decent, especially on the Strip. Healthcare and schools are on the up, making the city not just a place to party but to actually build a life.

3. Orlando, Florida

Orlando, Florida, isn’t just about theme parks anymore. It’s long been a dynamic city that boasts a thriving economy fueled by tourism, tech, aerospace, and world-class healthcare. Nothing’s changed. The current mix of industries, plus a rapidly growing population, makes Orlando a prime spot for rental property investment.

Economic and Demographic Growth

Tourism is a cash cow ($87.6 billion in 2022), but it’s not the only game in town. Tech, healthcare, and even aerospace are major players here. This diversity, combined with a steadily growing workforce (population is up 1.5%), makes for a stable market. Big projects like Universal’s Epic Universe mean the boom isn’t ending anytime soon.

Rental Yields

Orlando boasts one of the best bang for your investment buck, averaging 13%. While average rents are down slightly from last year ($1,960 in March 2024), this is likely a correction, not a sign of trouble.

Quality-of-Life Factors

Good schools, a solid healthcare system, and endless entertainment options mean tenants are more likely to renew leases. The strong public transportation network is a bonus, reducing car dependency and making rentals more attractive to younger renters.

4. Charlotte, North Carolina

If you think Charlotte’s just about sweet tea and NASCAR, think again—the city’s economy is pumping along nicely. Fortune 500 headquarters, a thriving tech scene, and strong manufacturing fuel consistent job growth. This, combined with a low cost of living and vibrant culture, drives explosive population growth.

Economic and Demographic Growth

Charlotte’s economy is one of the nation’s fastest-growing (a 2.5% GDP growth rate in 2022). Major investments, like Apple’s $1 billion in the region, signal continued expansion. Large investments, plus a diverse workforce, will make Charlotte an economic powerhouse for years to come.

Rental Yields

Investors know it’s about returns, and Charlotte delivers. Gross rental yields here average a very impressive 11%. Compare that to the 4-5% national average, and you see why this market is hot.

Quality-of-Life Factors

Above-average schools, two major hospital systems, diverse attractions, and a growing arts scene make this city attractive to everyone, from young professionals to families. Happy tenants mean lower vacancy rates for you.

5. Athens, Georgia

Athens is the kind of place people visit for a weekend and end up staying for a lifetime. It’s got that walkable Southern charm, a world-class music scene, and surprisingly good healthcare for a smaller city—the perfect recipe for attracting renters and making your investment thrive.

Economic and Demographic Growth

Sure, the University of Georgia is still a huge economic driver, but so are healthcare, biotech, and manufacturing. This diversity means a healthy job market—the unemployment rate is just 3.2%, lower than the national average. And it’s not just jobs. Athens is growing: its population is up 1.5% year-over-year, and expansions at local biotech firms and new manufacturing facilities mean the city’s well-positioned for the future.

Rental Yields

For investors, those lower purchase prices (median house prices landing just a touch over 300k) translate into solid yields (14%, to be exact), making Athens one of the hottest real estate markets in the country.

Quality-of-Life Factors

Athens offers a unique vibe that keeps renters happy. Stellar healthcare, a killer music scene,  and walkable neighborhoods are a huge draw. Even the public transit is decent for Georgia, with free buses making it easy to ditch the car. And let’s not forget that UGA vibe that gives the whole city a youthful energy.

Learn more: is buying a rental property worth it?

6. Houston, Texas

Houston isn’t a city for the faint of heart. It’s hot, it’s sprawling, and it’s got that Texas-sized ambition. This is a place where people come to make things happen. That relentless energy drives a booming economy and constant growth.

Economic and Demographic Growth

Houston’s no one-trick pony. Sure, it’s the energy capital of the world, but it’s home to NASA’s Johnson Space Center and a manufacturing sector that’s diversifying as we speak. This, plus steady population growth, is fueling job creation.

Rental Yields

Houston’s rental yields are seriously impressive, clocking in at 8.3%. With its strong economy and pro-business climate, Houston offers landlords a chance for healthy returns.

Quality-of-Life Factors

Houston offers a unique quality of life. It’s got well-performing universities, the world’s largest medical complex, and seriously diverse food and arts scenes. And while there’s some urban sprawl, the public transit’s improving, and the city’s investing in making neighborhoods more livable.

7. Raleigh, North Carolina

Raleigh isn’t just about the job market; it’s got a surprisingly great quality of life. Think awesome schools, tons of green space, and a vibrant arts and food scene…with a cost of living that won’t break the bank.

Economic and Demographic Growth

Raleigh is one of the fastest-growing cities in the country, and for good reason. It’s got a tech scene that rivals the West Coast, major healthcare players, and top-notch universities (thanks, Research Triangle). This mix fuels a strong job market—the population and the state’s GDP are both up.

Rental Yields

Raleigh’s rental market is HOT. The area is so competitive, renters are practically fighting over vacant apartments. The Raleigh-Cary metro area is the most competitive in the Southeast which means landlords have their pick of tenants.

Quality-of-Life Factors

Great schools, top-tier healthcare, a cool arts scene… Raleigh has the total package. Greenways and parks make it easy to enjoy the outdoors, and the public transit is decent for a mid-sized city. This quality of life is a major selling point for landlords.

8. Tampa, Florida

Tampa’s more than just beaches and sunshine. It’s one of Florida’s largest cities with a rock-solid economy built on diverse industries to boot. This mix means steady job growth, a reliable renter pool, and less risk of those boom-and-bust cycles some cities experience.

Economic and Demographic Growth

Tampa is not a tourism town (though that helps); it has major players in defense, IT, finance, healthcare, and manufacturing. Case in point: Infrastructure projects (think billions in spending), exciting new urban developments, and expansions to the airport are all examples of the moves Tampa is making economically. And the population is up 1.1% year-over-year, so that’s a bonus.

Rental Yields

Tampa’s rental yield is sitting at a healthy 10.1%, placing it above the national average. Florida as a whole outperforms national averages, and Tampa’s in-demand location makes it a top contender within the state.

Quality of Life Factors

Tampa’s no sleepy beach town. Good schools, the Tampa General Hospital one of the best in the state, and attractions galore are what keep renters happy long-term. Even the public transit is decent (for Florida!), making it easy to get around without a car.

9. Birmingham, Alabama

Birmingham, Alabama, might just be the best-kept secret in the South. It’s got big-city amenities—good schools, the best hospital in the state, even decent public transit—but with a small-town cost of living. This unique combo is a magnet for renters, and with property prices still reasonable, it’s a recipe for serious investor returns.

Economic and Demographic Growth

Birmingham’s economy is surprisingly diverse, with big players in healthcare, manufacturing, and tech. The city has been recognized for its economic growth potential, ranking third among U.S. mid-sized cities in a national survey by Business Facilities.

Rental Yields

Birmingham’s rental yields are also crushing national averages, clocking in at 14.5%. And that’s not just hype—rents are projected to jump another 12% in the next five years.

Quality-of-Life Factors

Strong schools, world-class healthcare (thanks, UAB), and a surprisingly cool arts scene make Birmingham a place where renters stick around. Even the public transit’s decent, with the new Birmingham Xpress bus routes making car-free living a real option.

10. San Antonio, Texas

Forget those Texas stereotypes—San Antonio’s got a soul all its own. It’s the home to a vibrant mix of Mexican and Texan culture. But it’s not just history—over the last few years, the city has built itself a booming healthcare sector, a growing tech scene, and some surprisingly affordable housing.

Economic and Demographic Growth

San Antonio’s economy is poppin’ off. It’s got a major military presence, a huge healthcare sector, and is becoming a tech hub—and it’s still relatively affordable with the average house price sitting around $250k. The GDP is also up, and during the pandemic, San Antonio was the fastest-growing major city in the country.

Rental Yields

San Antonio’s rental market is softening a bit, with rent prices down slightly compared to last year. This could be a good time for investors to jump in, as those lower prices paired with the city’s affordability mean potentially strong yields.

Quality-of-Life Factors

People love San Antonio for its unique vibe—think River Walk, the Alamo, and huge festivals like Fiesta. But it’s not all tourists and tacos. San Antonio has solid healthcare and an improving public transit system.

Learn more: should I buy a rental property?

11. Phoenix, Arizona

Phoenix isn’t your average Sunbelt city. It’s got that Southwestern swagger—a mix of burgeoning tech scene, year-round sunshine, and a unique desert landscape. It’s a combo that draws young professionals, outdoor enthusiasts, and anyone craving something different.

Economic and Demographic Growth

Phoenix has a diverse economy with major players in manufacturing, tech, and healthcare. Huge new developments like the Intel expansion and the electric vehicle battery facilities are bringing thousands of jobs.

Rental Yields

While rental prices have cooled slightly lately, that high occupancy rate (95.2%) suggests strong demand remains. The takeaway for investors: this market’s been hot, and while crazy growth may be slowing, long-term prospects still look good.

Quality-of-Life Factors

The real draw is the weather and outdoor lifestyle—hiking, biking, you name it. And while public transit won’t win any awards, it’s getting better, with the light rail expanding. A level of livability that makes renters stick around.

12. Seattle, Washington

Forget New York. If you want to invest in a major city that’s got better rental yield potential, you can’t go past Seattle. With a constant buzz of innovation and a booming economy, Seattle’s making a name for itself. But it’s not just about the work—vibrant art, food scenes, and stunning natural beauty make it the total package.

Economic and Demographic Growth

Seattle’s a tech powerhouse, home to giants like Amazon and Microsoft. This fuels a strong economy, attracts a young, well-educated workforce, and is behind the city’s recent population boom. That said, it’s not just tech—a major port, healthcare, and aerospace are also economic drivers.

Rental Yields

Seattle’s rental market is competitive, with high demand and rents to match (median rent is $1,950). While rental growth has cooled slightly lately, the long-term outlook remains strong. Seattle’s steady job growth and limited housing supply mean those high rents aren’t going anywhere.

Quality-of-Life Factors

Seattle has a happenin’, artsy vibe, vibrant coffee culture, and a walkable, European-inspired downtown. Plus, with mountains and forests at its doorstep, the outdoorsy lifestyle is real.

13. Jacksonville, Florida

Once a favorite destination for retirees, Jacksonville is now on the move. It’s attracting new businesses and residents at a rapid clip, and the city’s investing heavily in its future, with major downtown revitalization projects in the works. While the rental market has seen some recent cooling, this growth suggests big opportunities for investors.

Economic and Demographic Growth

Jacksonville’s diverse economy has been powering steady growth. It’s a major logistics hub and military town, and it’s attracting everything from manufacturing to healthcare. Major new development projects, particularly downtown, show confidence in future growth—investors and homeowners like to see that.

Rental Yields

Jacksonville’s rental market is a bit of a mixed bag right now. Rents have been softening recently (they’re down 7% over the past year). That said, the overall demand for housing remains strong, which bodes well for the long term.

Quality-of-Life Factors

Jacksonville is not all business—the city has top-notch hospitals (HCA Florida Memorial and Orange Park Hospitals are ranked among America’s 250 best hospitals) and a surprisingly vibrant art scene. Plus, there are beaches and tons of parks for when you need to get outdoors.

14. Atlanta, Georgia

Atlanta is constantly reinventing itself, attracting major corporations and a diverse workforce. Its blend of old-school Southern hospitality and cutting-edge ambition creates a unique vibe that draws in renters of all kinds. With new developments popping up everywhere, Atlanta’s real estate market is just as dynamic as the city itself.

Economic and Demographic Growth

Don’t sleep on Atlanta. It’s got a surprisingly diverse economy, with big players in healthcare, manufacturing, and trade. Plus, steady population growth and an uptick in job opportunities means Atlanta is attracting new businesses and residents at a rapid clip.

Rental Yields

Atlanta’s rental yields are seriously impressive, clocking in at 10.3%. What’s driving this? High demand from renters, thanks to the strong economy and a constant influx of newcomers. While rents have softened slightly recently, the overall market remains healthy, suggesting those strong yields are here to stay.

Quality-of-Life Factors

Atlanta is a city where people want to stick around. It’s got top-notch universities and a killer arts and music scene. Even the public transit’s decent, with MARTA making it easy to get around without a car. This livability isn’t just good for residents, it’s good for landlords too—happy renters are less likely to skip town.

15. Cleveland, Ohio

Cleveland may be the underdog, but it’s got that Midwestern grit. Think of a city that’s built on manufacturing and a great work ethic. It’s now home to major healthcare institutions a growing tech scene, and it hasn’t forgotten its blue-collar roots.

Economic and Demographic Growth

Cleveland’s economy has faced challenges, but the story’s not over. While population has flatlined, the city’s diverse industries are powering modest but steady growth. The city is actively investing in revitalization projects, particularly in key neighborhoods, which could further boost growth down the road.

Rental Yields

Investors, here’s the good news: Cleveland’s rental market is outperforming. Rent growth has soared to just shy of 40% since 2014, and those yields are significantly higher than the national average. Why? It’s all about affordability. Cleveland’s got some of the cheapest real estate in the country, but rents are solid.

Quality-of-Life Factors

Cleveland’s no fancy coastal city, but it’s got what matters: good schools, world-class healthcare (the Cleveland Clinic ranked number two in the world for the sixth consecutive year), and a surprisingly vibrant arts and culture scene.

Learn more: buying a rental property before your first home.

Metrics That Define the Best Rental Investment Location

Choosing the right city is key to a profitable rental property. But how does the smart money know where to buy investment property in 2024? By following the trends, of course. We’ve broken down the metrics we used to help you spot a winning market:

Rental Yield

Rental yield is all about the return on your investment. It’s expressed as a percentage and reflects how much money you make from your property each year relative to its purchase price. Let’s say you buy a $200,000 single-family home with a 10% rental yield. That means you’d bring in $20,000 annually in rent (before expenses). High rental yields mean more cash flow and a better cushion to cover expected and unexpected costs, making it a key factor for profitability.

Job Growth

Cities with booming job markets are magnets for new residents. It translates to a higher demand for housing, which benefits rental property investors in two ways. First, it reduces the risk of your property sitting vacant—you’re more likely to find qualified tenants quickly. Second, a strong job market often leads to rising wages, allowing you to potentially charge higher rents and boost your returns.

GDP Growth

Gross Domestic Product (GDP) measures the economic output of a local area. Strong GDP growth indicates a thriving business environment where people have money to spend, including on rent. Areas with expanding economies tend to see property values appreciate over time, which is great news for investors looking to build wealth through appreciation over both the short and long-term.

Population Growth

A growing population creates a natural demand for housing. An uptick translates to lower vacancy rates (more on that later), and the potential for rent increases as more people compete for a limited number of available rentals. Cities experiencing steady population growth are prime targets for rental property investors.

Vacancy Rates

Vacancy rate is the percentage of rental units sitting empty. High vacancy rates signal a weak rental market. Cities with consistently low vacancy rates are typically landlord-friendly, offering more stability and predictability for your investment.

Median Home Price

Median home price tells you the typical cost homebuyers are shelling out for a property in a specific area. While sky-high prices might suggest great potential returns down the road, they can also make it difficult to enter the market and return lower rental yields, especially during periods of high-interest rates. The best investment locations offer a balance—affordability for buying in today’s housing market and the potential for home values to appreciate over time.

Property Taxes

Property taxes are a major ongoing expense for landlords. High tax rates can significantly eat into your rental income, making even a strong rental market with high yields less attractive. Considering property taxes helps you identify locations where your investment can generate a healthy return after factoring in all the costs.

Learn more: how to buy your first rental property.

Our Methodology for Selecting the Best Real Estate Markets

We’re not just picking cities we like—there’s a method to our madness. Here’s why we ranked our list of top rental markets in the order we did:

Tools and Models

We crunched the numbers to find patterns in the data. This involved:

• Metrics like median home prices and vacancy rates were normalized so there was comparability across different scales. For other metrics, such as vacancy rates and property taxes, we inverted the values to align them positively with investment potential.
• We assigned weights to each metric based on its perceived impact on rental investment potential, allowing us to quantify the attractiveness of each market.

Rationale Behind Metric Weighting

Not all stats are created equal. Here’s how we figured out which ones would make the biggest impact on your investment:

• Rental yield shows the profitability of rental investments. Weight: 20%
• Job growth signifies economic opportunity and stability. Weight: 20%
• GDP growth indicates economic health. Weight: 15%
• Metropolitan area population growth reflects population trends. Weight: 15%
• Vacancy rate represents the percentage of unoccupied rentals. Weight: 10%
• Median home price affects investment entry cost. Weight: 10%
• Property taxes affect ongoing investment costs. Weight: 10%

Data Sources

Our analysis is grounded in data from the following sources:

• Gross rental yield was taken from Numbeo.
• Job growth figures were pulled from the US Bureau of Labor Statistics.
• GDP Growth was extracted from the American Growth Project report by the Kenan Institute.
• Metro population growth was sourced from MacroTrends.
• Vacancy rates were compiled from SmartAsset and Realtor.
• Median home prices were gathered from Zillow.
• And property taxes by state were obtained from WalletHub.

Learn more: tips to buying rental property out of state.

Your Path to Successful Rental Property Investment in 2024

And once you’ve landed a data-backed investment? Who’s going to handle all the tediousness of running a rental property?

Ziprent’s got your back. Our expert team doesn’t just manage properties; we maximize returns. From finding top-tier tenants to handling any curveball maintenance throws your way, we turn your data-driven decision into a seriously profitable asset.

Ready to see those returns roll in? Jump over to your rental property management services, and let Ziprent maximize your return on investment.