Best real estate investment locations in 2022

Real estate investments are a way to diversify a portfolio, which is typically a requirement for prudent investing. According to studies conducted by the Federal Reserve Bank of San Francisco, real estate has been the best long-term investment throughout the modern era. [1]
However, certain places are better bets for real estate investment than others, in terms of investment property prices, the likelihood of receiving sufficient rent to cover expenses, and house value appreciation. Using Zillow and U.S. Census data, we analyzed the 600+ major U.S. cities and crunched the figures to determine the best places to invest in real estate in 2022.

The top 25 cities for real estate investment in 2022

1. Youngstown (Ohio)

Home value: $42,867 Home value appreciation: 77% 1.54 percent effective property tax rate The ratio of rent to home value is 18.53 Rental vacancy rate: 3.20% Rent to income ratio: 28.50%

Youngstown, OH, the largest city in Mahoning County, is the greatest place to invest in real estate in 2022. It is an hour’s drive from both Cleveland and Pittsburgh and has a population of approximately 540,000. Youngstown, a former steel town, has experienced a renaissance in recent years, including the establishment of the Youngstown Business Incubator and population increase. Due to the city’s extremely low house prices, strong rate of appreciation, and low rental vacancy rate, even novice investors can enter the market immediately and start recouping their expenses.

2. Detroit, Michigan

Home value: $58,213 Home value appreciation: 103% 2.90 percent effective property tax rate 16.99% rent to house value ratio Rental vacancy rate: 5.10% Rent to income ratio: 3.70%

Second on our list of the greatest areas to invest in real estate in 2022 is Detroit, Michigan. Detroit, the largest city in Michigan, with little under 640,000 residents, but the metropolitan area has 4.3 million residents. “Motor City” remains the core of the U.S. auto industry, despite the city’s infamous population decline since 1950. In 2013, Detroit was the largest U.S. city to declare for bankruptcy, but it successfully emerged in 2014 and has since been renowned for its rebirth. In addition to the “Big Three” American automakers, Quicken Loans, Ally Financial, and DTE Energy are headquartered in Detroit, and Apple said in 2021 that it would open its first Developer Academy there. Detroit’s inexpensive housing prices and astronomically high home value appreciation rate make it an ideal area to invest in real estate at the beginning of this thrilling American success story.

3. Spring Hill, Florida

Home value: $243,145 Home value appreciation: 85% 0.82% is the effective property tax rate 5.28 percent rent to house value ratio Rental vacancy rate: 3.10% Rent to income ratio: 30.50%

Spring Hill, Florida, located in Hernando County and 40 miles from Tampa, is the third-best city for real estate investments. Spring Hill, an unincorporated area that is part of the metropolitan area that includes Tampa, St. Petersburg, and Clearwater, is a thriving suburb with a population of just under one hundred thousand that attracts people because of its affordability and central position. With house values under $250,000 and a home value appreciation rate of 85%, Spring Hill is an excellent location for real estate investors.

4. Pueblo, Colorado

Home value: $263,343 Home value appreciation: 80% 0.63% is the effective property tax rate 3.64 percent rent to house value ratio Rental vacancy rate: 3.10% Rent to income ratio: 21.70%

Four on our list of the top towns to invest in real estate is Pueblo, Colorado. With a population of almost 112,000, the city ranks as the tenth largest in Colorado. Pueblo, one of the top steel-producing cities in the United States, is home to the first steel factory driven primarily by solar energy. Along the Arkansas River, the city has a vibrant Riverwalk, and the Creative Corridor is home to galleries, museums, and public spaces. Additionally, Pueblo is home to the yearly Colorado State Fair. Pueblo’s home value appreciation rate of 80 percent makes it a particularly appealing location for real estate investment.

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5. Birmingham, Alabama

Home value: $90,047 Home value appreciation: 69% 0.80% Effective property tax rate The ratio of rent to home value is 11.15 Rental vacancy rate: 9.40% Rent to income ratio: 11.10%

Birmingham, Alabama is fifth on our list of the greatest areas to invest in real estate. The population of the city is just over 207,000, but the metropolitan area has 1.2 million residents. Once a manufacturing hub in the South, Birmingham is now one of the largest banking centers in the United States. In recent years, its downtown has been revitalized as the city embraces its new slogan, “the diverse city.” With its extremely low property prices and strong rent-to-value ratio, Birmingham is an excellent alternative for real estate investors and investment properties.

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6.The city of Cleveland, Ohio

Home value: $96,455 Home value appreciation: 97% 2.08 percent effective property tax rate 8.95% rent to house value ratio Rental vacancy rate: 6.70% Rent to income ratio: 5.10%

Cleveland, Ohio is the sixth best city for real estate investment on our list. It has a population of somewhat more than 370,000, although the metropolitan region as a whole is home to more than 2 million people. The city’s technology sector, particularly health technology, is expanding; in 2021, the state-funded Cleveland Innovation District was established to provide funding for health research jobs. With a median home worth of less than $100,000 and a home value appreciation of nearly 100 percent, Cleveland is an excellent location for real estate investors.

7. Colorado Springs, Colorado

Home value: $427,896 Home value appreciation: 77% 0.45% Effective property tax rate 3.17 percent rent to house value ratio Rental vacancy rate: 3.50% Rent to income ratio: 7.50%

The seventh city on the list is Colorado Springs, Colorado, which is experiencing a housing boom as residents from Denver and other states migrate to the city for its clean air, mild weather, and high quality of life. The city boasts a broad economy that includes defense contractors and technology industries. While the average property price in Colorado Springs is approximately $428,000, the city’s strong rate of home value appreciation and low rental vacancy rate make it an excellent location for real estate investors.

8.Lehigh Acres, Florida

Home value: $236,569 Home value appreciation: 66% 0.75% is the effective property tax rate 5.55 percent rent to home value ratio Rental vacancy rate: 3.50% Rent to income ratio: 38.60%

At number eight, Lehigh Acres, Florida is a Fort Myers suburb with rapid population expansion. Lehigh Acres is one of the best destinations for real estate investors due to its incredibly low rental vacancy rate and comparatively affordable home prices for the area.

9. Palm Bay, Florida

Home value: $242,535 Home value appreciation: 64% 0.71% is the effective property tax rate 5.24 percent rent to house value ratio Rental vacancy rate: 4.00% Rent to income ratio: 33.00%

Nineth on our list of the finest places to invest in real estate is Palm Bay, Florida. Palm Bay, the largest city in Brevard County, is home to just under 120,000 individuals. The city is a component of the “Space Coast” and its diverse economy includes aerospace and defense sectors. A rental market with a low vacancy rate is particularly beneficial to real estate investors.

10. Phoenix, Arizona

Home value: $369,661 Home value appreciation: 81% 0.61% is the effective property tax rate 3.42 percent rent to house value ratio Rental vacancy rate: 5.40% Rent to income ratio: 2.20%

Tenth on our list is Phoenix, Arizona. Phoenix, the fifth-largest city in the United States, has one of the fastest-growing economies in the country, a robust housing market that is only growing stronger, and a growing population. A house appreciation rate of 81% makes it an excellent investment opportunity for real estate investors.

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10. Rochester, New York

Home value: $195,767 Home value appreciation: 87% 1.58 percent effective property tax rate 4.76 percent rent to house value ratio Rental vacancy rate: 4.10% Rent to income ratio: 8.40%

Buffalo, NY, the second-largest city in New York State, is ranked eleventh on our list of the top cities for real estate investment. Buffalo is an excellent alternative for real estate investors due to its inexpensive housing prices, rapid appreciation rate, and large pool of prospective renters.

12. Philadelphia, Pennsylvania

Home value: $225,336 Home value appreciation: 57% The effective property tax rate is 0.98 percent. 5.55 percent rent to home value ratio Rental vacancy rate: 6.10% Rent to income ratio: 2.10%

Philadelphia, Pennsylvania is known as the “City of Brotherly Love,” but it’s also a great city for real estate investors, ranking 12th on our list of the best cities to invest in real estate. Philadelphia has cheap property taxes, appealing housing values, and a healthy appreciation rate, making it an ideal market to invest in.

13.Pine Hills, Florida

Home value: $222,782 Home value appreciation: 97% 0.78 percent effective property tax rate 5.59 percent, rent to home value ratio Rental vacancy rate: 4.10% Rent to income ratio: 54.60%

Pine Hills, Florida, located west of Orlando in Orange County, is the thirteenth best city for real estate investors on the list. The region, which is home to 90,000 people within a wider metropolitan area of 1,100,000, is one of the most ethnically diverse in the region and is undergoing an ambitious rehabilitation initiative. Pine Hills is desirable to real estate investors due to its approximately 100 percent home price increase rate and inexpensive property taxes.

14. the city of Columbus, Ohio

Home value: $213,755 Home value appreciation: 68% The effective property tax rate is 1.81 percent. 5.39 percent rent to house value ratio Rental vacancy rate: 5.00% Rent to income ratio: 3.20%

Ohio’s capital and largest city, Columbus, is fourteenth on our list of the top cities for real estate investment. With a low cost of living and a diversified population, Columbus is an attractive destination for young families, and its property values and low rent-to-income ratio make it an excellent location for real estate investors as well.

15. Independence, Missouri

Home value: $165,893 Home value appreciation: 68% 1.33 percent effective property tax rate 6.25 percent rent to home value ratio Rental vacancy rate: 4.90% ratio of rent to income: 21.60%

Independence, Missouri is the fifteenth best city for real estate investment on our list. The city is an excellent alternative for real estate investors due to its affordable property prices, high home value appreciation, and low vacancy rate. Independence, the largest Kansas City suburb on the Missouri side, has an estimated population of 123,000.

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16. Huntsville, Alabama

Home value: $235,633 Home value appreciation: 54% 0.54 percent effective property tax rate 4.21 percent rent to house value ratio Rental vacancy rate: 6.00% 11.70% rent to income ratio

Huntsville, Alabama is the sixteenth best city for real estate investment on our list. Huntsville is the most populous city in Alabama, with a population of over 215 thousand; its metropolitan area has just under a half-million residents. The city is a center for aerospace and military technology, and its average home price is slightly over $235,000, with a 54% appreciation rate.

17. Cincinnati, Ohio

Home value: $92,359 Home value appreciation: 90% 2.13 percent effective property tax rate 9.17% rent to house value ratio Rental vacancy rate: 6.70% Rent to income ratio: 14.70%

17th on our list of the greatest cities for real estate investment is Dayton, Ohio. Dayton is an excellent market to enter at a low house price point due to its low home prices and high home value appreciation.

18. Memphis, Tennessee

Home value: $126,889 Home value appreciation: 71% 1.66 percent effective property tax rate 8.52 percent rent to house value ratio Rental vacancy rate: 9.40% Rent to income ratio: 4.30%

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Memphis, Tennessee ranks 18th on our list of the greatest areas to invest in real estate. Memphis is an ideal area for real estate investors due to its $126,889 average home value and its 71% home value appreciation.

19. Lafayette, Indiana

Home value: $185,549 Home value appreciation: 53% 0.7% is the effective property tax rate 5.28 percent rent to house value ratio Rental vacancy rate: 4.40% Rent to income ratio: 31.10%

Lafayette, Indiana is the nineteenth best city for real estate investment on our list. With home prices around $200,000, home value appreciation of 53%, and incredibly low property tax rates, Lafayette is a fantastic location for real estate investors wishing to enter the market.

20. Meridian, Idaho

Home value: $550,130 Home value appreciation: 118% 0.67 percent effective property tax rate 0.20 percent rent to home value ratio Rental vacancy rate: 0.70% Rent to income ratio: 3.00%

Meridian, Idaho is ranked number 20 on our list of the top towns for real estate investors, and if you can stomach the expensive home prices ($550,130), you may participate in a rapidly expanding real estate market. Meridian is an ideal city for real estate investors since home values have increased by 118% over the past five years, rental vacancies are below 1%, and the rent-to-income ratio is 3%.

21. Akron, Ohio

Home value: $96,742 Home value appreciation: 61% 2.06 percent effective property tax rate 9.41% rent to house value ratio Rental vacancy rate: 5.90% Rent to income ratio: 10.70%

Twenty-first on our list of the greatest cities for real estate investors is Akron, Ohio. Reasonable property values of just over $96,000 and home value appreciation of 61% over the past five years make Akron a desirable location for real estate investors.

22.North Las Vegas, Nevada (U.S.)

Home value: $346,295 Home value appreciation: 75% 0.61% is the effective property tax rate 4.18 percent rent to house value ratio Rental vacancy rate: 5.40% Rent to income ratio: 5.40%

North Las Vegas, Nevada, number 22 on our list of the best towns for real estate investment, is another desert paradise. Although house values are $346,295, the growth rate over the past five years has been 75%, and rental vacancy and rent-to-income ratios are quite low, the rental revenue forecast is positive.

23.Hammond, Indiana (U.S.

Home value: $146,237 Home value appreciation: 81% The effective property tax rate is 1.30 percent. 7.21 percent rent to house value ratio Rental vacancy rate: 4.90% Rent to income ratio: 36.90%

Indiana’s Hammond is the number 23 city for real estate investment on our list. With a median home price of $146,237 and a five-year rate of home value appreciation of 81%, Hammond appears to be a solid investment opportunity for prospective investors.

24. Indianapolis, Indiana

Home value: $192,802 Home value appreciation: 62% 5.55 percent effective property tax rate 1.02 percent rent to home value ratio Rental vacancy rate: 7.70% Rent to income ratio: 3.20%

Indianapolis, Indiana, ranks 24th on our list of the top cities for real estate investors. Indianapolis is an excellent market for real estate investment due to its high property prices ($192,802), low rent-to-income ratio (0.4), and strong appreciation rate (62%).

25.Fresno, California (25th)

Home value: $330,616 Home value appreciation: 61% 0.82% is the effective property tax rate 3.65% rent to house value ratio Rental vacancy rate: 3.70% Rent to income ratio: 7.20%

Fresno, California is number 25 on our list of the greatest locations to invest in real estate.

Fresno, the lone California city in the top 25, has relatively low property values for the state and a healthy appreciation rate of 61%. It also has a low rental vacancy rate and a low rent-to-value ratio, indicating that investors have a strong chance of finding cost-covering tenants.

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