As we reach the end of 2024, the phrase that best captures the real estate investing landscape is "cautiously optimistic." Although the surge in home prices seen during the frenzy of 2022 has decelerated, inflation has also eased, which should help lower construction costs. Additionally, the Federal Reserve's decision to pause interest rate hikes is making mortgages more accessible for real estate investors. If you're feeling cautiously optimistic about the future of real estate or simply seeking to add stable income to your portfolio, here are the top recommendations from experts for residential real estate investments this year.
Top Cities for Residential Real Estate Investing in 2024
In the shifting terrain of residential real estate, certain cities are emerging as beacons of opportunity for investors looking to capitalize on the evolving market dynamics in 2024. As urban landscapes adapt to new demands and economic conditions stabilize, these locations stand out not only for their growth potential but also for their resilience amidst market fluctuations. From thriving metropolitan hubs to promising suburban areas, the following six cities have been identified by industry experts as the most attractive destinations for real estate investments this year. Each city offers unique advantages, making them ideal candidates for investors eager to diversify their portfolios and embrace the opportunities that 2024 has to offer.
1) Nashville, TN
Over the past decade, Nashville has emerged as one of the hottest real estate markets in the nation, fueled by significant growth in its renowned entertainment industry. The city's vibrant country music scene continues to expand, with music companies, studios, and startups creating numerous high-paying jobs in the sector.
While the housing market in Nashville has shown signs of slowing recently, this is a relative term. Even with a slight dip in growth, demand for housing still significantly outstrips inventory.
Vanderbilt University also plays a crucial role in Nashville's economy. With over 12,000 students and housing Vanderbilt University Medical Center—one of the nation's top hospitals—the institution has fostered a robust health and biomedical cluster that contributes to stable employment opportunities. Additionally, corporate operations in sectors like finance, education, and technology have been extending their presence in the area.
The unique combination of music and entertainment, along with health, finance, technology, and other industries, has made Nashville a prime destination for relocating workers. This population growth has dramatically reshaped the housing market. Despite median home prices now surpassing $520,000, the demand for affordable homes continues to exceed supply, creating promising opportunities for real estate investors. Furthermore, experts anticipate a remarkable 19% increase in home prices over the next year, presenting the potential for substantial returns on investment.
2) Austin, TX
The next city on our list of top cities to invest in residential real estate is Austin, Texas. The Austin real estate market has experienced significant growth, with some housing prices nearly doubling over the past decade. The city has also seen a substantial population increase, ranking first among major U.S. cities in this regard.
In recent years, tech companies from California's famous Silicon Valley have increasingly moved to Austin, drawn by its affordable housing and low median rent. This influx of high-paying tech jobs has attracted thousands of educated young professionals from across the U.S. seeking employment. However, the rapid population growth has far outstripped new housing construction. Additionally, Austin enjoys a low unemployment rate of 4.2%, significantly below the national average.
Austin adds approximately 150 new residents every single day, and builders can't keep up with demand. As a result, the city's rental vacancy rate sits below 5% — one of the lowest in the nation. Rents have skyrocketed as competition for limited units reaches a fever pitch. The incredibly tight rental market and Austin's rapidly rising home prices make the city ideal for rental property investment. According to realtor.com, median home prices in Austin now exceed $536,000 in Austin's urban core. That prices many first-time buyers out of the market for purchasing, yet the city still draws young professionals eager to live near downtown. This makes central city multi-family properties quite appealing.
This combination of factors—limited housing inventory, high rental demand, rising prices, and a robust job market—has contributed to a booming housing market in Austin.
3) Tampa, FL
Tampa is another top city for residential real estate investing in 2024. Over the past decade, Tampa has become one of Florida's most sought-after real estate markets. The metropolitan area boasts a diverse and thriving economy, driven by significant employers in healthcare, finance, technology, and logistics. Major companies such as JPMorgan Chase, Citigroup, and Amazon have established substantial regional hubs in Tampa.
This varied industrial landscape fosters consistent job and wage growth, contributing to low unemployment rates as tens of thousands of new positions are created each year across multiple sectors. Such steady economic expansion has spurred population growth.
In the past year alone, home prices have surged, with the median purchase price now around $420,000. This dramatic increase is particularly noteworthy given the population growth of only 1.4%. Additionally, Tampa has witnessed a staggering 39% rise in rental prices, with the average rent costing $1,970. This growth rate significantly outpaces national averages, positioning Tampa as one of the best places to invest in rental properties. With an imbalance between supply and demand, Tampa has evolved into a landlord's market, offering real estate investors opportunities for both rent growth and property appreciation.
4) Charlotte, NC
Charlotte has emerged as one of the most dynamic real estate markets in the Southeast. Over the past year, the city's real estate market has seen a notable increase of 16.4%, driven by several key factors. As a major financial hub, Charlotte hosts the headquarters of Bank of America, Truist Financial, and numerous other large banks.
Significantly contributing to this growth are the substantial population increase and job expansion. Major employers have been expanding their operations, attracting high-paying positions to the area. Additionally, Charlotte appeals to relocating professionals from diverse industries such as technology, manufacturing, and healthcare, with prominent companies like Honeywell, Siemens, and Atrium Health establishing a strong presence. This steady corporate growth has attracted young professionals to the city, further fueling population increase.
The influx of new residents has heightened demand for housing. Remarkably, home prices in Charlotte remain relatively affordable compared to other rapidly growing metropolitan areas. The median home price hovers around $400,000, positioning it as one of the more reasonably priced cities in the Southeast. This figure is significantly below the national average, allowing individuals to relocate to Charlotte and enjoy both affordable housing options and a thriving job market.
5) Columbus, OH
Columbus has emerged as one of the premier real estate markets in the Midwest, bolstered by significant anchors such as Ohio State University and several Fortune 500 corporate headquarters. As the largest university in the nation, Ohio State employs tens of thousands and annually produces a steady stream of graduates.
Major corporations, including Cardinal Health, Nationwide Insurance, and L Brands, are headquartered in the city, creating a robust foundation for economic growth. This concentration of large institutions contributes to consistent population increases, as graduates choose to remain in the area and employers continue to expand.
This growth fuels demand for both owner-occupied and rental housing. In contrast to many rapidly growing cities, home prices in Columbus remain relatively affordable, with the median price hovering around $275,000—below the national average. Furthermore, the city’s low rent-to-income ratio makes real estate investments in Columbus particularly appealing.
6) Phoenix, AZ
Over the past decade, Phoenix grew to one of the premier destinations in the Southwest for its company expansions and population growth. The metro area offers a warm climate and affordable cost of living that appeals to both businesses and residents. As the fifth-largest city in the United States, Phoenix has one of the fastest-growing economies in the whole country. They also boast a strong, and getting stronger, housing market and population growth.
Major corporations, including Intel, American Express, and Amazon, have opened large operations there, taking advantage of the business-friendly environment and lower taxes. This corporate expansion provides high-paying jobs across technology, finance, and other sectors.
One of the most important factors that put Phoenix, Arizona on the list of top cities to invest in residential real estate is the massive home value appreciation. The home price appreciation of 81% makes Phoenix a great option for any kind of real estate investor.
Phoenix is also an extremely affordable city to live in. With a median home price of only $269,175, Phoenix's market is not only affordable but growing at a rapid rate. It’s more reasonably priced housing, lower cost of living, available workforce, and stable climate allows Phoenix to maintain a strong economy and housing growth. With average home prices averaging around $430,000, it remains affordable compared to other Western hubs.
Due Diligence for Residential Properties
Conducting due diligence for residential properties is an important part of investing in residential real estate, regardless of where you're interested in purchasing property. Residential real estate due diligence involves researching and analyzing various aspects of a property to ensure that it is a sound investment. This process allows investors to identify any potential issues or risks associated with the property before making a purchase.
Some key areas to focus on during due diligence include:
Property condition: Inspecting the physical state of the property, including its structure, foundation, roof, plumbing, electrical wiring, and other components. It's important to assess any necessary repairs or maintenance costs.
Market trends: Researching current market conditions in the area where the property is located. This includes assessing factors such as population growth, job market stability, and housing demand.
Comparable properties: Analyzing recent sales data for similar properties in the area to determine the fair market value of the property.
Title search: Reviewing the property's title history to ensure there are no liens, encumbrances, or other legal issues that could affect ownership.
Zoning and restrictions: Checking local zoning regulations and any restrictions on the property that may impact its use or development potential.
Rental income potential: If purchasing a rental property, evaluating the current rental market and expected rental income for similar properties in the area.
There are various types of real estate investment risks, but by conducting thorough due diligence, investors can make informed decisions about their residential real estate investments and mitigate potential risks. Additionally, it allows them to negotiate better terms with sellers based on any identified issues or concerns.
LandApp is a tool for residential real estate buyers, sellers, and investors to conduct initial due diligence with the click of a button. LandApp can help you conduct initial due diligence with our extensive property data. With LandApp, you can analyze any residential property's environmental risks, contamination risks, physical features, zoning, sales history, and more.
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