A quick list of the best places for real estate investments in USA.
In hindsight, everything is 20:20. You have often heard ‘Knowledge is power’. My take is ‘Knowledge is power. Foresight is even more powerful’. Just imagine what you could have done if you had the foresight that bitcoin was going to blow up like it did. Ten years ago, bitcoin was $0.01. Even if you had brought $100 in 2012 and held it, you could have had $40M (as of Feb 2021) sitting in your account right now. For all you know, it could have gone the other way too. To be honest, no one knows and no one can predict with 100% certainty what is going to happen.
So how do you deal with this kind of uncertainty?
All you can do is guesstimate what will be the hottest opportunities/areas/markets in the next few years with the data that is available today. Performing due diligence and being empowered with the right kind of data is key to success in the long term. Once you have identified the opportunities, build a diversified portfolio and have a tolerable level of exposure to those opportunities.
In the real estate context, for example, if you live in an area and have already purchased a primary home in the area, you can buy an investment property in another metro area so that you have a diversified real estate portfolio. And you needn’t be a seasoned investor to achieve that. All you need to do is to do some basic research and start investing even in the smallest way possible. So with currently available data like job growth, population growth, vacancy rate, property tax rates, etc., I have put together a list of metro areas that could potentially shine and perform better than the rest of the market over the next 5 years. And keep in mind that in real estate the holding periods are usually measured in years as opposed to stocks where the holding periods can even be just a few microseconds. So when you are planning or researching real estate investing, you should be looking at multi-year trends for the best effect. Anyway, without further ado, let’s dive into my personal favorites for the top 10 best places to invest in 2021.
10. Denver, CO
2010 – 2019 Population Growth Rate: 16.7% (Source: US Census Bureau)
LitPoodle Region Score: 66/100 (based on job growth, rental vacancy, etc.)
Gross Rental Yield City Center: 7.16% (Source: numbeo.com)
Average Effective Tax Rate: 0.49% (Source: smartasset.com)
LitPoodle Total Score: 227/300 (based on all the said factors)
9. Phoenix, AZ
2010 – 2019 Population Growth Rate: 18% (Source: US Census Bureau)
LitPoodle Region Score: 59/100 (based on job growth, rental vacancy, etc.)
Gross Rental Yield City Center: 8.25% (Source: numbeo.com)
Average Effective Tax Rate: 0.62% (Source: smartasset.com)
LitPoodle Total Score: 228/300 (based on all the said factors)
8. Las Vegas, NV
2010 – 2019 Population Growth Rate: 16.1% (Source: US Census Bureau)
LitPoodle Region Score: 73/100 (based on job growth, rental vacancy, etc.)
Gross Rental Yield City Center: 9.64% (Source: numbeo.com)
Average Effective Tax Rate: 0.53% (Source: smartasset.com)
LitPoodle Total Score: 229/300 (based on all the said factors)
7.Austin, TX
2010 – 2019 Population Growth Rate: 29.8% (Source: US Census Bureau)
LitPoodle Region Score: 71/100 (based on job growth, rental vacancy, etc.)
Gross Rental Yield City Center: 8.58% (Source: numbeo.com)
Average Effective Tax Rate: 1.35% (Source: smartasset.com)
LitPoodle Total Score: 235/300 (based on all the said factors)
6.Raleigh, NC
2010 – 2019 Population Growth Rate: 23% (Source: US Census Bureau)
LitPoodle Region Score: 78/100 (based on job growth, rental vacancy, etc.)
Gross Rental Yield City Center: 7.35% (Source: numbeo.com)
Average Effective Tax Rate: 0.88% (Source: smartasset.com)
LitPoodle Total Score: 237/300 (based on all the said factors)
5.Dallas, TX
2010 – 2019 Population Growth Rate: 19% (Source: US Census Bureau)
LitPoodle Region Score: 78/100 (based on job growth, rental vacancy, etc.)
Gross Rental Yield City Center: 11.62% (Source: numbeo.com)
Average Effective Tax Rate: 1.93% (Source: smartasset.com)
LitPoodle Total Score: 259/300 (based on all the said factors)
4.Charlotte, NC
2010 – 2019 Population Growth Rate: 17.5% (Source: US Census Bureau)
LitPoodle Region Score: 80/100 (based on job growth, rental vacancy, etc.)
Gross Rental Yield City Center: 9.5% (Source: numbeo.com)
Average Effective Tax Rate: 0.77% (Source: smartasset.com)
LitPoodle Total Score: 260/300 (based on all the said factors)
3.Houston, TX
2010 – 2019 Population Growth Rate: 19.4% (Source: US Census Bureau)
LitPoodle Region Score: 74/100 (based on job growth, rental vacancy, etc.)
Gross Rental Yield City Center: 11.29% (Source: numbeo.com)
Average Effective Tax Rate: 1.82% (Source: smartasset.com)
LitPoodle Total Score: 260/300 (based on all the said factors)
2.San Antonio, TX
2010 – 2019 Population Growth Rate: 19.1% (Source: US Census Bureau)
LitPoodle Region Score: 64/100 (based on job growth, rental vacancy, etc.)
Gross Rental Yield City Center: 12.67% (Source: numbeo.com)
Average Effective Tax Rate: 1.69% (Source: smartasset.com)
LitPoodle Total Score: 264/300 (based on all the said factors)
1.Orlando, FL
2010 – 2019 Population Growth Rate: 22.2% (Source: US Census Bureau)
LitPoodle Region Score: 81/100 (based on job growth, rental vacancy, etc.)
Gross Rental Yield City Center: 10.12% (Source: numbeo.com)
Average Effective Tax Rate: 0.83% (Source: smartasset.com)
LitPoodle Total Score: 266/300 (based on all the said factors)
The above ranking is purely based on a quantitative analysis. If you want me to pick the top 3 cities to invest in 2021, purely from a qualitative angle, I would then say Austin, Miami and Denver. But housing in these cities has gotten pricey just in the last few months. So any investment in rental properties in these areas would be more of a bet on further capital gains (through home value appreciation) than on the rental yield since if you are taking a mortgage out the already high home prices will dent the monthly cash flow.
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