Due to the explosion in property prices in recent years, many are looking to diversify their investments by expanding into the real estate sector. But not all real estate is a good investment; those looking for the best value for money need to balance property prices with taxes, vacancy rates, insurance and the list goes on.
As such, Policygenius, an online insurance marketplace, has curated a list of the best places investors should look for due to their attractive investor climate.
Using data from Zillow and the US Census Bureau, Policygenius analyzed the top 600 metropolitan areas using six metrics to find the most attractive cities to invest in. Categories include: home value, home value appreciation, effective property tax rate, home rental value ratio, vacation rental rate, and rent / income ratio.
The top 10 cities found by Policygenius are the following:
1. Youngstown, Ohio
- Population of over 60,000 people and part of a large metropolitan area that includes Warren and Boardman and contains approximately 540,000
- A short drive from Cleveland and Pittsburgh
- “Youngstown, a former city of steel, has seen a resurgence in recent years, including the launch of the Youngstown Business Incubator”
- According to the report, low house prices combined with a high appreciation rate and low vacancy rates make Youngstown a good prospect.
2. Detroit, Michigan
- The largest city in Michigan
- Population of just under 640,000 inhabitants and part of a metropolitan area that is home to about 4.3 million people.
- Home of the “Big Three” American auto companies, as well as Quicken Loans, Ally Financial and DTE Energy
- In 2021, Apple announced the opening of its first Developer Academy in the city
- According to the report, Detroit boasts low house prices and a very high appreciation of home value, which together “make it a breeze to get into the ground floor of this exciting American success story.”
3. Spring Hill, Florida
- Located 40 miles from Tampa in “an unincorporated area that is part of the metropolitan area that includes Tampa, St. Petersburg and Clearwater”
- Described as “a lively suburb … which attracts people for its convenience and central location”
- Home values in the area stand at less than $ 250,000 and home value appreciation stands at around 85%
4. Pueblo, Colorado
- Population of nearly 112,000, the ninth largest city in Colorado
- Home of the first steel mill powered largely by solar energy
- It includes a “Riverwalk” that runs along the Arkansas River, as well as an abundance of “galleries, museums and public spaces”.
- The home value appreciation rate is 80%.
5. Birmingham, Alabama
- Population of just over 207,000 inhabitants, within a larger metropolitan area that is home to 1.2 million people
- Once a manufacturing center, today “one of the largest banking centers in the United States
- Revitalized downtown area combined with low house prices and a high rent to home value ratio
6. Cleveland, Ohio
- Population of just over 370,000, within a larger metropolitan area of over 2 million people
- Strong hub for technology: “The state-funded Cleveland Innovation District was formed in 2021 to increase funding for health research work”
- Average home value of less than $ 100,000 and a home value appreciation of nearly 100%
7. Colorado Springs, Colorado
- The city is currently “experiencing a real estate boom as people move from Denver and other states to the city for its clean air, mild climate and great quality of life.”
- Just under 500,000 residents and a diverse economy, including defense contractors and technology companies
- Home value is nearly $ 428,000, but “a high home appreciation rate and low rental vacancy rate make Colorado Springs a great option for real estate investors.”
8. Lehigh Acres, Florida
- Described as “a fast growing suburb east of Fort Myers”
- Low vacation rental rate and “relatively low house prices for the area”
9. Palm Bay, Florida
- The largest city in Brevard County
- It houses just under 120,000 people
- Part of the “Space Coast”: the city “has a diverse economy that includes aerospace and defense industries”
- Low vacation rental rate
10. Phoenix, Arizona
- Fifth largest city in the United States
- One of the fastest growing economies in the country
- Strong real estate market
- House value appreciation rate of 81%
To view a complete list of Policygenius findings, Click here.