Realtor.com has found that, amid rising home prices and mortgage rates, real estate investors are still finding hidden gems in affordable metros across the country, with Dayton, Ohio, standing out as the top destination for property investment in 2024.
“For buyers interested in investing in rental properties or other real estate, it’s key to know which areas are both affordable and in high demand to be able to capitalize on any investment opportunities, especially with today’s higher prices and rates,” said Danielle Hale, Chief Economist at Realtor.com. “With low vacancy rates and strong demand, the markets we’ve highlighted as top markets for investment opportunity offer a great mix of affordability and growth potential. These spots give aspiring investors a chance to tap into long-term growth and set themselves up for solid returns as the market shifts.”
Following Dayton, the top 10 markets targeted by investors include:
- Rochester, New York
- Cleveland-Elyria, Ohio
- Pittsburgh
- Knoxville, Tennessee
- Albany-Schenectady-Troy, New York
- New Haven-Milford, Connecticut
- Buffalo-Cheektowaga, New York
- Grand Rapids-Kentwood, Michigan
- Columbus, Ohio
What’s the Lure?
The top markets for real estate investment are noted for their affordability, low rental vacancy rates, rising rents, and sustained buyer demand, making them prime candidates for investment. Realtor.com research indicates that these markets saw nearly double (1.95x) the average page views per property compared to the national trends, with home prices an average of 21.7% lower than the national average, offering compelling value for investors.
Rental vacancy rates in these hotspots averaged just 4.8% so far in 2024, well below the national average of 6.6%, signaling a strong rental market with minimal property turnover. Furthermore, 13.8% of buyers in these markets were investors in Q1 2024, 1 percentage point below the national average, but up 4.4 percentage points from 2019 levels, reflecting a growing trend of real estate investment since pre-pandemic levels despite economic challenges.
Dayton, Ohio topped the list for investment opportunity with its below-average home prices and robust demand, boasting a low 4.7% rental vacancy rate in early 2024. Investor activity has picked up over the past five years, with 13.7% of buyers in Q1 being investors, just shy of the national average.
Other Midwest metros, such as Cleveland, Ohio; Pittsburgh; and Grand Rapids, Michigan also offer strong returns for investors, thanks to their low prices and steady demand. Climbing home prices in these markets reflect sustained buyer interest, while relatively low home prices mean the typical monthly mortgage payment is lower than the U.S. average.
“As the rental market eases in many areas, the Midwest and Northeast stand out for their combination of affordability and stability,” said Hannah Jones, Realtor.com Senior Economic Research Analyst. “These regions offer investors a prime chance to secure steady rental income and tap into growing demand, making them attractive for both seasoned and first-time investors alike.”
While the South and West have historically been popular regions for investors, recent affordability challenges and rising inventories have shifted focus to the more stable, growth-ready markets in the Midwest and Northeast, and only a handful of markets from the South and West made the list. Knoxville, Tennessee is the sole Southern city to make the list, while Fresno, California and Albuquerque, New Mexica stand out in the West as top investment spots for their notable demand and price growth, despite their higher home prices.
Click here for more on Realtor.com’s study of the nation’s top investment markets.
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