With the housing market in relative disarray, renting is on an upswing.
Actually, that might be a bit of an understatement.
All over the country, rental prices are soaring while vacancy numbers are lower than they’ve ever been in history.
That– among other things– might have compelled you to consider looking at purchasing another rental property to cap out 2023– or beyond.
To help with that, we scoured the latest housing data to identify some of the best places to buy rental property in 2023.
Ready to see what we found?
Let’s see what the data says.
Best Places to Buy Rental Property
There are a ton of factors to take into consideration when considering where to purchase your next rental property.
We don’t claim to have covered every single factor, but we did look at many different data sets to make this list.
- Population growth
- Price-to-rent ratio
- Average rental price growth
- Median purchase price
- And more
We pulled that data from a number of different sources. They include:
The goal is to present a list based on numbers rather than opinion.
However to repeat: Keep in mind that it’s impossible for this list to take into consideration every possible factor.
Be sure to do your own research before deciding where to purchase your next (or first) rental property to make the best choice for you and your financial goals.
With that said, here are 7 of the best places to buy rental property in 2023:
1. Cleveland, Ohio
Cleveland, Ohio makes the list most notably for its decent price-to-rent ratio at 0.64% as well as its affordability, with median home prices below $200,000.
It has a growing downtown area that is attracting both Fortune 500 companies as well as Millennials and Gen Zers looking to work for them, so it’s expected to see greater growth levels in the next several years.
However, it doesn’t quite have the same levels of growth in population and employment that some of the other options on this list have currently.
- Median purchase price: $199,727
- Median monthly rent: $1,278
- Average rental price growth: 19%
2. Albuquerque, New Mexico
Albuquerque, New Mexico is one of the most notable cities within a state that is seeing high population growth in general.
The average rental price growth is a whopping 13% making it one of the highest on this list.
In addition, its 1-year job growth is very high at nearly 6%, 24% higher than the national average.
- Median purchase price: $277,530
- Median monthly rent: $1,385
- Average rental price growth: 13%
3. Charlotte, North Carolina
The last city on our list and the second in North Carolina, Charlotte is the largest and fastest-growing city in North Carolina.
A telling sign of a growing market, Charlotte has become an NC hotspot for Millennials, though in general its population growth has been significant at nearly 200% greater than the U.S. average.
In addition, rental price growth is at a solid 9% while 1-year equity growth is 25%, and job growth above 3%.
- Median purchase price: $329,961
- Median monthly rent: $1,693
- Average rental price growth: 9%
4. Columbus, Ohio
Our second Ohio location, Cleveland is one of the fastest growing cities in Ohio.
But most notably, it boasts an incredibly high 27% average rental price growth, making it by far the highest on this list.
Low median purchase price could make it an easy place to get started if it’s your first property, plus local appreciation rates are high for rental properties in the area.
- Median purchase price: $217,100
- Median monthly rent: $1,164
- Average rental price growth: 27%
5. Raleigh, North Carolina
The second of two North Carolina’s on our list, Raleigh is one of the fastest growing cities in the U.S.
It has a high average rental price growth of 8% with a good price-to-rent ratio.
In addition, it recently ranked on the Wall Street Journal/Realtor.com’s 2021 Emerging Housing Market Index as a great pick for investors.
- Median purchase price: $220,600
- Median monthly rent: $1,341
- Average rental price growth: 8%
6. Denver (and extended metropolitan area), Colorado
Denver and its extended metropolitan areas have several things to like.
First, its average rental price growth sits at a respectable 4.7% while an unusually high 51% of Denver homes are renter-occupied.
In addition to this, the area itself is rapidly growing in population, making it a solid pick.
- Median purchase price: $374,400
- Median monthly rent: $1,712
- Average rental price growth: 4.7%
7. San Bernardino, California
San Bernardino, California, including everything from south-west So Cal towards Riverside to further east at Ontario, is another great option.
It’s attracted many working in and around the L.A. area looking for something more affordable without living too far away from work.
The area saw a 2.9% average rental price growth over the past year, recently ranking 4th on Realtor.com’s fastest-growing rent list.
- Median purchase price: $392,000
- Median monthly rent: $1,383
- Average rental price growth: 2.9%
Purchasing your property
Deciding where to purchase your next rental property involves taking into consideration innumerable factors that aren’t all economic.
We touched on just some of the most notable statistics and data points, but what do you think?
Do you think some of these are great opportunities? Are there other potentially better cities to look to in the near future?
Either way, I hope this list helped you start to think about a few new locations that may be your next target.