At the beginning of the COVID-19 pandemic, a protracted recession seemed all but inevitable. And for a while, the US real estate market stagnated as uncertainty reigned and sales slumped. But it didn’t stay that way for long.
By early this year, the crisis had reached a turning point and the economy began to recover. What has followed in the real estate market is being described by experts as a frenzy. And that means there’s plenty of opportunities for smart investors to profit from the rebound.
But to do that, investors need to target the cities that provide the best odds of success. And to help them do that here’s a look at the best cities for real estate investment in the second half of 2021 and beyond.
1. Phoenix/Scottsdale, Arizona
By far, the hottest city for real estate investment right now is the Phoenix-Scottsdale metropolitan area in Arizona. It’s an area that’s seeing a big influx of inhabitants, driven by a flood of high-paying jobs appearing in the area. As a result, inventory of Phoenix homes for sale has been at historic lows for the past 3 years.
But for investors, there’s even more to like. The city itself allows short-term, Airbnb-style rentals, and regulation exists exclusively at the homeowner association level. That means buyers can turn their properties into revenue-generating vacation rentals at will.
And, because Arizona is a tax-friendly state with a tight housing market, there’s an excellent chance of property appreciation without the threat of big tax bills. And in a state that offers higher living standards at a lower price than places like California and New York, that’s a recipe for long-term profitability.
2. Boise, Idaho
Next on the list is the city that ranked number one in Realtor.com’s metro housing forecast for 2020 – Boise, Idaho. It’s an area that continued to perform well even as the pandemic raged. And now that local employment is back to its pre-pandemic levels, the local real estate market is heating up again.
That means investors can ride a wave of housing demand and continued tight supply to consistent profits by investing strategically there. With strong population growth and a low cost of doing business, there are few cities with a more attractive environment for investors. And those that act now can still find properties to bundle into a thriving real estate portfolio.
3. Tampa, Florida
It isn’t often that a city with a large population can rank among the best real estate investing options. But Tampa, Florida – home to more than 4 million residents – managed the feat this year. It’s because the city combines a desirable residential area with a high-traffic tourist destination that assures continuous demand for both long-term and short-term housing.
And yet, the median home value in the area has only recently passed $300,000. That represents a 17% spike over the past year, indicating that there’s booming demand and a tightening supply. Those factors will continue to drive up prices in the area for the foreseeable future. And for investors that has created a rare opportunity to buy low and sell high with very little turnaround time. And with the local population still growing, the city offers strong rental revenue as well.
4. Charlotte, North Carolina
The next city on the list of hot real estate investment markets is in the middle of five consecutive years of home price gains. It’s Charlotte, North Carolina, and it’s a city with plenty of things for investors to like. The local market there is ideal for a variety of real estate investment strategies. Its climbing prices make it perfect for house flippers, buy and hold strategies, and multi-family rentals.
What’s most attractive is the city’s high median income of over $53,000 per year, which ensures a steady stream of qualified buyers for homes. And, it’s a growing financial center with a banking sector second only to New York City in size. That means there’s plenty of growth in Charlotte’s future to fuel a strong real estate market there for years to come.
5. Reno, Nevada
Last but not least, the “biggest little city” of Reno, Nevada rounds out the list of top real estate investment markets in 2021. It’s a place that tends to get overlooked due to the massive popularity of Las Vegas, but that offers a great opportunity for savvy investors. And there’s plenty of reasons why.
The first is that Nevada offers a low-tax, business-friendly environment that’s luring big companies to the state. Well-known firms like Tesla, Intuit, and Panasonic all have facilities in the area, which is driving wage and population growth. And, although it’s far more low-key than its glitzy neighbor Las Vegas, Reno draws just as many tourists each year. Add increasing demand and decreasing supply to the mix, and you end up with an irresistible opportunity for investors.
An Investment Boom
Right now, the US real estate market is on the verge of a major surge. And investors that target the five cities listed here stand a great chance of turning that surge into a big opportunity. But as with all investments, timing is critical. So smart investors should move with haste to find properties in these five cities to add to their portfolios before others beat them to it.