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Best U.S. cities to own an investment property in

Salt Lake City tops our list

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By Susan Meyer Info icon
Updated March 15, 2024
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Susan Meyer

Senior Editorial Manager

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  • Licensed Insurance Agent — Property and Casualty

Susan is a licensed insurance agent and has worked as a writer and editor for over 10 years across a number of industries. She has worked at The Zebr…

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Ross Martin

Insurance Writer

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  • 4+ years in the Insurance Industry

Ross joined The Zebra as a writer and researcher in 2019. He specializes in writing insurance content to help shoppers make informed decisions.

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As home values continue to rise throughout much of the country, many people are seeing real estate as an enticing opportunity to grow their wealth. In fact, a 2022 study revealed that 43% of Americans under the age of 40 would consider renting their own living space while purchasing an investment property elsewhere[1]. 

Investors across all age groups don't feel bound by geography and are willing to invest out-of-state to access more appealing markets. So where are the best places to own an investment property? The Zebra looked at the 50 most populous U.S. cities and found the top 10 for real estate investing. We looked at the following data points:

If you've ever considered purchasing an investment property to rent out, this list is a must-read no matter where you live.

#1: Salt Lake City, Utah

Salt Lake City tops our list as the best city for investment properties. Homeowners insurance costs are the cheapest in the nation at $740 per year in Utah. On top of that, homes with price drops reached 38.4%, indicating that while SLC may be a competitive market, there are still deals to be found for investors. Plus, rent prices are on the rise, with 2-bedroom units increasing nearly 8% over the last year.

Salt Lake City by the numbers

  • Average annual homeowners insurance cost: $740
  • Percent of homes with price drops: 38.4%
  • Year-over-year price increase for 2-bedroom unit: 7.9%

#2: Cincinnati, Ohio

The rental market is booming in Cincinnati, with 2-bedroom units jumping nearly 15% — one of the fastest rates in the U.S. Price drops in the real estate market are also dropping, with nearly 36% of homes selling under their list price. Finally, homeowners insurance is reasonable in Ohio, costing less than $1,000 per year on average.

Cincinnati by the numbers

  • Average annual homeowners insurance cost: $979
  • Percent of homes with price drops: 35.8%
  • Year-over-year price increase for 2-bedroom unit: 14.6%

#3: San Diego, California

Home insurance costs are low in California, averaging just under $800. Home prices may be higher in San Diego compared to other parts of the country, and the market is more competitive here as well. Only 28% of homes saw a price drop, which is average for the cities we analyzed. However, potential investors could offset those costs with rising rental prices in the city, which are up over 13% in the last year.

San Diego by the numbers

  • Average annual homeowners insurance cost: $791
  • Percent of homes with price drops: 28.3%
  • Year-over-year price increase for 2-bedroom unit: 13.4%

#4: Cleveland, Ohio (tied)

Cleveland ties in fourth place as another hot market for real estate investors. Ohio's low home insurance prices keep costs low. On top of that, rental prices have increased at a steady pace of 6.8% over the last year. Data on price drops is unavailable, so it's smart to look at some data on sold homes to gauge more of the market.

Cleveland by the numbers

  • Average annual homeowners insurance cost: $979
  • Percent of homes with price drops: Not available
  • Year-over-year price increase for 2-bedroom unit: 6.8%

#4: Seattle, Washington (tied)

Tied for fourth is Seattle, which partially stands out for having low homeowners insurance in the state of Washington. Pricing in the real estate market is also investor-friendly, with more than 30% of homes experiencing price drops. And with rental prices increasing more than 6% each year, investors can count on rising income alongside the property value growth.

Seattle by the numbers

  • Average annual homeowners insurance cost: $878
  • Percent of homes with price drops: 31.7%
  • Year-over-year price increase for 2-bedroom unit: 6.2%

#6: Portland, Oregon

We're staying in the Pacific Northwest with Portland, Oregon in our 6th place slot. Oregon property owners pay just over $875 per year on insurance. And there may be a greater selection of properties to choose from: over 43% of homes were subject to price cuts, giving investors the potential to find a bargain. Rental prices aren't rising as aggressively as other areas on our list, so those savings at the time of purchase could be beneficial.

Portland by the numbers

  • Average annual homeowners insurance cost: $876
  • Percent of homes with price drops: 43.4%
  • Year-over-year price increase for 2-bedroom unit: 2.8%

#7: Philadelphia, Pennsylvania (tied)

Philadelphia is another real estate market for investors to consider. In Pennsylvania, homeowners insurance averages just over $1,000 per year. Within Philly, you'll find over 33% of homes with a price drop, giving you the chance to snag a property without bidding with other buyers. Rental price increases are also healthy at 6.4% per year.

Philadelphia by the numbers

  • Average annual homeowners insurance cost: $1,004
  • Percent of homes with price drops: 33.5%
  • Year-over-year price increase for 2-bedroom unit: 6.4%

#7: Minneapolis, Minnesota (tied)

Minneapolis ties with Philadelphia, providing a competitive Midwest option for buying rental properties. Price drops are average compared to other cities we analyzed, coming in at 31.1%. The annual cost of homeowners insurance is also middle of the road in Minnesota. But Minneapolis stands out with the second fastest rental rate increases. Over the last year, prices for a 2-bedroom rental surpassed 17%.

Minneapolis by the numbers

  • Average annual homeowners insurance cost: $1,411
  • Percent of homes with price drops: 31.1%
  • Year-over-year price increase for 2-bedroom unit: 17.6%

#9: Buffalo, New York

Upstate New York is another investor-friendly area, particularly in the city of Buffalo. New York state enjoys a low insurance cost of just $980 per year. And Buffalo rentals saw a 12.3% jump in prices over the last year. The secret may be out among investors, since homes with price drops were below average at 28.5%

Buffalo by the numbers

  • Average annual homeowners insurance cost: $980
  • Percent of homes with price drops: 28.5%
  • Year-over-year price increase for 2-bedroom unit: 12.3%

#10: Boston, Massachusetts

Our final spot for owning an investment property is Boston. Insurance costs are low in Massachusetts, averaging just over $900 per year. Rental price increases are also in the top five nationwide, clocking in at 14.5% year-over year. You may have to take more time with your purchase, however, since the number of homes with price drops is just 22.5%

Boston by the numbers

  • Average annual homeowners insurance cost: $916
  • Percent of homes with price drops: 22.5%
  • Year-over-year price increase for 2-bedroom unit: 14.5%

Methodology

The Zebra pulled three data points to analyze the top 50 MSAs (by population) in the U.S. related to purchasing and owning investment properties.

  • Average annual homeowners insurance cost by state
  • Percent of homes with price drops 
  • Year-over-year price increase for 2-bedroom unit

MSA data was used where applicable, and we sometimes substituted city or state data as necessary.

Resources

  1. Realtor Magazine

  2. Redfin price drop map

  3. Zumper rental report

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