Best Places to Invest in Real Estate: Producing the Highest ROI!
The best places to invest in real estate are developing areas. This is because these transitioning neighborhoods have not yet peaked at their full potential for retail value. Therefore, there is more equity and profit to be made when investing in these locations verses a fully saturated market or neighborhood. Depending on which states and cities have the best transitional neighborhoods will impact where to invest in real estate now. Luckily there are key indicators to help understand whether a neighborhood is on the rise and will be a lucrative investment.
The Business Insider’s article, “The 20 Best Cities to own Investment Properties” makes it easy to decide where to invest in real estate in the US. They conducted in-depth research and ranked St. Petersburg and Tampa in the top 3 for best cities to own investment properties in. This is because of their high employment and population growth as well as an increase in home values and rental yield. A great way to know the best states to invest in real estate is by studying the state and local expenditures. For example, if the government is spending a lot of money to improve major highways and roads, the education system, and public transportation, it’s a strong indication the state or city is improving and would be a wise place to invest in.
Another great gauge for finding transitional neighborhoods and the best places to invest in real estate is by studying the proximity of the neighborhood to the city, major roads, and public transportation. Ask yourself the question, “it in a convenient location”? The ripple effect of abutting a highly sought-after neighborhood, which is recognized in Forbes article “Home-Buying Guide: 7 Signs of a Neighborhood on the Rise”, is comparable to being located close to the downtown city-center. For example, in Tampa, take note of how Tampa Heights and Seminole Heights, neighborhoods that boarder the city, and are only a few miles from downtown, are becoming very desirable and a popular spot of where to invest in real estate now.
Tampa Heights and Seminole Heights are prime examples of transitioning neighborhoods. They were once run down, but are now receiving a lot of attention, especially from investors. Plenty of people are flipping houses here and purchasing rental properties. The crime rate has gone down and new storefronts are making their way to the neighborhood. These are great signals to watch for, as well as the number of days of market (DOM). For example, in these neighborhoods the number of DOM is drastically decreasing. Rather than houses sitting on the market for 110 days they are being scooped up in under than 10 days. This is a sign that the neighborhood is HOT!
Another clue for finding possible neighborhoods on the rise and knowing where to invest in real estate in USA is by looking at the newly established Opportunity Zones. The Opportunity Zones were established by the government to encourage growth and as a way to revitalize many distressed communities. There are now thousands of designated zones in each state. One of these zones may be a smart decision when considering “where should I invest in real estate” because along with a possibility for an increase in equity there are also special tax breaks and incentives for people who invest in these zones. For example, there is a temporary tax deferral and a permanent exclusion from taxable income of capital gains. To learn more about these incentives and to find the Opportunity Zones in your community or one you are interested in, click HERE.
Since you now know WHERE to invest in real estate, now read WHY to invest in real estate, click HERE to read “Why Invest in Real Estate? A Strategy to Build Wealth”.