As we continue to navigate current rates and evolving regulatory challenges in the residential rental property market, investors will look for rental area hotspots with:
- Bustling job markets
- Residential growth
- Housing affordability
- Low unemployment rates
With that in mind, let’s look at the 3 best areas for rental properties in 2024 and the top emerging neighborhoods in each city:
1. Dallas, Texas
A recent PwC report ranked the Dallas-Fort Worth area fifth in homebuilding prospects and third in overall real estate prospects nationwide. These rankings spotlight Dallas’ magnetic appeal for consumers and investors alike.
Dallas’s expanding job market makes it one of the best areas for rental property investment in 2024. Once pegged as an oil town, Dallas has utilized progressive city development to entice and create a diverse economy–with several tech and finance companies moving into the area.
With a healthy supply of available multifamily units and a vacancy rate of 6.1%, Dallas offers a well-balanced supply and demand market. This makes the booming metropolitan one of the most affordable cities to buy rental properties.
Why Invest
- Diverse Economy: According to the Kenan Institute of Private Enterprises, Dallas ranks the fifth fastest-growing economy among major U.S. metropolitans. The city attracts a diversified group of businesses, talent, attractions, and investors to the area.
- Population Growth: Dallas’ residency has grown by more than 100,000 residents over the past decade. This rapid growth within the urban city is likely to continue.
- Growing Appreciation: The Dallas housing market consistently outperforms national averages, with yearly home appreciation rates of 8.91% and rent appreciation rates of over 4%.
Best Rental Neighborhood
- Greenville: Sitting Northeast of Dallas, Greenville gives residents a taste of small-town suburbia with easy access to urban amenities. The town, currently home to 30,000 residents, is within short distance of several large corporations. Recent construction activity makes Greenville an intriguing rental neighborhood beaming with possibility.
Rental Property Numbers
- Median Home Price: $366,326
- Median Rent Price: $1,787
- Rent Appreciation Year-over-Year (YoY): 4.07%
- Job Growth Rate: 3.46%
- Unemployment Rate: 3.3%
2. Jacksonville, Florida
Unbeknownst to many, Jacksonville, Florida is actually the 12th largest city in the United States based on population (1.6 million residents). Over the last decade, the city has added over 100,000 more residents thanks to its surging job market and local attractions like Jacksonville Beach and the Jacksonville Zoo.
However, this city is ranked second on this list of best areas for rental properties, due to its relatively affordable housing market, coupled with its high rental and property appreciation rates.
With the median metropolitan house priced at $290,000, an equity growth of 8.53% and a rent growth of 5.06%, Jacksonville will be one of the best cities to buy rental property in 2024 and beyond.
Why Invest
- Strong Job Market: Jacksonville’s geographic location and modern infrastructure make it a popular hub for logistics businesses, transportation services, entertainment, and other industries. The city continues to steadily add jobs–with a 3.8% YoY increase–while maintaining a low unemployment rate (2.9%).
- Rapid Population Growth: Jacksonville’s metropolitan area has experienced significant population growth over the last few years. With an estimated 1.68 million residents, the city population growth has more than doubled the national average over the last decade.
- Consistent Real Estate Appreciation: Growth in residency and a strong job market have kept housing demands stable. With median rental prices rising by more than 56% over the past decade, rising property values, and positive builder outlooks, the time to invest in Jacksonville rental properties is now.
Best Rental Neighborhood
- Downtown Jacksonville: With the St. Johns River, a bustling nightlife, and access to countless recreational amenities, the heart of the thriving metropolitan provides a luxurious, yet affordable, investment opportunity. Additionally, Downtown Jacksonville is home to over 2,000 businesses, including three Fortune 500 companies. This makes it an enticing destination for young professionals and positions it for continued growth.
Rental Property Numbers
- Median Home Price: $351,548
- Median Rent Price: $1,737
- Rent Appreciation YoY: 5.06%
- Job Growth Rate: 3.75%
- Unemployment Rate: 2.9%
3. Indianapolis, Indiana
Although it may not have the recognition of Dallas or the zeal of Jacksonville, Indianapolis offers a robust and virtuous economy with outstanding affordability. The area continues to explode, with popular suburban counties like Hendricks and Boone growing by more than 20% over the past decade.
Despite home prices surging over the past three years, the Indianapolis metropolitan area continues to be relatively affordable, with a median home price just over $265,000–22% lower than the national average. Affordability, along with a growing economy and population, make it one of the best areas for rental property investments.
Why Invest
- The Prices: Affordability is the number one reason to invest in Indianapolis’ real estate market. The significantly lower purchase and rental prices make the city a popular destination for young families and Gen Z professionals. The low property costs is sure to attract investors looking to optimize their rental property net operating income (NOI).
- Appreciating Rent: The city’s median home prices make its 4% YoY rent appreciation a much stronger number than cities with similar annual rates.
- Steady Population Growth: With amazing prices and a robust economy, Indianapolis’ population of 2.1 million is likely to continue growing. Most notably, a steady influx of young families is expected to permeate the city’s surrounding suburbs.
Best Rental Neighborhood
- New Castle: Just 20 miles east of downtown Indianapolis, New Castle is home to notable employers, like Duke Energy and American Keeper Corporation. With some properties still being listed for less than $100,000, this suburban sanctuary is primed to explode in 2024 and beyond.
Rental Property Numbers
- Median Home Price: $265,327
- Median Rent Price: $1,454
- Rent Appreciation YoY: 4.00%
- Job Growth Rate: 2.4%
- Unemployment Rate: 2.5%
