The Best Places To Invest In Real Estate 2022

The age-old adage that real estate is all about location still stands. The better the location, the better your prospects for making serious money. But like any investment, there are many considerations to look into before considering real estate investing. And there are risks to any investment, whether real estate or an income fund. 

2022 is set to be an exciting year, and real estate markets are rebounding and responding to post COVID life. Here are some of the best places to invest in real estate in 2022. 

The Best Cities To Invest In Real Estate In 2022

With the new year just beginning, smart single-family home investors are asking which cities will be best for real estate heading in 2022.

Every year the Urban Land Institute and global consulting and tax firm PwC list the top housing markets for the upcoming year. According to the 113-page report on Emerging Trends in Real Estate 2022 the top 9 markets with the best overall prospects for real estate in 2022 are:

  1. Nashville, Tennessee
  2. Raleigh/Durham, North Carolina
  3. Phoenix, Arizona
  4. Austin, Texas
  5. Tampa/St. Petersburg, Florida
  6. Charlotte, North Carolina
  7. Dallas/Fort Worth, Texas
  8. Atlanta, Georgia
  9. Seattle, Washington

What Makes A Real Estate Market Attractive For Investors?

Three factors contribute to a solid real estate market for investors:

  • Cash flow
  • Appreciation
  • Balance of cash flow + appreciation

Any combination of these three can make markets ideal for investors.Here’s insight on what to look for when searching for the next good real estate market. 

How To Find A Good Market

Here are seven factors that help make a real estate market good for investors:

  1. Job creation that’s above the national average.
  2. Current and expected future population growth is also above the national average.
  3. Building permits pulled, current construction activity, and forecasted growth in real estate development.
  4. Government planning on both the state and local level, and whether or not the municipality you’re considering investing in is pro-growth or is overburdened with red tape and regulations.
  5. Housing affordability by using the price-to-rent ratio to compare median home prices to median rents.
  6. The absorption rate, or the time that it takes for new housing that is brought to the market to be purchased or rented.
  7. The vacancy rate, comparing the average in your target market to the overall average vacancy rate for similar markets.

Finding Good Rental Markets

Whether you are investing for long-term passive income, as a productive retirement strategy, or as a hedge against inflation, finding the highest returns with the least amount of risk is always the ideal scenario for investors. When determining where to buy, investors would typically look for areas with high rental demand, a low tenant default rate (which we can infer from unemployment rates), and the expected rent growth.

Cash Flow Real Estate Markets

Real estate investors looking for homes that provide a return quickly focus on cash flow markets. Cash flow real estate generates a steady and predictable income stream through the holding period of the investment.

How To Find A Cash Flow Property

There are two financial metrics used to identify a property with strong cash flow:

  1. Cash-on-cash Return on a single-family rental house measures the annual before-tax income generated by the property divided by the total cash invested.
  1. Cap Rate compares the NOI (net operating income before mortgage payment) to the price of the house.

The higher the cash return and cap rate, the better the property is for cash flow real estate investors.

Real Estate Markets With Good Appreciation Potential

Real estate investors who are looking for a healthy increase in property values over the long term focus on real estate markets with good appreciation. Population and job growth are two factors that help the market value of single-family homes increase year after year.

Best Of Both Worlds: Cash Flow + Appreciation

Investors in single-family rental property can have the best of both worlds by owning a property with solid cash flow and solid appreciation. This balanced approach focuses on strong long-term appreciation plus steady cash flow income.

Commercial Real Estate Investment

Another option to consider for investment purposes is commercial real estate. With the same type of variety in residential properties, commercial real estate can provide more stability in returns.

Real Estate, Income Vs Growth Funds

Like the combination of cash flow and appreciation real estate property for investments, income and growth funds give the best of both worlds. While they’re used independently of each other to diversify portfolios, income vs growth funds should be taken into consideration for all investment goals as they’re a great option for everyone. 

Ready to look into your investment options? Saint Investment has you covered for all your financial services, including income funds. Our finance specialists are here to help, whether you’re starting your journey, or a seasoned investor, Saint Investment is here to help. 

Share this article
Latest Articles
Commercial Vs Residential Real Estate
Interested in diving into the real estate investment world? It’s not a decision to take lightly, and when deciding between commercial vs. residential real estate, ...
LEARN MORE
How Much Money Is Needed To Invest In Real Estate?
It’s never too early, or too late, to begin investing in real estate, even if you only have a few hundred dollars to start with. ...
LEARN MORE
Is It Good To Invest In Real Estate Now?
Record-low mortgage rates have made real estate more attractive for every generation, but with so many other economic uncertainties, is now the right time to ...
LEARN MORE

Find the right investment plan for you

INVEST NOW
© 2022 Saint Investment. All rights reserved.
* Information in this message, including information regarding targeted returns and investment performance, is provided by the sponsor of the investment opportunity and is subject to change. Forward-looking statements, hypothetical information or calculations, financial estimates and targeted returns are inherently uncertain. Such information should not be used as a primary basis for an investor’s decision to invest. Investment opportunities on the Saint Platform are speculative and involve substantial risk. You should not invest unless you can sustain the risk of loss of capital, including the risk of total loss of capital. Please see additional disclosures here.
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram