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Where are the best places to buy rental property this year?
As a seasoned real estate investor who has been investing in single-family and multi-family real estate for decades in the United States and abroad, this is a question I get asked often. To help you narrow down the best market for your real estate investment goals, RealWealth has rounded up the top choices for 2025 and into 2026.
3 Factors for Analyzing a Real Estate Market
Before researching and analyzing markets, you’ll want to understand your real estate investment goals so you can avoid making impulse decisions. Ask yourself, “What do I want from my investment?” Knowing your goals and the answer to this question is critical to choosing the right path for you.
Before we dive into our best places to buy rental property for 2026, here are some tips for analyzing potential real estate markets.
I’ve found that the best cities to invest in have three factors in common: job growth, population growth, and affordability.
1. Job Growth
Because population growth correlates with the availability of job opportunities, real estate investors should prioritize markets where job opportunities are expanding.
When assessing a location for a strong job market, here are key points to keep in mind:
- Number of jobs. The number of jobs in an area signifies which locations are experiencing growth and which are not.
- Rise in median salary. The median salary is the midpoint of all wages. When it rises, it indicates a growing economy with a demand for skilled workers.
- Job diversity. A strong mix of industries and workforce signals a location is on an upward momentum.
- Commercial buildings. When the economy improves, industries expand, and more commercial buildings and towers are built.
2. Population Growth
Despite what the numbers on your pro forma may say, a rental property only brings in revenue if you can find someone willing to rent it. To determine the best places to buy rental property for 2025, look for areas with high population growth and housing demand.
To analyze a region’s real estate market, look for signs of increasing population, as this often equates to increased demand for housing. Real estate markets with growing populations also tend to have strong economies. When more jobs are available, more people can afford to pay rent.
When demand for houses outpaces supply, home prices rise, and rents increase. When you invest in rental properties in an area with high population growth and housing demand, your investment should pay off over time as rents rise.
3. Affordability
Every housing market has its own pricing and market trends. Different factors come into play when researching where to invest in rental property. Here are three:
- Location. A property’s location, including the city and neighborhood, plays a big role in its current value, appreciation potential, and how long it takes to recoup your initial investment. At RealWealth, we suggest investors avoid high-priced markets like New York City, Los Angeles, or San Francisco and instead focus on markets with growing appreciation and job growth like Baltimore, Maryland, San Antonio, Texas, and Jacksonville, Florida.
- Price-to-rent ratio. Investors use this benchmark number to gauge an area’s potential profitability. To find this number, divide the median home price by the median yearly rent. The calculated number lets you know if renting or owning a property is cheaper. A price-to-rent ratio of 15 or lower favors buying, while 21 and above means it’s cheaper to rent than buy. The higher the price-to-rent ratio, the worse the market is for real estate investing (rentals in particular). It also translates to lower cash flow potential. Conversely, an area with affordable real estate but increasing rents will almost always make for a good investment.
- Fixer-upper. A fixer-upper in a popular or up-and-coming neighborhood can also be a good investment if you have the time, money and experience to make improvements that increase rent and property values.
When you find a market with all three factors – job growth, population growth, and affordability – you’ll likely be able to find good real estate investment opportunities for both cash flow and appreciation.
To help you with your market research, RealWealth has rounded up 25 of the best places to buy rental property for 2026. RealWealth also explain why these markets are strong for investors.
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