Rental properties give you, the investor, the power to determine your profits. Let’s be clear: Buying a home doesn’t always give you the biggest return on your money.
But there is a way to earn similar, or even greater, investment returns in real estate: owning a rental property. In this case, you’re getting paid to own something, rather than paying to own it. The mortgage is often covered by rental income, and if you play your cards right you’ll profit after covering insurance, taxes, and maintenance costs.
Below are the 5 best places to buy a rental property right now. Based on the median investment home price, we’ve also included the average mortgage payment, assuming a 30-year fixed mortgage with a 20% down payment and a 5% interest rate.
Chicago
Median investment home price: $235,000
Mortgage payment: $1,009
Median rent: $1,798
Annual return after operating costs: 5.2%
Seattle
Median investment home price: $450,000
Mortgage payment: $1,933
Median rent: $2,218
Annual return after operating costs: 3.3%
Detroit
Median investment home price: $167,500
Mortgage payment: $719
Median rent: $1,406
Annual return after operating costs: 5.7%
Phoenix
Median investment home price: $180,000
Mortgage payment: $773
Median rent: $1,264
Annual return after operating costs: 4.7%
Boston
Median investment home price: $333,800
Mortgage payment: $1,434
Median rent: $2,337
Annual return after operating costs: 4.7%
