Best places to buy a rental property in the US

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%