Investing in the Best Cities to Invest in Real Estate 2023 can be quite an overwhelming task.Real estate investors consider a lot and invest quite much of their time assessing any given opportunity. But what if you could show the investors which real estate markets will give the highest returns? This will surely save time and effort.

This guide is therefore intended to do exactly that.

In this article, we shall examine the best cities in which to invest your money in real estate in 2023.

First, let us take a closer look at some of the metrics and data that are used to grade each real estate market.

How Real Estate Investors Identify the Best Cities to Invest in Real Estate 2023

Wherever you might be living, or even if you are an international investor, core principles of investment in real estate remain the same. The main goal is to make sure that you find a rental property offering the best possible return on investment, commonly known as ROI.

How can you maximize returns with investments in real estate? Consider the following three critical factors:

• High Demand for Rentals
• Good Rental Income
• Low Rate of Defaulting by Tenants

These factors are crucial in making a profitable investment. However, there are other factors of the housing market that play an equally important role in real estate profit-making investments.

Other Factors of Consideration
These include:

Population Growth
Job Growth
Median Home Prices
Although population and job growth are not directly part of the housing market, they have strong effects on the market. The more people, the more jobs, this translates to high potential for real estate investment.

With that in mind, let’s dive into our picks for the best cities to invest in real estate in 2023.

Best Cities to Invest in Real Estate 2023

Note: The cities below will be in no particular order. Always remember to do your due diligence and research any potential real estate market before making a decision on investment.

Nashville, TN-Nashville Real Estate Market

First on our list of the best cities to invest in real estate in 2023 is Nashville, Tennessee. While the housing market has experienced a little slowing down as of late, this is, of course, relative. Even with a reduction in growth, Nashville still sees more housing demand than available inventory.

The factors that establish Nashville as one of the best real estate markets are the activity of the property market, the consistency in home value growth, and a very strong local economy. As the capital of Tennessee and the most populous city within the state, Nashville has experienced much growth in population and jobs in past years. Median household income rose 6.6%, therefore increasing possible cash flow from rental properties.

If that’s not all, analysts forecast a 19% rise in housing prices over the next year, which gives real estate investors an excellent return prospectus.

Tampa, FL, Tampa Real Estate Market

The next on this list is Tampa, Florida. While the average price of buying a house is just $323,040, the average rent in Tampa costs $1,970 and sits just a little above the nation’s average. What makes Tampa special, though, is its phenomenal growth.

Over the past year, single-family home prices in Tampa have increased 27.7%, while population growth is consistently at 1.4%. In addition, rental rates are up 39% over the nation’s averages. With these huge jumps, Tampa is ranked very high in real estate investment.

Austin, TX, Austin Real Estate Market which is one of the Best Cities to Invest in Real Estate 2023

Other good alternatives include Austin, Texas. Over the past decade, Austin’s housing prices have nearly doubled. Austin also saw the biggest population gain percentage-wise of any major U.S. city.

Austin has quickly become a destination for many tech companies looking to move away from Silicon Valley. Given that its housing is relatively more affordable, its median rent lower compared to other alternatives, it appeals to this town from all walks of life. But with unemployment standing at just 4.2%, well below the national average, Austin boasts one of the best economies in the country. With the convergence of low inventory, high rental demand, and a rise in home prices, Austin’s real estate market has been nothing short of a boom town. Equally essential, it is home to major corporations such as Apple, Samsung, and Tesla-all of which have large offices in town and provide additional fuel for the local market.

Charlotte, NC – An Up-and-Coming Real Estate Investment Hub

Among the best cities to invest in real estate this 2023 is Charlotte, North Carolina. Within the last year alone, driven by key growth factors, property values have increased by an additional 16.4% in the Charlotte real estate market.

The major driving points for this are the booming population and very strong job market of Charlotte. Moreover, the city is supported by 25 colleges and universities, so the supply of young and energetic workforces is there. This is a pretty fast-expanding city; it still is somewhat reasonably affordable, with a median home price of about $329,961 and an average rent of $1,693, which is well below the national average. These reasons make Charlotte one of the best cities in which to invest in real estate in 2023.

Birmingham, AL – Affordable Market w/ Strong Appreciation

Birmingham, Alabama is one of the best cities to invest in real estate in 2023. That is a fact considering it has retained very impressive property appreciation amongst the unpredictable national housing market. Real estate in Birmingham is outpacing property values in many other U.S. cities.

Another attractive feature of Birmingham involves real estate affordability. The average value of a home is around $216,000 with an average rent of $1,312. In addition, Birmingham has gone through some revitalization with the town being a central point for a number of industries: publishing, medical research, banking, and technology. This rejuvenation makes it one of the best places for investors to attract solid returns in view of growth scenes.

Raleigh, NC – High Rental Demand and Job Opportunities

Raleigh, North Carolina, rounds out the list of top cities in which to invest in real estate in 2023. Part of the Research Triangle, along with Raleigh, Durham, and Chapel Hill, it offers many technology jobs along with a large student population.

About 43% of Raleigh residents rent rather than own, about 10% above the national average, which helps keep demand for rentals high. Raleigh has a very low unemployment rate, while the average annual income is higher than the average in the country, which makes it really attractive for a real estate investor. All factors combine-rental demand, strong job market, and income growth-to make Raleigh one of 2023’s best cities in which to invest in real estate.

Las Vegas, NV – Highly Competitive Market with High Appreciation Rates

One of the very best cities in which one could invest in real estate in 2023 is Las Vegas, Nevada. Despite having a rather moderate median home price at about $346,295, this city has still managed to generate an extraordinary 75% home value appreciation over the past five years. This growth is promoted by out-of-state cash buyers and investors who have managed to drive the demand for housing upward and make the market highly competitive.

The rental market in Las Vegas is thriving as well. With relatively low vacancy rates and a high rent-to-income ratio, prospects for rental investments continue to look very good. Second, the number of firms in Las Vegas has grown and is still on the increase, boosting the local economy and, as would be expected, the demand for housing. Due to increasing competition in the housing market driving many prospective buyers into renting, rental demand has been steadily on the rise and finds Las Vegas very attractive for real estate investors in 2023.

Dallas, TX – A Booming Market with Strong Growth Potential

Dallas is quickly becoming one of the top cities to invest in real estate for 2023 because of an affordable housing market, growing population, and good job generation. Available housing stock and high rental rates are blended elements that make Dallas accessible to investors looking for investment opportunities either for rentals or long-term appreciation.

People love Dallas for many reasons, one major being the rapid job growth it’s experiencing in particular with technology. Job market growth combined with a rapidly growing population makes Dallas a good candidate for real estate investment. At the end of 2023, the average home price in Dallas is $338,000, while the median rent is $1,696. This number goes down even more if you seek even more affordable options at the edges of the Dallas metro area.

Also, the arrival of many technology companies in Dallas from California’s Silicon Valley due to greater affordability and cheaper real estate, too, has boosted the economic outlook for the city. With an extremely high median household income and an extremely affordable housing market, Dallas is one of the top cities in which to invest in real estate.

Phoenix, AZ – High Home Value Appreciation and Affordability

Phoenix, Arizona, remains one of the best cities to invest in real estate in 2023. It is characterized by a very high home value appreciation percentage with low home prices. Growth has been nothing short of staggering for several years, including an 81% increase in home prices; huge returns await real estate investors.

The fifth-most-populous city in the United States, Phoenix has an economy that is ranked among the fast-growing ones within the country. Probably the greatest in Phoenix’s affordability has been one reason its real estate market has been able to stay afloat, with the median home price coming in at just $269,175. That said, thanks to that fact, Phoenix is an excellent market for both homebuyers and rental investors alike-especially as the local workforce continues to grow and its more affordable cost of living attracts new residents. With its stable economy and an increasing home market at rapid appreciation rates, Phoenix presents a great opportunity for real estate investors in 2023.

Columbus, OH – Up-and-Coming Market with Low Entry Costs

The other strongest contenders among the best cities in which to invest in real estate in 2023 include Columbus, Ohio. With its low cost of living, very diverse population, and an economic growth rate that is considerably fast-growing, Columbus has grown increasingly attractive for both young families and real estate investors alike.

One major appeal of Columbus real estate is with regard to affordability. The median price, being quite a bit lower than most other cities, allows it to be easier for investors to break into. Additionally, Columbus has seen home values steadily increase by 8.4% in the last year alone. This appeals to investors who tend to see Columbus in a good light, with regard to a positive rent-to-income ratio, in wanting a mix of affordability and growth.

The population in Columbus has been increasing over the years, thus tightening up and further strengthening demand. Therefore, as this market continues to expand, investors should expect appreciation in home prices and rental demand, ensuring positive returns from real estate investment in the future.

Orlando, FL – Strong Rental Market with Fast-Growing Population

At least, that’s the case for Orlando, Florida, with Walt Disney World and Universal Studios, too, but its explosive growth in population-the place-among this year’s best cities to invest in real estate. The greater Orlando area is estimated to be gaining 1,000 new residents every week, and new residents are pouring into the rental market in droves.

Orlando’s rental market, in particular, is very strong, with roughly 55% of its new residents renting their homes instead of buying. This presents a huge opportunity for rental investors. Home prices have also been growing intensely, with an 18.7% year-over-year growth; another 15.8% growth is forecasted for 2024. These acts of luck and fact, in addition to Orlando’s growth in terms of population and economy, have added to the #2 position the city holds in Forbes’ ranking of Fastest Growing Cities in America. As has been seen, investors who wish to participate in Orlando’s fast-growing market may very well expect an excellent outlook in 2023.

Denver, CO: Hot Rental Market and High Appreciation in Real Estate

Another great city to invest in real estate in 2023 is Denver, Colorado. Denver has grown by leaps and bounds due to rapid population growth, increasing rents, and real estate appreciation. As a result, Denver is an excellent town for rental property investors. A total of 51% of homes in Denver are occupied by tenants, and thus, the largest portion of its housing market is dominated by rentals.

Over the past couple of years, Denver’s rental market has kept improving, supported by an extremely strong economy with an unemployment rate of 3%, well below the national average. Its job market keeps growing in size-a factor partly brought about by increased tourism, which attracts millions of visitors throughout the year. This has turned short-term rentals, such as vacation rentals, into particularly lucrative investments within Denver.

Further, Denver ranks in the top 10% in the nation for appreciation in real estate. This consistent appreciation in home values positions Denver as one of the best cities for real estate in 2023. It was listed as the top place to live in the U.S. in 2016.