If you’re a real estate investor, selecting the right place to invest your capital is no small task. The market is constantly evolving, and what was a rock-solid location just last year might not hold the same potential today. So, TurboTenant put together this list of the best places to buy rental property in 2025. After all, hastily dumping money into the wrong real estate market can stop rental revenue dead in its tracks.
To create the list, we analyzed countless U.S. cities using key metrics such as gross rental yield, vacancy rate, and the housing price growth index to formulate our 11 best locations for investors to consider when making their next big move.
From a hip tech hub in the Sun Belt to a surging market in the Southeast and over to an underrated Midwest metropolis, the following 11 cities should light up your radar.
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Real estate investors should scrutinize several essential metrics that provide market insight to identify the best cities for rental property investment. These are a few of the most significant factors to consider. Plus, we included a breakdown of the U.S. average to provide context:
Gross rental yield: Annual rental income as a percentage of a property’s purchase price before expenses. U.S. average: 6.1%.
Rental vacancy rate: Percentage of available rental properties unoccupied, reflecting housing demand and market conditions. U.S. average: 6.9%.
Housing price index growth: The rate at which residential property prices change over time, indicating market trends. U.S. average: 4.6%.
Job growth: The increase in regional employment opportunities, influencing housing demand and economic health. U.S. average: 2.9%.
Unemployment rate: A low unemployment rate signals strong job growth, increasing housing demand and rental stability. U.S. average: 4.1%.
State income tax: Lower state income tax rates attract more residents while allowing real estate investors to pocket more rental income. U.S. range: 0% to 13.3%.
Cities within a few distinct U.S. regions — the Sun Belt, Southeast, and the Midwest — dominate our rankings for best places to invest. Coincidence? Definitely not. Let us explain:
Cities in the Sun Belt — Austin, Phoenix, and Tampa — often benefit from reasonable housing prices, desirable climates, and low (to zero) state income taxes. As a result, they made the list.
Southeast markets — particularly Atlanta, Charlotte, and Nashville — typically present solid investment opportunities due to their booming economies, landlord-friendly laws, and low cost of living.
Midwestern cities — Indianapolis and Columbus are among our top choices — because they often offer lower-than-U.S.-average home prices, impressive rental yields, and less competition among landlords than other more well-known markets.
Population: 974,447
Gross rental yield: 12.2%
Rental vacancy rate: 4.5%
Housing price index growth: 6.6%
Job growth: 2.9%
Unemployment rate: 3.1%
State income tax: 0%
Austin, also known as Silicon Hills, shows no signs of slowing down. This forward-thinking Texas city embodies a real estate investor’s dream market. Austin has around 300 days of sunshine a year, zero state income tax, a thriving job market, and a healthy tourism industry.
Currently ranking #2 in the U.S. for quality of life, it’s no wonder that Realtor.com expects Austin home values to take a 14.5% leap in 2025. And, though recent construction has led to a spike in the rental vacancy rate, Austin’s thriving job market should eventually bring those numbers back down to earth.
Over the last decade, Austin’s real estate market has seen an appreciation of approximately 196%, and the arrow keeps pointing up. Not to mention, the gross rental yield in Austin sits around 12%, significantly higher than the 6-8% national average.
Population: 1,608,139
Gross rental yield: 9%
Rental vacancy rate: 4.1%
Housing price index growth: +2.7%
Job growth: 1.7%
Unemployment rate: 3.1%
State income tax: Flat 2.5%
Phoenix, known for its plentiful sunshine and low state income tax, is a red-hot market (pun intended) for new residents and investors alike. With a steadily growing economy and an impressive gross rental yield, the Valley of the Sun offers real estate investors strong long-term potential.
For example, home values in Arizona have more than doubled in the past decade, while vacancy rates remain well below the national average. The average home price in Phoenix is around $450,000, making it more affordable than nearby West Coast markets like Los Angeles and San Diego. Job growth is also chugging along, especially in the tech and manufacturing industries.
Regarding tourism, Phoenix is solid — think year-round golf, outdoor desert adventures, five pro sports teams, wellness retreats, etc. — with November through April presenting the best chance to market rentals for short-term rental success.
Population: 467,665
Gross rental yield: 6.4%
Rental vacancy rate: 8.6%
Housing price index growth: 8.4%
Job growth: 3.8%
Unemployment rate: 2.9%
State income tax: 4.25%
Raleigh consistently ranks among the cities with the highest quality of life in the U.S., making it a strong draw for renters, homebuyers, and investors. When combined with a strong job market, relatively low cost of living, and steady student housing demand, Raleigh offers quite the stew.
Think about this: Home values in Raleigh hover around $430,000, a bargain compared to other East Coast markets like Charleston and Washington, D.C. Not to mention, North Carolina’s landlord-friendly laws and Raleigh’s rapid house price index growth make owning and managing rental property here an enticing endeavor.
With reasonable prices, rapid job growth, and strong appreciation potential, Raleigh presents an excellent opportunity for landlords looking to slide into a prime East Coast market.
Population: 874,579
Gross rental yield: 10.6%
Rental vacancy rate: 4.2%
Housing price index growth: 3.8%
Job growth: 3%
Unemployment rate: 3.3%
State income tax: 4.25%
A few hours west of Raleigh, Charlotte, a booming real estate market with similarly alluring benefits awaits. Its rock-solid economy, temperate climate, and growing tourism industry make Charlotte an easy sell for investors and residents alike.
Home values in Charlotte have surged an impressive 120% since 2014. Vacancy rates remain well below the national average, and job growth continues to climb, partly thanks to the city’s expansion as the second-largest banking hub in the U.S. Furthermore, a favorable price-to-rent ratio makes becoming a landlord in the Queen City a savvy long-term play.
To put a bow on it, Charlotte’s uninterrupted growth, thriving job market, and rock-solid rental statistics make it an ideal city for real estate investors.
Population: 235,684
Gross rental yield: 9.3%
Rental vacancy rate: 2.8%
Housing price index growth: 9.7%
Job growth: 3.9%
Unemployment rate: 3.4%
State income tax: 5.7%
A thriving job market, low crime rates, and some of the country’s highest quality of life rankings make Boise one of our best cities to invest in real estate. Thanks to a low 3.4% unemployment rate and a steady influx of workers relocating into town, collecting rent shouldn’t be much of a problem for landlords like you.
To keep the rent coming in month after month, rental vacancy rates in Boise are just 2.8% — far below the national average of 6.9%. Also, home values continue to appreciate, and well-above-average job growth keeps demand for housing high.
If you’re looking for steady cash flow, healthy housing appreciation, low crime rates, a strong economy, or all of the above, Boise deserves your attention.
Population: 715,884
Gross rental yield: 12.3%
Rental vacancy rate: 7.5%
Housing price index growth: 8%
Job growth: 2%
Unemployment rate: 2.9%
State income tax: 0%
While tourism in the Music City is a main draw that real estate investors rely on, Nashville isn’t just honky-tonks and hot chicken. Thanks to its buzzing economy, impressive gross rental yield, and lack of a state income tax, Nashville should be a serious contender for real estate investors.
With a low 3% unemployment rate and major companies like Amazon and Oracle setting up shop in the near future, Nashville’s housing demand appears on the up and up. Further, home values have increased 8% year over year, and rental prices are 7% above the national average — both promising statistics for landlords.
Though the average home price in Nashville costs around $420,000, recent trends suggest that number could climb to $500,000 within the next few years.
Population: 200,133
Gross rental yield: 9.9%
Rental vacancy rate: 6.2%
Housing price index growth: 3.8%
Job growth: 2.3%
Unemployment rate: 3%
State income tax: 4.55%
Largely thanks to world-class skiing, incredible hiking, breathtaking national parks, and other world-class outdoor recreation, Salt Lake City has a robust tourism industry and a high quality of life for its residents—both great signs for real estate investors.
Numbers-wise, Salt Lake City is in a great spot. Gross rental yields sit at a lofty 9.9%, indicating steady rental returns on the horizon. The city’s favorable price-to-rent ratio of 25.6 implies that renting is generally more cost-effective than purchasing a home. Additionally, average home prices in SLC hover around $550,000, on par with its desirable neighbor 400 miles to the east.
With a steady economy, ever-present outdoor appeal, and high potential returns, Salt Lake City is an intriguing option for real estate investors. So, whether you’re interested in short-term vacation rentals or securing long-term tenants, look no further than The Crossroads of the West.
Population: 384,959
Gross rental yield: 11%
Rental vacancy rate: 10%
Housing price index growth: 2.2%
Job growth: 2%
Unemployment rate: 3.2%
State income tax: 0%
As with a few other destinations on this list (Austin, Phoenix, and Nashville), Tampa’s desirable climate and lack of a state income tax continue to lure in new residents. Supported by a booming economy led by healthcare, finance, and tourism, not to mention a top-five quality-of-life ranking, the demand for housing here is hard to beat.
While home prices have only risen 2.2% year-over-year, Tampa’s gross rental yield of 11% suggests that real estate investors can expect returns nearly double the national average. And, with average home prices around $370,000, buyers can get started much cheaper than they would in Florida’s more saturated markets like Sarasota, Miami, and Fort Lauderdale.
Job growth in Tampa remains steady at 2%, and although vacancy rates are slightly above the national average at 9%, supply is poised to dip back down. Ultimately, Tampa presents promising statistics across the board, and sunny beaches only add to its allure. What more could you ask for?
Population: 887,642
Gross rental yield: 16.5%
Rental vacancy rate: 5.3%
Housing price index growth: 4.6%
Job growth: 2.4%
Unemployment rate: 3.6%
State income tax: 3%
Investors with tighter budgets should take a long look at Indianapolis. Though it isn’t maybe the most exciting option on this list, Indy’s average home price of $220,000 offers the lowest-cost entry point of the bunch. The job market here is expanding 43% faster than the national average, and you can’t ignore the city’s low 3.6% unemployment rate.
While Indianapolis’ weather and outdoor attractions aren’t major draws, the city still benefits from a solid tourism industry that attracts short-term renters. For example, Indy is home to the world’s largest children’s museum, the well-known Mass Ave Arts District, and the Indianapolis Motor Speedway, which attracts millions of visitors year after year.
One final number that jumps out to us is Indianapolis’ astronomic gross rental yield of 16.5%, representing the highest on this list. Rental returns this big aren’t easy to find in the U.S. housing market, so crunch the numbers yourself to see how much you could earn in Indy.
Population: 905,748
Gross rental yield: 10.8%
Rental vacancy rate: 4.1%
Housing price index growth: 5.6%
Job growth: .9%
Unemployment rate: 3.9%
State income tax: 2.75% to 3.5%
Like Indianapolis, Columbus boasts double-digit gross rental yields, low vacancy rates, and stable year-over-year housing price growth. With a median home price of around $240,000, Columbus offers investors a lower-than-U.S.-average entry point into the real estate market. These numbers are all good news for investors.
Columbus is the fastest-growing city in Ohio and impressively ranks near the top ten for quality of life in the U.S., just ahead of Sunny San Diego. Ohio State University, home to over 61,000 students, creates an abundance of opportunities for student housing investors, though the city also draws young professionals and families.
Columbus may not feel like the most enticing option on this list, but real estate investing is about the numbers. Leave feelings out of it. Take one close look at the stats, and you’ll soon see why Columbus made our short list of the best American cities for real estate investment.
Population: 498,715
Gross rental yield: 14.2%
Rental vacancy rate: 8.3%
Housing price index growth: 6.6%
Job growth: 2.5%
Unemployment rate: 2.8%
State income tax: 5.39%
Thanks to strong year-over-year housing price growth, booming rental returns, and the lowest unemployment rate on this list, Atlanta stakes its claim as one of the best places to invest in real estate. And, while new development has led to a temporary increase in rental vacancies, the city’s growing population should bring the numbers back down sooner rather than later.
Atlanta is home to multiple Fortune 500 companies — Coca-Cola, Delta Airlines, UPS, Home Depot, and Chick-fil-A — and the world’s busiest airport. As such, it’s widely regarded as one of the Southeast’s most substantial economic hubs.
Atlanta also ranks among the best U.S. cities for quality of life, a testament to its desirability for both short- and long-term renters. A favorable climate and strong tourism industry also add to its appeal and will keep rental demand on its current upward trajectory.
Thanks for reading TurboTenant’s list of best places to invest in real estate in 2025. Whether you’ve got your eye on Austin, Indianapolis, Atlanta, or elsewhere, we hope to have helped you zero in on a city or two where you can enjoy substantial short- and long-term returns.
While we encourage you to act quickly on any advantageous real estate deal, remember to exercise due diligence and analyze markets for essential metrics such as gross rental yield, vacancy rates, housing price index growth, and more.
In the meantime, try out our award-winning property management software. It can help you market rentals, send and accept applications, screen tenants, create state-specific lease agreements, manage maintenance requests, collect rent, and more.
Sign up for your free TurboTenant account today to make self-managing your properties easy, no matter where you invest.
Our research indicates that the best cities to invest in real estate are:
Austin is a top investor consideration due to its strong population growth, booming job market, and lack of state income tax. The city’s 12.2% gross rental yield outpaces the national average and offers excellent returns.
Meanwhile, housing prices continue to appreciate, with forecasts predicting a 14.5% increase in home values in 2025.
Real estate investors should consider quantifiable metrics like gross rental yield, vacancy rates, housing price index growth, job growth, unemployment rates, and state income tax rates when considering which market to invest in real estate.
When deciding, they should also consider intangibles like tourism, climate, and quality of life.
The answer to this question depends on your financial situation and the markets you’re considering.
Generally, smaller and mid-sized cities offer higher rental yields, lower entry costs, and higher potential for expansion. In contrast, major metro areas typically offer stronger potential for long-term appreciation, more diversified economies, and higher rental demand.
Analyzing an investment property’s potential return on investment depends on several factors. In short, here are a few tips to estimate potential ROI:
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