A Taste Of 2020’s Best Rental Markets

Key Takeaways

  • Top factors affecting rental properties

  • Best rental markets in 2020

  • Best rental markets in 2019

  • Best rental markets in 2018

If you’re considering buying a rental property, familiarizing yourself with the best rental markets in the country could go a long way in preparing you to invest in your first buy-and-hold asset. Aside from being great places to invest themselves, today’s best rental markets can teach us a lot about how to invest in subsequent locations.

The location in which you choose to invest will ultimately determine the viability and success of any assets you acquire. After all, those who know how to read and intemperate market indicators will know where the best rental markets reside. Keep reading to learn why people are so excited about 2019’s best rental markets.

Top Factors That Affect A Rental Property Investment

There are countless factors that play into a location’s rental viability. The sheer number of variables that have even the slightest impact on an area’s rental property performance is staggering. That said, not all indicators are created equal; there are some factors that affect a rental property investment inherently more than others, not the least of which include:

  • Location

  • Economy

  • Vacancies & Listings

  • Future Development

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rental markets


First and foremost, the golden rule of real estate investing is still alive and well: location, location, location. Investing in a rental property with at least some degree of success is always contingent on the area in which it is located. It is the location of the respective property that’ll determine everything else I’ll discuss henceforth.

Before you even consider looking at a subject property, you need to pick a location that facilitates a healthy rental market. Specifically, pay special considerations to the health of the economy, demand, job opportunities, new home construction, unemployment rates, household income, affordability and anything else that could potentially influence a renter’s decision to live in the area. When all is said and done, even the best rental property in a poor location doesn’t stand a chance. You need to invest in an area that people want to call home and where demand will persist for the foreseeable future.


The local economy will play an integral role in determining the viability of a respective rental property. Here’s a list of some of the most important economic factors you’ll need to consider when looking at the location in which a rental property is situated:

  • The number of sales of existing homes

  • The prices of existing homes

  • The volume of new construction

  • The local economy

  • Population trends

  • Unemployment rates

  • Job growth

  • Median household incomes

  • Affordability

While not the only factors you’ll need to consider in a local economy, each of these indicators will play a part in determining whether or not an area is worth investing in. Positive trends in each would likely suggest the location is ready to be invested in, but economic indicators are not mutually exclusive. While it’s better to have everything working in an area’s favor, it’s entirely possible for a rental market to thrive with just a few of these factors on its side.

Vacancies & Listings

Mind due diligence and pay close attention to the ratio of vacancies relative to the number of listings in a particular area. An unusually high number of listings, for example, could represent one of two scenarios: either the neighborhood is currently in the middle of a seasonal cycle or it is trending downwards. It is in your best interest to discern what the listing ratio in a particular area means for an impending investment.

Take note of the area’s vacancy rate, too. At the very least, vacancy rates will give you an idea of what sort of demand to expect. Low vacancy rates could be a good sign, as demand appears intact and active. High vacancy rates, however, could suggest poor conditions. Additionally, lower demand could force landlords, not unlike yourself, to lower rates in order to attract tenants.

Future Development

Areas with future development projects in the pipeline are typically representative of a healthy market. Most likely, projects have broken ground because the area has shown promise, which bodes well for rental property investors. Conversely, a distinct lack of development suggests there is reason to avoid the area. Therefore, you’ll want to contact the local municipal planning department to gather information on all the new projects that are either currently underway, or will be sometime in the near future.

Best Rental Markets 2019

There are a number of real estate markets that currently have everything investors should look for in a promising rental market: strong economies, an influx of new residents, affordability, new home construction, solid unemployment rates, relatively high household incomes and other factors. However, there are two—in particular—that have already started to demonstrate an increased propensity towards a very promising 2019:

  • Lakeland, FL

  • Grand Rapids, MI

Let’s take a look at why these two cities are poised to be amongst the best markets for rental property investors.

Lakeland, Fl

Lakeland, Florida appears ready to become the primary beneficiary of a perfect storm in 2019, which looks more and more likely to benefit well-positioned rental property investors in the coming year. Due primarily to a unique combination of affordability and a centralized location, savvy buy-and-hold investors may cater to an exponentially increasing pool of cost-conscious commuters who can’t afford to live in some of Florida’s most desirable locations. Located directly between three of Florida’s most popular destinations (Tampa, Orlando and the famed Walt Disney World Resort), Lakeland has become the perfect transplant city where residents can retain a lower cost of living without giving up access to amenities in their larger, more established neighbors.

Meanwhile, renters tired of the exorbitant prices associated with Tampa and Orlando are finding refuge in Lakeland, driving up demand at an incredible rate. It is worth noting, however, that even while demand is increasing, affordability remains intact—at least for now. As Realtor.com is quick to point out, prices are expected to grow 7.4 percent, which means rental property investors that get in now could benefit from appreciation and high levels of demand—that’s coming off a year in which median home values already increased 9.4 percent

  • Median Home Price Forecast: $161,757

  • Sales Growth Forecast: 5%

  • Price Growth Forecast: 7.4%

Grand Rapids, MI

Not to be outdone, the Grand Rapids real estate market is doing everything it can to attract more renters. In addition to remaining relatively affordable (the median home value is $157,900, according to Zillow), there appears to be plenty of room for appreciation. What’s more, the number of higher-end job opportunities continues to increase. Once an old factory town dedicated almost entirely to the furniture manufacturing industry, Grand Rapids is quickly becoming a hotbed for world-class research and educational facilities. Not only that, but Amazon recently announced it would be opening an 850,000-square-foot fulfillment center in Gaines Towns, which will surely attract more renters. Consequently, Grand Rapids has already started to attract an influx of new homebuyers and renters, but the area’s bustling economy appears ready to support growth for years to come. Not unlike Lakeland, rental property owners that get in on the ground floor may be able to benefit from both appreciation and increased levels of demand.

  • Median Home Price Forecast: $187,319

  • Sales Growth Forecast: 4%

  • Price Growth Forecast: 8.2%

Best Real Estate Markets 2018

The best rental markets of 2019 are indicative of trends that are carrying over from the previous year—namely affordability. If for nothing else, both buyers and renters are tired of the latest bout of appreciation rates, and are more willing to forego the high cost of living in primary cities in exchange for the lower prices associated with secondary markets. Let’s take a look at some of the best real estate markets of 2018 in order to better understand where things are headed:

  • Orlando, FL

  • St. Petersburg, FL

  • Tampa, FL

  • Cleveland, OH

  • Jacksonville, FL

  • Seattle, WA

  • Boise, ID

  • Atlanta, GA

  • Nashville, TN

  • Las Vegas, NV

For a more in-depth look at some of the best real estate markets of 2018, please feel free to reference the following infographic:

Best rental property markets


Are there any rental markets you have had your eyes on? Let us know where you hope to invest in the near future (and why) in the comments below:

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