10 Best Cities to Invest in Real Estate & Buy Rental Property in 2023

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Buying real estate is a big commitment. You probably don’t want to go all in on a rental property only to discover five years down the line that the city you chose isn’t renter-friendly. Wouldn’t it be great if someone put together a list of the best places to buy rental property to help you decide? It would be. So I did.

In this article, I cover the ten best cities to buy rental property. My analysis uses readily available data about the rental landscape in each city and the intuition I’ve developed over the years from my own real estate investments. Here’s what I’ve come up with.

Regardless of where you are in your real estate investment journey, Stessa has tools that can help.

Need to get a mortgage or refinance? Stessa can help you find quotes directly from lenders on their site.

If you’re already a landlord (or about to become one), Stessa also offers a robust suite of tools for managing your property, ranging from tenant screening tools to rental applications, rent collection, and landlord banking resources.

Check out Stessa for all your property and property management needs.

1. San Antonio, Texas

  • House price index: 5.0%
  • Home appreciation: 1.0%
  • Median property tax: 2.69%
  • Median home cost: $287,598
  • Average monthly rent: $1,815
  • Rental vacancy rate: 8.2%

San Antonio is one of the best places to buy rental property, thanks to its rising population, low vacancy rate, and below-average home cost.

The median home price in San Antonio is just under $300,000, while the rental rate is approaching $2,000, giving properties in the area excellent cash-on-cash return.

San Antonio is a popular place to move, with job growth in popular sectors like healthcare, cybersecurity, and tourism. It’s also a great place for military families and accessibility to nearby Austin and Houston.

2. Indianapolis, Indiana

  • House price index: 4.9%
  • Home appreciation: 2.2%
  • Median property tax: $1,371
  • Median home cost: $230,000
  • Average monthly rent: $1,155
  • Rental vacancy rate: 10.9%

Indianapolis’ numbers might not be as appealing as San Antonio’s, but that doesn’t mean that it’s not one of the best cities for rental properties in its own right. The median home price is a very reasonable $230,000, and the average monthly rent is just under $1,200.

One of my favorite things about Indianapolis — and one of the reasons I view it as one of the best cities to invest in real estate — is that the population skews young, with nearly 40% of residents under the age of 25. It’s also becoming a center for tech startups, which gives it solid growth potential in the future.

3. Cleveland, Ohio

  • House price index: 4.9%
  • Home appreciation: 13.53%
  • Median property tax: $1,485
  • Median home cost: $102,763
  • Average monthly rent: $1,301
  • Rental vacancy rate: 2.5%

Another one of the best places to buy rental property is just next door to Indianapolis in the neighboring state of Ohio. Cleveland is one of the most affordable metropolitan areas in the country, which means it’s much easier for investors to get in the game than it is in a more expensive city.

Cleveland has a lot going for it when it comes to investment properties, but its low rental vacancy rate and high home appreciation rate really set it apart from similar cities and make it one of the best places to buy investment property.

Buying and renting property is hard work. Stessa’s tools make it easier.

Stessa offers mortgaging and refinancing services — but so much more.

It also provides services for landlords — including a VERY handy tax center that not only demystifies the sometimes-painful process of paying taxes on rental property but helps you aggregate your transactions into a single succinct tax package.

4. Cincinnati, Ohio

  • House price index: 7.4%
  • Home appreciation: 2.4%
  • Median property tax: $2,508
  • Median home cost: $260,000
  • Average monthly rent: $1,273
  • Rental vacancy rate: 6.9%

Sticking with the Ohio theme, Cincinnati has another one of the best rental markets in the US. Its homes are a bit more expensive than Cleveland’s, but the median sale price of homes in the Cincinnati area is still much lower than the national median of $436,800.

Cincinnati homes sell quickly, and the city was recently rated the number one place to live in Ohio by U.S News & World Report. As Cincinnati’s population and economy continue to grow, it will only become more attractive to real estate investors, making now an excellent time to buy in early.

5. Oklahoma City, Oklahoma

  • House price index: 3.9%
  • Home appreciation: 16.59%
  • Median property tax: $1,807
  • Median home cost: $260,000
  • Average monthly rent: $960
  • Rental vacancy rate: 6.9%

You might not expect Oklahoma City to be one of the best cities to buy rental property in, but it’s actually one of the best cities to invest in real estate. The average monthly rent is low, and the rental vacancy rate could be a bit lower, but the low taxes and low median home cost in the city make it very accessible.

Oklahoma City is also on the up-and-up, with steady population increases of around 1% year-over-year for the last four to five years. If the trend continues, the rental demand in the city will continue to increase, driving rental rates up and putting Oklahoma City on more investors’ radars.

6. Charlotte, North Carolina

  • House price index: 7.1%
  • Home appreciation: 2.89%
  • Median property tax: $1,945
  • Median home cost: $410,000
  • Average monthly rent: $1,751
  • Rental vacancy rate: 4.5%

Charlotte’s home prices are considerably higher than the other cities I’ve covered so far, but the city’s mind-boggling 120% home appreciation rate over the last eight years more than makes up for it. The city is one of the best cities for rental properties in 2023, with higher-than-average rental rates compared to similarly-sized cities.

Charlotte’s growth is its biggest asset. As more people pour into Charlotte, rental rates should rise — and home prices should continue to rise — giving investors who pull the trigger now the potential for excellent returns for the foreseeable future.

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7. Birmingham, Alabama

  • House price index: 6.1%
  • Home appreciation: 10.9%
  • Median property tax: $1,690
  • Median home cost: $238,473
  • Average monthly rent: $1,371
  • Rental vacancy rate: 11.7%

Birmingham, Alabama is another sleeper pick that I’m willing to bet wasn’t high on your list of the best cities for real estate investment. Home appreciation rates in Birmingham are a solid 10.9% year-over-year and the combination of low median cost and relatively high monthly rents make it my “hidden gem” and one of the best places to buy investment property.

Birmingham is one of the economically healthiest cities in Alabama, with growth in healthcare, finance, and manufacturing sectors in the last three to five years. This growth is sure to bring more workers to the city, increasing the rental demand and lowering the city’s moderately high rental vacancy rate.

8. Houston, Texas

  • House price index: 5.5%
  • Home appreciation: 7.11%
  • Median property tax: $3,089
  • Median home cost: $299,500
  • Average monthly rent: $1,580
  • Rental vacancy rate: 11.3%

The next city I want to highlight requires a trip back down south to the Lone Star State. Houston was one of the fastest-growing cities of the early 2000s during the dot-com craze. While it’s not quite hitting those rates again, its current growth puts it on my shortlist of where to buy rental property in 2023.

Houston’s home prices are below the national average, but its monthly rental rates are high, giving it the potential for excellent ROI right off the bat. The city’s rental vacancy rate and property taxes make it less desirable than other places on the list so far, but Houston’s current population growth and future job prospects make it a long-term favorite of mine.

9. Ocala, Florida

  • House price index: 8.0%
  • Home appreciation: 30%
  • Median property tax: $1,299
  • Median home cost: $270,000
  • Average monthly rent: $1,590
  • Rental vacancy rate: 10.9%

My penultimate pick takes us to the Sunshine State. Ocala doesn’t have the name recognition of Florida’s other cities, but that’s what makes it such a good opportunity for real estate investors.

Ocala’s rental rates hover around $1,600 per month, which is much higher than you’d expect given its high rental vacancy rate and low median home price. Speaking of home prices, Ocala’s home appreciation rate over the last year was a whopping 30%.

People are flocking to Ocala from other parts of Florida to take advantage of its comparatively low cost of living, making it an excellent time to invest in a rental property before prices catch up to demand.

10. Atlanta, Georgia

  • House price index: 5.6%
  • Home appreciation: -3.2%
  • Median property tax: $2,027
  • Median home cost: $310,000
  • Average monthly rent: $1,920
  • Rental vacancy rate: 9.8%

The final city I want to cover sits just a few hundred miles north of Ocala. Atlanta is a bit unusual compared to the other cities I discussed thus far. For starters, its median home price fell by 3.2% over the last year, which might be concerning to some investors. However, despite this slight downturn, rental rates in Georgia remain high, between $1,900 and $2,200 per month.

Atlanta’s job market continues to flourish, showing a 5% growth over the last year. The city’s economy also continues to grow, even after the impressive 30% growth it showed from 2010 to 2020.

The bottom line is that I think Atlanta is flying under a lot of real estate investors’ radars right now. The city’s rental rates are high compared to its property values, and its continued growth is a good sign for investors who are in it for the long haul.

Don’t Want the Hassle? Other Ways to Invest in Real Estate

While tools like Stessa can help, purchasing rental property is no small task. It takes a lot of time and effort to manage a rental property, time and effort that not everybody can spare.

If you want to invest in real estate but don’t want to own and manage a rental property yourself, here are some of my favorite alternative options.



One of the easiest ways to get into real estate investing is to purchase shares of a real estate investment trust (REIT). These work just like ordinary stocks, except the underlying is a basket of real estate investments instead of shares of a company.

Fundrise takes REIT investing to the next level by giving you access to proprietary eREITs — special real estate trusts that only Fundrise members can access. Fundrise makes getting into REIT investing extremely simple; it’s one of my go-to recommendations when people ask me how to get into real estate.

If Fundrise doesn’t strike your fancy, you can also invest in REITs through most brokers these days. My favorite traditional broker for REITs is eToro.

Real estate investment trusts are an asset class that lets you purchase shares of companies that manage real estate holdings that generate income. The vast majority of brokerages offer them — eToro is our favorite.

We already love eToro’s extensive offerings for traders — low or no-commission trades, a CopyTrader feature that lets you mirror the trades of pros, and a trading simulator that helps you test out strategies before you put money on the line.

But did you know that eToro also offers REITs? You can browse REITs or use eToro’s REIT Smart Portfolio.

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Cryptoassets are highly volatile and unregulated in the UK. No consumer protection. Tax on profits may apply.

Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.

eToro USA LLC does not offer CFDs and neither does it represent or assume any responsibility for the accuracy or completeness of the content of this publication, prepared by WallStreetZen, as a partner, using information available and public and not specific to the eToro entity.

Crowdfunded Residential Rental Properties

Another great option for people who don’t know where to buy rental property is to diversify by investing in crowdfunded residential rental properties. Crowdfunding platforms like Arrived Homes let you buy shares of investment properties to earn part of the property’s rental income each month.


Purchasing shares in an investment property through Arrived Homes eliminates all of the hassles you would have managing your own property. It’s one of the best ways to add real estate exposure to your portfolio, and I recommend it to anyone who will listen.

Crowdfunded Commercial Real Estate

Arrived Homes specializes in crowdfunded residential real estate, but other platforms — like Yieldstreet — offer access to crowdfunded commercial real estate instead.


Yieldstreet works similarly to Arrived Homes, but many of the opportunities are limited to accredited investors. Investors purchase shares of properties and get to share in the property’s rental income and appreciation.

Commercial real estate investing is much more complicated than residential real estate and requires greater capital, so crowdfunding through Yieldstreet is the only feasible way to get involved for most people.

Final Word:

In my opinion, San Antonio, Indianapolis, and Cleveland are three of the best places to buy rental property right now.

They offer a solid cost-benefit ratio right now but crucially have a lot of room to improve in the future. All three cities are experiencing population growth, which almost always goes hand in hand with increased demand for rental housing.

If you want to get into real estate investing but don’t want to own your own property, I recommend checking out a crowdfunding platform like Arrived Homes or Yieldstreet. If even that seems like too much, it’s hard to go wrong with a tried-and-true REIT through an established online broker like eToro.


What rental properties are most profitable?

The most profitable rental properties are in good locations and are well-maintained. Even if you invest in a property in one of the best rental markets in the US, you need to make sure that the property is in good shape and won’t require endless maintenance work and repairs. Single-family homes also tend to be more profitable than other types of rental properties.

Where is the highest real estate ROI in the US?

As of the first quarter of 2023, the highest real estate ROI in the US is found in cities like Houma, Louisiana, Dothan, Alabama, and Johnstown, Pennsylvania. These are some of the best places to buy rental property due to their high rental rates and low property values.

What is the best real estate to invest in?

In my opinion, the best real estate to invest in is a single-family home in one of the best cities for real estate investment I covered in this article. Single-family homes have better ROI statistics than other types of properties and are easier to manage than multi-family homes or commercial properties.

What is the best rate of return on rental property?

In general, the higher the rate of return, the better. However, there are a few different ways to measure your rate of return, each with its own advantages and disadvantages. To get a full picture of a property’s value as a source of income, you should estimate its cash-on-cash return, gross rent multiplier, net operating income, and cap rate.

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About the author

Dan Simms


Dan got started investing in the stock market in his early 20s, and he fell in love with making his money work for him. Flash forward 10 years, and he now owns multiple properties (one of which is a short-term rental), uses fractional investing apps like Acorns, and has a hand in cryptocurrency. He enjoys sharing what he's learned and spreading the joy of investing with other people in all different walks of life.