Top 15 Cities Where People Are Buying Investment Properties

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Editor’s Observe: This story initially appeared on Stessa.

Within the heated residential actual property market of the final two years, actual property buyers have confronted fierce competitors and rising costs. Whereas many potential homebuyers have been drawn into the market with traditionally low rates of interest and funding returns, they’ve ceaselessly discovered themselves outbid.

Traders bought a report 18.4% of all U.S. properties bought within the final quarter of 2021, up from 12.6% within the final quarter of 2020. Whereas actual property funding has reached new heights during the last yr, the variety of properties bought by buyers has grown steadily because the collapse of the housing bubble and the Nice Recession within the mid-2000s.

Between appreciation in residence values and regular earnings from rents, residential actual property has confirmed to be a beautiful asset class for buyers.

These attributes proceed to make actual property a fascinating funding. However for buyers who require a mortgage mortgage to purchase a rental property, financing may be harder to return by.

For buyers who depend on financing to buy property, many of the prime places for funding properties are discovered within the South. These states have among the lowest costs to purchase real estate within the nation, which makes them extra simply attainable for potential actual property buyers.

The info used on this evaluation is from the Federal Monetary Establishments Examination Council (FFIEC) and relies on Home Mortgage Disclosure Act filings.

Listed here are the massive U.S. metros (inhabitants 1 million or extra) the place persons are mortgaging funding properties…

15. San Antonio-New Braunfels, TX

San Antonio, Texas home
Natalia Silyanov / Shutterstock.com
  • Funding property loans as a proportion of all buy loans: 8.7%
  • Complete funding property loans: 1,987
  • Median property worth for funding properties: $205,000
  • Median down fee for funding properties: $50,000
  • Median rate of interest for funding properties: 3.9%

14. Las Vegas-Henderson-Paradise, NV

Las Vegas neighborhood with desert hills beyond.
Christopher Boswell / Shutterstock.com
  • Funding property loans as a proportion of all buy loans: 8.8%
  • Complete funding property loans: 2,361
  • Median property worth for funding properties: $285,000
  • Median down fee for funding properties: $80,000
  • Median rate of interest for funding properties: 4.0%

13. Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

Philadelphia neighborhood homes
AnjelikaGr / Shutterstock.com
  • Funding property loans as a proportion of all buy loans: 8.9%
  • Complete funding property loans: 5,214
  • Median property worth for funding properties: $225,000
  • Median down fee for funding properties: $60,000
  • Median rate of interest for funding properties: 4.2%

12. San Diego-Chula Vista-Carlsbad, CA

Rigucci / Shutterstock.com
  • Funding property loans as a proportion of all buy loans: 9.0%
  • Complete funding property loans: 2,493
  • Median property worth for funding properties: $635,000
  • Median down fee for funding properties: $200,000
  • Median rate of interest for funding properties: 3.6%

11. Nashville-Davidson–Murfreesboro–Franklin, TN

House in Nashville, Tennessee
eakkarat rangram / Shutterstock.com
  • Funding property loans as a proportion of all buy loans: 9.0%
  • Total funding property loans: 2,932
  • Median property worth for funding properties: $265,000
  • Median down fee for funding properties: $70,000
  • Median rate of interest for funding properties: 4.0%

10. Birmingham-Hoover, AL

Birmingham Alabama home
Carolyn Might Wright / Shutterstock.com
  • Funding property loans as a proportion of all buy loans: 9.4%
  • Complete funding property loans: 1,274
  • Median property worth for funding properties: $125,000
  • Median down fee for funding properties: $30,000
  • Median rate of interest for funding properties: 4.1%

9. Virginia Seashore-Norfolk-Newport Information, VA-NC

Virginia Beach, Virginia
JoMo333 / Shutterstock.com
  • Funding property loans as a proportion of all buy loans: 10.2%
  • Complete funding property loans: 1,704
  • Median property worth for funding properties: $195,000
  • Median down fee for funding properties: $50,000
  • Median rate of interest for funding properties: 4.3%

8. Kansas Metropolis, MO-KS

Kansas City, Missouri
Scruggelgreen / Shutterstock.com
  • Funding property loans as a proportion of all buy loans: 10.6%
  • Complete funding property loans: 3,205
  • Median property worth for funding properties: $155,000
  • Median down fee for funding properties: $40,000
  • Median rate of interest for funding properties: 4.1%

7. Austin-Spherical Rock-Georgetown, TX

Austin, Texas
Brandon Seidel / Shutterstock.com
  • Funding property loans as a proportion of all buy loans:10.9%
  • Complete funding property loans: 4,435
  • Median property worth for funding properties: $285,000
  • Median down fee for funding properties: $70,000
  • Median rate of interest for funding properties: 3.5%

6. Los Angeles-Lengthy Seashore-Anaheim, CA

Home in Los Angeles
divanov / Shutterstock.com
  • Funding property loans as a proportion of all buy loans: 10.9%
  • Complete funding property loans: 8,806
  • Median property worth for funding properties: $875,000
  • Median down fee for funding properties: $310,000
  • Median rate of interest for funding properties: 3.7%

5. St. Louis, MO-IL

Homes in St. Louis Missouri
Rob Neville Photographs / Shutterstock.com
  • Funding property loans as a proportion of all buy loans: 11.8%
  • Complete funding property loans: 4,152
  • Median property worth for funding properties: $145,000
  • Median down fee for funding properties: $40,000
  • Median rate of interest for funding properties:4.1%

4. New Orleans-Metairie, LA

Homes in New Orleans, Louisiana
Ellie-Rose Cousins / Shutterstock.com
  • Funding property loans as a proportion of all buy loans: 12.4%
  • Complete funding property loans: 1,308
  • Median property worth for funding properties:$240,000
  • Median down fee for funding properties: $60,000
  • Median rate of interest for funding properties: 4.5%

3. Tulsa, OK

Home in Tulsa, Oklahoma
Winery Perspective / Shutterstock.com
  • Funding property loans as a proportion of all buy loans: 13.2%
  • Complete funding property loans: 1,390
  • Median property worth for funding properties: $145,000
  • Median down fee for funding properties: $30,000
  • Median rate of interest for funding properties: 4.4%

2. Memphis, TN-MS-AR

Homes in Memphis, Tennessee
Steven Body / Shutterstock.com
  • Funding property loans as a proportion of all buy loans: 20.6%
  • Complete funding property loans: 2,560
  • Median property worth for funding properties: $115,000
  • Median down fee for funding properties: $30,000
  • Median rate of interest for funding properties: 4.1%

1. Oklahoma Metropolis, OK

Shane Wilson Hyperlink / Shutterstock.com
  • Funding property loans as a proportion of all buy loans: 20.9%
  • Complete funding property loans: 3,549
  • Median property worth for funding properties: $155,000
  • Median down fee for funding properties: $40,000
  • Median rate of interest for funding properties: 4.3%

Methodology

Serious homeowner
Pranithan Chorruangsak / Shutterstock.com

The info used on this evaluation is from the Federal Monetary Establishments Examination Council (FFIEC) and relies on Home Mortgage Disclosure Act filings. Solely standard residence buy loans authorised in 2020 have been thought-about.

To find out the places the place persons are shopping for funding properties, researchers calculated funding property loans as a proportion of all buy loans. Within the occasion of a tie, the situation with the larger complete funding property loans was ranked increased. To enhance relevance, solely metropolitan areas with at the least 100,000 residents have been included. Moreover, metros have been grouped into cohorts primarily based on inhabitants measurement: small (100,000 to 349,999), midsize (350,000 to 999,999), and enormous (1,000,000 or extra).

Disclosure: The data you learn right here is at all times goal. Nevertheless, we typically obtain compensation if you click on hyperlinks inside our tales.

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