Many of our clients are asking us about the best place to invest in real estate for 2022. It’s a good question, as previously, large cosmopolitan cities would have dominated the country’s top real estate market. But not anymore.

The global pandemic didn’t just uproot the entire working community in the United States, and around the world. It also caused some cataclysmic changes in residential real estate.

The demand for real estate in smaller metro areas has skyrocketed as more people discovered that they can

  • work from anywhere,
  • spend less on city center rents, and
  • escape dense crowds.

In fact, looking at the PwC report 2022 Emerging Trends in Real Estate reveals an interesting fact. In their list of the best places to invest in real estate in 2022, two of the top cities mentioned have populations of less than 2.5 million. And surprisingly, mega metropolises Los Angeles and San Francisco failed to enter the top 10.

The report also highlights that real estate demand actually surged. People can relocate more easily than before. And record low mortgage rates also allow them to buy homes they may not have considered in the past.

While mortgage rates are expected to creep back up, high demand, a recovering economy, and slow price increases signify that residential real estate remains affordable in many growing markets.

In this post, we’ve selected and analyzed five of the best places to invest in real estate for 2022.

1 Raleigh and Durham, North Carolina

This area in North Carolina is one of the best places to invest in rental real estate in the coming year. That’s due to the influx in high-tech jobs in the area’s Research Triangle.

Approximately one-third of Americans rent their homes, whereas the rate in Raleigh is 43% and in Durham it’s 52%. The reason is the large student population and young demographic who have moved here for work. This explains why the rents in downtown Raleigh grew by 9% in 2018. Jobs in the Research Triangle are bountiful, and in fact Raleigh is second only to Austin in technology job opportunities.

The median price of a house in Raleigh and Durham is around $320,000. In the past year, the value of real estate increased by 6.6% and is predicted to grow by nearly 10% in the next year. The average monthly rent for an apartment in Raleigh is $1,287, a 3% increase from a year ago.

Raleigh and Durham have lower unemployment rates than the national average, and the region’s annual average income is above the national average. This makes them two outstanding options for investing in rental real estate, as reliable tenants are in abundance, providing investors with a steady and passive monthly income.

2 Phoenix, Arizona

Phoenix is one of the fastest growing real estate markets in America and demand there has boomed, especially throughout the pandemic. This city is fast becoming a top destination for those who’ve been living in high-cost areas, such as Los Angeles, and are seeking a lower cost of living.

In 2020, Phoenix’s housing market started strong, and in March, the median home price in Metro Phoenix hit a record of $302,500. In Maricopa County, the median house price went up by 12.7% from last year. Even a global pandemic can’t slow down the real estate market in Phoenix and the sale prices are not declining. Now is the time to be investing and buying in Arizona real estate market.

Investors in Phoenix are attracted by the market’s high price-to-rent ratio of 25.9 and double-digit increase in rent prices. In fact, real estate investors in Phoenix are taking away more inventory than in any other of the top 30 metropolitan areas. Why is Phoenix one of the best places to invest in real estate? It’s better known as the Valley of the Sun (need we say more?).

3 Dallas / Fort Worth, Texas

Despite the impressive growth of equity, population, and median property values in Dallas, housing is still very much affordable.

The average price of a home in the Dallas metro area is $263,688 and median rents are $1,563 per month. Experts expect Dallas to see an increase in prices of real estate by 15% as millennials move in and start buying.

Many Fortune 500 companies and high-tech businesses are relocating to Dallas and other cities in Texas, like Austin. The reason for this is

  • the business-friendly environment and
  • better quality of life.

It therefore creates a great opportunity for property owners to serve this market.

According to Forbes, many people think Dallas is the second fastest-growing city in the country. Rent growth is certainly expected. And excellent real estate investment opportunities continue to come online faster than ever.

In fact, Dallas has the lowest home ownership rate in the country, with renting more affordable than buying. The demand for rental units has increased 14% over the last year, so it’s the perfect opportunity to invest in Dallas real estate.

4 Atlanta, Georgia

The real estate market in Atlanta didn’t fare well at the beginning of the pandemic. However, it eventually recovered in 2021 and overtook 2020’s sales, even as prices continued to creep up.

Did you know that 500 people move to Atlanta every day? Investors will want to beat the competition and invest soon, if they want to succeed in this diverse, youthful city.

Two of the best reasons to invest in rental real estate in Atlanta are

  • population growth and
  • equity growth.

The average home price in metro Atlanta is $247,000 and the median rent is $1,573. In the past decade, the population of the Atlanta metro area has grown by 14%, while the six-year equity growth alone is an impressive 50%.

5 Seattle, Washington

For those who can afford to, investing in real estate in Seattle promises lucrative prospects. Housing prices have double in the past five years and professionals expect rental occupancies to remain high.

Several factors contribute to a strong real estate market in Seattle. These include

  • lower interest rates,
  • ample employment opportunities,
  • increasing home values, and
  • a wealth of development opportunities.

Google has just increased the size of its new campus in the city. Facebook (now Meta) has, too. This has attracted an influx of new renters. The average rent for an apartment in Seattle is $2,169, a 6% increase on the previous year. It may seem very expensive, but Seattle’s demographics and economy make sure that it remains a profitable and popular real estate market in the U.S.

Partner With the Professionals

Investing in more real estate in 2022 – especially rental real estate – will be a great addition to your portfolio and bring in a passive income for many. If you want help to choose the best place to invest in real estate, our professionals at Realty Capital Partners (RCP) can partner with you to:

  • Study the real estate market including socioeconomic and demographic trends
  • Look for promising opportunities for you in diverse asset classes
  • Take care of the operation and management of the properties you invest in

Contact us for a consultation today to help ensure the success and growth of your portfolio in 2022.

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