The Top 10 Cities for Flipping and Renting in 2020

When we launched BPInsights in March 2020, we wanted to highlight markets we thought worth investigating—and I think we’ve done a fabulous job of finding unique locations with stellar investing options. Check out our favorite cash flow markets and the best places to invest $50,000. Are you a duplex investor? We’ve got you covered, too.

For our end-of-the-year roundup, we want to know what cities you’re most interested in. Where are BiggerPockets members investing? And is there a difference between where you’re flipping and where you’re renting?

Turns out there is.

We pulled the stats from BiggerPockets’ calculator usage to find your favorite cities to flip and rent. Here are the top 10 for both flipping and renting, according to our users.

Houston

Rent-to-price ratio: 0.7%
Average median sales price (Jan-Sept. 2020): $192,878
Average median rents (Jan-Sept. 2020): $1,419

Once known mainly as an oil town, Houston has become a cultural hotspot with a thriving food scene, an entire Museum District, lots of professional sports teams, and a quickly growing population—up 10.7% in the past ten years. With all those newcomers, there’s plenty of demand for rentals.

But with steadily rising home values—up 6.6% in just the last year—and a slew of buyers seeking move-in ready homes, Space City is the number one city for flips and rentals according to BiggerPockets’ fix and clip calculator and our rental property calculator.

Atlanta

Rent-to-price ratio: 0.6%
Average median sales price: $286,996
Average median rents: $1,629

All eyes are on Georgia this year as the longtime red state turns purple. But for flippers, it’s all about Atlanta. The metro has been growing like weeds with an 18.7% population increase over the past decade, thanks in part to its solid and diverse economy.

With a relatively low cost to enter the housing market, many of those new residents want to buy. And like everywhere else this year, they want renovated homes—which, in part, has led to a steep increase in home prices over the past year.

San Antonio

Rent-to-price ratio: 0.7%
Average median sales price: $185,894
Average median rents: $1,198

Like nearby Houston, San Antonio also earned itself spots on both the flip and rent lists. The river town, which boasts seven Fortune 1000 companies, has seen a 43% appreciation in real estate over the past ten years, with an 8.3% rise just last year.

Why the boom? Turns out, East Coasters and Californians love the home of The Alamo and are moving in droves. Earlier this year, it was estimated that about 66 people move to San Antone every day to take advantage of its low cost of living.

Dallas

Rent-to-price ratio: 0.6%
Average median sales price: $259,475
Average median rents: $1,466

While Dallas doesn’t have the population of Houston or San Antonio, new residents are flocking there like sand flies on sunbathers. More people are moving to the Big D than any other city in the United States.

2020 has been rough on us all, but even throughout COVID-19 the economy remained strong. Home prices rose substantially, too. But there are still plenty of affordable pockets in and around the city that will continue to increase in value and grow, making it a great place to flip.

Baltimore

Rent-to-price ratio: 1.4%
Average median sales price: $115,082
Average median rents: $1,472

Charm City is charming both flippers and landlords these days. The city is another to earn spots on both lists. Since last spring, properties have been selling at a super-speed pace with median sales prices reaching record highs and frequent bidding wars.

It may sound odd for a metro that’s been decreasing in population over the past decade. But the low interest rates of 2020 have made buying a home cheaper than renting in many cases—and many of these new buyers don’t want contractors schlepping around their homes in the midst of a pandemic.

Indianapolis

Rent-to-price ratio: 0.9%
Average median sales price: $185,231
Average median rents: $1,640

Real estate in Indianapolis—home of the world-renowned Indianapolis 500—has been flying off the MLS this year. Many of the Millennials who had been living in pricey metros like New York and Boston have realized that Indy has many of the same cosmopolitan amenities they’ve become accustomed to at a fraction of the cost.

In October, 65% of the homes sold were off the market in just two weeks, with values rising by 10.5% in just a year. That’s why it’s been dubbed one of the “Top Housing Markets to Watch in 2021”—and, according to our users, a great place to rent and flip.

Phoenix

Rent-to-price ratio: 0.5%
Average median sales price: $291,111
Average median rents: $1,374

Remote workers have been flocking to Arizona like seagulls to a picnic since the start of the pandemic, expanding the already expanded population of cities like Phoenix. So, again, like other metros that are great for both flippers and renters, those new residents need a place to rent before they buy.

But one difference between Phoenix and other cities on these lists is that the city has been economically hammered by COVID-19. Foreclosure and eviction rates are two times the U.S. average, particularly in low-income neighborhoods west and south of the city.

Chicago

Rent-to-price ratio: 0.6%
Average median sales price: $304,167
Average median rents: $1,743

Early in the pandemic, there were signs of a mass suburban migration. For Chicago, at least, that hasn’t quite panned out as expected. A recent report from the Illinois Association of Realtors reported a 21.9% increase in sales in the city, with prices up 14.5%.

While lots of residents have been leaving their pricey downtown apartments, there are still plenty of buyers and renters who are banking on getting back to all the restaurants, bars, and entertainment in and around the Loop in the post-COVID-19 times.

Philadelphia

Rent-to-price ratio: 0.9%
Average median sales price: $195,761
Average median rents: $1,615

Going into 2020, Philly had already seen a surge in home prices due to an influx of new residents from unaffordable nearby megapolises New York City and Washington D.C. The remote workers of the pandemic super-charged the trend.

Like most of the United States in the times of COVID-19, the City of Brotherly Love has been in the midst of a seller’s market, with not-so-loving bidding wars and low inventory. Yet prices are still expected to increase another 8.3% next year, so it’s ideal for flippers or those who want to hold onto properties.

Austin

Rent-to-price ratio: 0.4%
Average median sales price: $373,300
Average median rents: $1,485

The “Live Music Capital of the World” has been growing like gangbusters over recent years. In the past decade, it’s population has ballooned by more than 22% with a slew of tech companies opening up shop—including Oracle, the latest to make an announcement.

And with those well-paying jobs, real estate prices have flown off the charts. Home sales have jumped 23.8% year over year and prices increased 19.7% over November 2019. Those substantial leaps have made it less attractive for landlords while alluring flippers who want to get in on the growth.

Cleveland

Rent-to-price ratio: 1.1%
Average median sales price: $88,856
Average median rents: $1,004

Cleveland has lost population, industry, and, of course, LeBron—but the sports-obsessed metro has been heating up in terms of real estate. In October 2020, more than 40% of the homes on the market sold within two weeks, earning it a slot on Forbes list of “Top Housing Markets to Watch in 2021.”

There certainly could be opportunity for flippers, but the higher rent-to-price ratio makes it a top pick for those seeking to grow their rental portfolio.

Columbus

Rent-to-price ratio: 0.7%
Average median sales price: $163,858
Average median rents: $1,155

Two-hours south of Cleveland, Columbus’ housing market is also on the up-and-up. More Cowtown-area homes are anticipated to sell this year than ever before—with far higher prices to boot.

There just aren’t enough homes on the market to meet buyer demand, which can make finding a flip deal tough; however, the low price to get in makes it an attractive market for landlords looking to invest long term.

Memphis

Rent-to-price ratio: 1%
Average median sales price: $108,765
Average median rents: $1,041

The home of Elvis’ Graceland, the Blues Hall of Fame, and some of the best ribs in the United States has become a magnet for Millennials. A few years ago, real estate analytics firm RCLCO found the city’s population of young(ish) adults grew by nearly 10%. While those folks have reached the home buying age, Memphis—and its extremely attractive home prices—has become a favorite market for out-of-state investors who have been snatching rental homes off the market.

While these Midwestern metros and sunbelt cities don’t necessarily have a ton in common with one another on the surface, all of them—whether they’re highly rated for landlords, flippers or both—boast median home prices far below the national rate. And that means investors can start investing without completely draining the piggy bank.

Are you surprised by BiggerPockets members’ favorite cities?

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.