Best markets to invest in?

Question

Which cities do you think would be best to invest in and are set for growth over the next 5 years?

Melissa Justice · Answer

@Eric Shim,

Great question - when looking at cities with strong growth potential over the next 5 years, you want to focus on markets that combine:

*Population and job growth
*Affordability relative to income
*Landlord-friendly regulations
*Diverse economic drivers (not just one big employer)
*Strong rental demand

Here are some top picks (organized by region) that check many of those boxes and are popular with both new and experienced investors:

Midwest (Cash Flow + Stable Growth)
1. Cleveland, OH
* Low entry prices ($80K–$150K range)
* Strong cash flow potential
* Healthcare and education are major employers
* Revitalization happening downtown and in key suburbs

2. Indianapolis, IN
* Very landlord-friendly
* Diverse economy and low unemployment
* Consistent population growth and infrastructure development

Southeast (Growth + Affordability + Tax Benefits)

3. Birmingham, AL
* Strong demand for affordable housing
* High rent-to-price ratio
* Turnkey inventory readily available
* Section 8 and workforce housing markets are solid

4. Columbia, SC
* Government and military-driven economy (Ft. Jackson)
* Strong college and healthcare presence
* Emerging market with room to grow

5. Ocala or Citrus Springs, FL
* Popular among retirees and remote workers
* No state income tax
* New construction rentals under $250K with decent yields

Wildcard Growth Markets
6. Chattanooga, TN
* Tech and outdoor lifestyle hub
* Growing startup scene, strong tourism and logistics
* Still relatively affordable compared to Nashville

7. Fayetteville, NC
* Military-driven demand (Fort Liberty)
* Lower property taxes and high rental demand
* Entry point for new investors

Look for submarkets within these metros where population is growing faster than average, schools are improving, and new developments are going in - that’s often where both cash flow and appreciation intersect.

Always here to discuss markets more in depth - happy to help!

Best of luck,

Melissa

Samuel Diouf · Answer

A lot of investors based in expensive markets where the numbers don't work are choosing to purchase their investments OOS in the Midwest because of the affordability and numbers making more sense.

Ned Carey · Answer

Your own market. People who know there market best tend to get the best deals. If you invest out of state you increase both your costs and risk.

Kerlous Tadres · Answer

Hey Eric,
A great real estate investment market is driven by factors like population growth, job market stability, and economic diversity. Look for areas with expanding industries such as tech, healthcare, and education, as they create steady demand for housing. Cities with ongoing infrastructure development, such as new transportation hubs or business districts, also offer strong potential for appreciation. Additionally, affordability compared to national averages, along with a solid rental market and increasing demand from young professionals or families, makes a location prime for long-term growth. Be sure to assess local zoning laws, tax incentives, and overall quality of life, as these contribute to future market stability.

Marcus Auerbach · Answer

The Midwest. But it does not matter as much as you think. REI is not the stock market, where you have no control. With REI what you do matters much more than where you do it. And your home field advantage is probably >20%, so use it!

Joe Hammel · Answer

Metro Detroit has what 99% of Real Estate Investors want. Couple hundred bucks a door monthly cash flow, solid ROI, and yes plenty appreciation. (#1 appreciating city 2023)

I personally make well over $100k/yr cash flow from my portfolio here. All of which, I’ve purchased within the last 5 years.

There are 2 types of people who dog on Detroit..

1. People who don't actually own property in Detroit

2. People who did it wrong and weren't able to execute.

If you do it right, it’s arguably the best market to invest.

Purchase: $80k-$130k

Rent: $1100-$1500 (no rent control in MI)

1% rule: .9%-1.4% rule deals

Coc ROI: 4-12%

Total ROI: 20-40%

Cash flow: $50-$250/door (after all expenses and budgeting for maint, capex, vacancy)

Appreciation: 3-10%+ (has been double digit for a decade)

Location: C+, B-

These numbers are based on the “sweet spot” in Metro Detroit. These are largely in the suburbs and some markets within the city. You can find higher ROI (on paper) here and probably in other cities…but the probability of actually collecting rent significantly decreases. Where these numbers are found, there is a very high rate of rent actually being paid.

We have over a dozen Fortune 500 companies just in Metro Detroit with huge Healthcare, Auto, and mortgage industry National footprints. Ford, Rocket mortgage, Beaumont hospitals and more. All complimented with Amazon fulfillment centers, google, and more tech manufacturing jobs.

The bad reputation of “Detroit” comes from OOS investors wanting sub $40,000, D class properties in poor condition, because they pencil out to 2-3% deals on paper. We don’t buy those.

We have found what works and repeat it as much as funds allow.

Detroit has one the highest rent to price ratios in the country…and we focus on the best balance of price/location within the area.

If you/anyone is curious I'd be happy to share a picture of my portfolio.

Jimmy Lieu · Answer

Hey Ric! Great question — a lot of people are trying to figure that out right now with interest rates still high and prices not really dipping in most markets. I’d definitely suggest looking into Columbus, Ohio. I moved here from Portland in 2020 to invest and have built up a portfolio of 10+ rentals since then. Columbus has been one of the strongest markets in the Midwest for years, and it's still got a ton of upside. We've got serious population and job growth, plus a wave of huge companies building and expanding here — Intel is building a $26B campus, and Amazon, Meta, Google, Honda, Microsoft, Anduril, and more are adding major jobs and infrastructure. That kind of economic growth fuels demand for housing, both rentals and owner-occupied. Prices are still reasonable, especially compared to West Coast or Sunbelt cities, and you can still find deals that hit the 1% rule in the $130K–$180K range with solid cash flow and appreciation upside. Definitely a market to keep on your radar. Happy to connect and answer any questions you have!

James Wise · Answer

Saw Cleveland got mentioned. If you're looking at Cleveland give The Ultimate Guide to Grading Cleveland Neighborhoods a read. It's designed to help out of state investors keep themselves out of trouble.

Travis Biziorek · Answer

Detroit’s definitely one of my top picks if you’re looking at growth over the next 5 years—especially when factoring in affordability, rental demand, and appreciation potential.

I started investing in Detroit back in 2019 while living in the city, built a 12-door portfolio using the BRRRR strategy, and have been involved in the market ever since. I’ve since moved back to California, but my team still operates full-time on the ground there.

Here’s why I still believe in Detroit:

• Revitalization is real. Billions have been poured into the core, and it’s slowly rippling into the surrounding neighborhoods. Momentum is slow but steady.
• Rent-to-price ratio is strong. You can still find solid cash flow in C/C+ neighborhoods—though it’s getting tougher.
• Price points are low. That creates opportunity for newer investors, BRRRR deals, and value-add plays.
• Population is finally growing again. After decades of decline, Detroit’s population ticked up last year for the first time in a long time, which is a big psychological and economic milestone.

Revitalization is real. Billions have been poured into the core, and it’s slowly rippling into the surrounding neighborhoods. Momentum is slow but steady.

Rent-to-price ratio is strong. You can still find solid cash flow in C/C+ neighborhoods—though it’s getting tougher.

Price points are low. That creates opportunity for newer investors, BRRRR deals, and value-add plays.

Population is finally growing again. After decades of decline, Detroit’s population ticked up last year for the first time in a long time, which is a big psychological and economic milestone.

The catch? Detroit is super block-by-block, and managing properties remotely can be tough if you don’t have a solid team in place. It’s not a passive, plug-and-play type of market—at least not without experience or help. But if you’re willing to dig in and do the work (or work with someone who does), the upside can be really strong.

Happy to share more if you’re seriously considering it.

Min Zhang · Answer

From my experience investing in the Midwest, C-class neighborhoods have often been the sweet spot for hitting the 1% Rule. But aside from cash flow, I also look at key drivers like local job growth, especially in industries like healthcare, manufacturing, and logistics, which keep demand stable. Population trends matter as well as places with steady or growing populations tend to support rising rents and home values. That said, even if a property meets the 1% Rule and hits these indicators, you still need to do your homework. Sometimes a deal looks good on paper but is actually in a rougher neighborhood, which can hurt your investment. That’s why I always recommend do your due diligencce. Connect with an active investor in the area and pick their brains on what's working for them

Best markets to invest in?

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