Best Cities to Invest in Wholesale Real Estate 2024

Best Cities to Invest in Wholesale Real Estate 2024

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Are you looking to expand your real estate investing areas, or thinking about getting started in real estate? Well, we’ve assembled a list of the best cities to invest in real estate for 2024.

Curious to see how we came up with this list? Stick around to the end to learn more about the methodology and why certain criteria were important to factor in when looking for investment properties. Without further ado let’s hop right into the list.

Top 20 Cities to Invest in Real Estate

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1. Cleveland, OH

Cleveland, Ohio, emerges as a compelling investment destination in 2024, showcasing a blend of stable market indicators and attractive city features. With a House Price Index at 457.01, the city presents a robust real estate market. The median property tax rate, standing at a modest 1.29%, further enhances its appeal to investors looking for sustainable growth. A rental vacancy rate of 3.8% indicates a healthy demand for rental properties, making it an ideal location for rental investments.

Financially, Cleveland is positioned favorably with a Debt to Income Ratio of 1.14, suggesting a balanced economic environment. The Consumer Price Index at 282.76 reflects the city's manageable cost of living, which is a key factor in attracting a steady influx of residents and investors.

Beyond the numbers, Cleveland is renowned for its rich cultural heritage, vibrant arts scene, and iconic landmarks like the Rock & Roll Hall of Fame. The city's ongoing development projects and commitment to innovation make it not just an economically sound choice, but also a location with a high quality of life.

This blend of favorable economic indicators and an enriching living experience positions Cleveland, OH, as a top city to invest in for 2024.

2. Toledo, OH

Toledo, Ohio stands out in 2024 as an intriguing option for real estate investors, mirroring Cleveland's promising metrics yet presenting its unique charm. Like its Ohioan counterpart, Toledo boasts a House Price Index of 457.01, reflecting a stable and growing real estate market. This is complemented by a similarly attractive median property tax rate of 1.29%, a boon for investors seeking long-term asset appreciation.

The city's rental market is vibrant, evidenced by a 3.8% rental vacancy rate, indicating a steady demand for rental properties. This makes Toledo a hotspot for those looking to invest in rental housing. Financial health is further underscored by a Debt to Income Ratio of 1.14, portraying a balanced and resilient local economy.

Toledo's Consumer Price Index, sitting at 282.76, is indicative of an affordable cost of living, a factor that continually attracts new residents and investors. What sets Toledo apart is its unique blend of industrial heritage and modern innovation, coupled with the natural beauty of Lake Erie's shoreline.

Investors will find Toledo's commitment to urban revitalization and its strategic location as key drivers for economic growth. This, along with its distinctive blend of urban and natural attractions, positions Toledo, OH, as a uniquely appealing choice for investment in 2024.

3. Columbus, OH

In 2024, Columbus, Ohio, distinguishes itself as an attractive investment locale. Sharing the steady House Price Index of 457.01 and a favorable median property tax rate of 1.29% with its Ohio peers, Columbus stands out with a slightly higher Debt to Income Ratio of 1.25. This indicates a robust and growing local economy, offering a secure environment for real estate investments.

The city maintains a healthy rental market, evident from its 3.8% rental vacancy rate. Along with an affordable Consumer Price Index of 282.76, Columbus combines economic stability with a cost-effective living environment.

Columbus's unique draw lies in its vibrant urban energy, diverse cultural scene, and renowned educational institutions, making it a compelling choice for investors in 2024.

4. Cincinnati, OH

Cincinnati, Ohio, shines in 2024 as a prudent choice for property investors. Echoing Columbus with a House Price Index of 457.01 and a median property tax rate of 1.29%, Cincinnati offers reassuring stability in its real estate market. Its debt-to-income ratio stands at 1.25, reflecting a solid and expanding economy, ideal for investment opportunities.

With a 3.8% rental vacancy rate, Cincinnati indicates a strong and consistent demand in the rental sector. The city’s Consumer Price Index at 282.76 points to an appealing cost of living, attracting a steady stream of new residents.

Cincinnati's appeal is further enhanced by its rich historical background, a booming arts scene, and its picturesque riverfront setting. These qualities, coupled with economic vitality, make Cincinnati, OH, an alluring and wise investment choice in 2024.

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5. Memphis, TN

As we celebrate Memphis, Tennessee, in 2024, it emerges as a dynamic market for real estate investors. The city boasts a remarkable House Price Index of 647.17, highlighting a significantly growing real estate market. This growth is further supported by an enticingly low median property tax rate of 0.48%, making it a financially appealing destination for investors.

Memphis’s rental market presents a unique opportunity with a slightly higher rental vacancy rate of 5.4%. This suggests a market ripe for rental investments, with room for growth and development. The Debt to Income Ratio here is 1.14, signaling a balanced economic landscape conducive to investment.

The city's Consumer Price Index stands at 296.422, indicating a slightly higher cost of living, yet manageable within the vibrant economic environment Memphis offers. Known for its rich musical heritage and as the birthplace of blues, Memphis combines cultural depth with economic promise.

The blend of a strong, growing real estate market, low property taxes, and a unique cultural allure make Memphis, TN, an exciting and strategic choice for investors in 2024.

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6. Madison, WI

Madison, Wisconsin, in 2024, presents itself as a thriving investment destination. With a House Price Index of 554.21, it shows a healthy and appreciating real estate market. The city’s median property tax rate stands at 1.38%, slightly higher than some of its counterparts, yet it's balanced by the market's potential for growth.

The rental market in Madison is robust, as indicated by a 4.2% rental vacancy rate. This points to a strong demand for rental properties, ideal for investors looking to enter the rental market. The city maintains a Debt to Income Ratio of 1.14, suggesting a stable and well-balanced economic environment for investments.

The Consumer Price Index here, at 282.76, mirrors other favorable cities, ensuring an affordable living cost. Madison is renowned for its exceptional quality of life, vibrant cultural scenes, and status as a hub for education and innovation. This blend of a buoyant real estate market, cultural richness, and economic stability makes Madison, WI, a standout choice for investment in 2024.

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7. Lexington, KY

Lexington, Kentucky, emerges in 2024 as a blossoming hub for real estate investment. The city's House Price Index stands at an impressive 519.63, indicating a robust and growing property market. Coupled with a relatively low median property tax rate of 0.74%, Lexington offers an attractive fiscal environment for investors.

The rental market here is active and promising, shown by a rental vacancy rate of 4.3%. This suggests a healthy demand for rental properties, making it a viable market for rental investments. Lexington's economic health is further reflected in its Debt to Income Ratio of 1.25, pointing towards a stable and prosperous financial environment.

With a Consumer Price Index of 296.422, Lexington presents a slightly higher cost of living, yet it remains within a manageable range for residents and investors alike. The city is known for its rich equestrian heritage and vibrant academic community, adding to its allure as a destination for both living and investing.

Lexington’s combination of a strong real estate market, low property taxes, and a unique cultural identity positions it as an attractive and promising investment location in 2024.

8. Louisville, KY

In 2024, Louisville, Kentucky, stands out as a distinctive investment gem, sharing similar financial metrics with Lexington, yet offering its own unique appeal. The city's House Price Index at 519.63 signifies a solid and expanding property market, matched with an advantageous median property tax rate of 0.74%, making it financially appealing for real estate investments.

Louisville's rental market demonstrates potential, with a 4.3% rental vacancy rate indicating a steady demand for rental properties. This is especially attractive for investors looking to delve into the rental housing market. The city's Debt to Income Ratio is at a healthy 1.25, signifying a well-balanced economic backdrop for investors.

With a Consumer Price Index of 296.422, Louisville maintains a slightly higher yet manageable cost of living. The city is celebrated for its rich cultural heritage, including the famous Kentucky Derby, and its vibrant arts scene, adding to its charm as an investment location.

Louisville, KY, with its strong real estate dynamics, favorable tax environment, and rich cultural landscape, emerges as a compelling choice for investors in 2024.

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9. Detroit, MI

Detroit, Michigan, in 2024, marks itself as a city of resurgence and opportunity in the real estate investment sphere. The city displays a House Price Index of 512.23, indicating a steadily growing property market. This growth is complemented by a favorable median property tax rate of 1.22%, striking a balance between investment cost and potential returns.

The rental market in Detroit shows significant promise with a rental vacancy rate of 4.8%. This higher rate suggests a market with potential for new investments and developments in the rental sector. The city’s Debt to Income Ratio, at a stable 1.25, reflects a healthy economic environment conducive to investment.

Detroit’s Consumer Price Index is positioned at 282.76, mirroring an affordable cost of living. Known for its rich automotive history and cultural resurgence, Detroit is reinventing itself as a hub for innovation and creativity. This transformation, combined with its economic indicators, makes Detroit, MI, a city ripe with investment potential in 2024.

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10. Indianapolis, IN

Indianapolis, Indiana, in 2024, stands out as a vibrant and promising choice for real estate investors. The city boasts a House Price Index of 477.04, showcasing a steadily growing property market. This is paired with an exceptionally low median property tax rate of 0.70%, offering a financially attractive landscape for both new and seasoned investors.

The rental market in Indianapolis is particularly active, indicated by a rental vacancy rate of 5.1%. This suggests an increasing demand for rental properties and opportunities for growth in this sector. The city's Debt to Income Ratio is a stable 1.25, pointing to a healthy and balanced economic environment.

With a Consumer Price Index of 282.76, Indianapolis offers an affordable cost of living, contributing to its appeal as a destination for both residents and investors. Known for its sporting culture, particularly the Indianapolis 500, and a thriving downtown area, the city combines a strong economic foundation with a lively and engaging lifestyle.

Indianapolis, IN, with its favorable economic indicators and vibrant community life, emerges as an attractive and lively option for investment in 2024.

Honorable Mentions

The rest of these cities round out the top 20 list based on our ranking criteria.

  1. Omaha, NE
  2. Lincoln, NE
  3. Tulsa, OK
  4. Oklahoma City, OK
  5. Minneapolis, MN
  6. St. Paul, MN
  7. Pittsburgh, PA
  8. Fort Wayne, IN
  9. Kansas City, MO
  10. St. Louis, MO

Methodology

In order to determine what cities would be the best to potentially invest, whether that's wholesale real estate or other types, in a variety of different factors could come into play. So, I started with a list of the 100 largest cities in the United States and then gathered the following data points for them.

Now, I tried to find the most recent data for each of the cities, sometimes which meant pulling data from 2022 from the census and other times it meant pulling it from the last quarter of 2023 for data. But each of the data points had a weight behind it, in order to help balance the list.

House Price Index (25%)

The House Price Index (HPI) is a metric that is used to track changes in the prices of residential real estate. You can find the HPI for different areas from government agencies, real estate associations, or data companies. Believe it or not, the information is used not only by investors but also by economists to help monitor the health of the market.

Now HPI is typically based on a weighted average of single-family property prices where each home is assigned a weight proportional to its value. Then those weights are adjusted over time to reflect changes in the market and the resulting index is used to compare home prices across different regions and time periods.

So, you might still be wondering why this point of data is an important factor when deciding where to invest. Well, it can help identify the different trends in the market and evaluate the potential returns of a given investment.

You can find the HPI for different areas from the U.S. Federal Housing Agency or take a look at the map below ⬇️.

Median Property Taxes (20%)

Median property taxes are way more simple to understand in my opinion than HPI, so I’ll keep the explanation brief. This refers to how much the property taxes are collected only instead of finding this out for each individual property, it’s been compiled into the average percentage for each area.

Now, this is important to factor into where you want to start investing especially if you are going to buy and hold a property. You want to make sure to factor in property taxes into if a deal will make sense to you.

The lower the property tax for the area the less you will need to pay. To calculate this number for our ranking system I took the "Median Real Estate Taxes paid" and divided it by the "Median Home Value" according to the latest data, from 2022, the US Census Bureau had available.

Rental Vacancy (25%)

This is another easy one to see how it fits into the grand scheme of this whole puzzle. Rental vacancy refers to the percentage of rental units that are unoccupied and available for rent at a given time. A high rental vacancy rate can indicate a weak rental market, while a low vacancy rate may suggest strong demand for rental housing.

If you are buying properties for rentals, you’ll want to look in areas that have a higher demand for rental housing. Even if you are wholesaling real estate there is a good chance that some of your buyers want to hold the properties to use as rentals, so it is a win-win scenario to look at the vacancy rates in each city.

Debt to Income Ratio (DTI) (15%)

Debt-to-income ratio (DTI) is a financial metric that compares a person's monthly debt payments to their monthly income. It is calculated by dividing the total amount of debt payments by the total income for a given period, usually expressed as a percentage. A lower DTI ratio indicates that a person has a lower debt burden and is generally considered more creditworthy.

A tenant or buyer with a high DTI ratio may be at greater risk of defaulting on their rent or mortgage payments, which could negatively impact the investor's returns. Now looking at this from an overall city location is helpful because you can determine which cities have a higher risk of defaulting on the payment based on their DTI.

Consumer Price Index (CPI) by Region (15%)

The Consumer Price Index (CPI) is a measure of the average change in the prices of a basket of goods and services commonly purchased by households over time. It is used to track inflation and adjust for changes in the cost of living.

Real estate investors should consider the CPI when making investment decisions because inflation can affect the purchasing power of the rental income or resale value of a property. By knowing the CPI for different areas you can see how it impacts things like rental pricing, resale value, and potential costs in the area.

Resources for Data

In case you’d like to do a little digging for the information in your area you can check out the resources I used to compile the information for our chart.

Conclusion

Thanks for checking out our list of the best cities to invest in for 2024. We hope you learned a little about the potential in each market as well as the criteria you should be looking at when making your decisions on where to invest. It is important to note that while this list of the 25 best cities to invest in is a great starting point, it's important to remember to research and evaluate each individual market yourself before making any investment decisions.

 

Samantha Ankney

About Samantha Ankney

Samantha has been a media specialist for DealMachine for 2.5 years. She produces, edits, writes, and publishes all media that is distributed to the DealMachine and Real Estate Investing community.