4 Best Places to Buy an Investment Property If You're Considering Rentvesting

Forget house hacking: “rentvesting” is the current trend in homeownership.

Suncorp Bank summarizes the concept as “a homeownership strategy where you rent a property to live in that suits your lifestyle, while you own an investment property that fits your budget.”

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By renting in a more expensive area where they want to live but can’t afford to buy, and purchasing a rental investment property in a more economical part of town, annuitant investors get the best of both worlds. They enjoy the benefits of homeownership without the constraints of budget, location or lifestyle, while still receiving enough rental income to offset their housing costs.

The key is choosing the right place to put your plan into action. Here are four cities to consider investing in on rent, using Zillow’s average home values.

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Austin, TX

With an average home value of $548,654, Austin’s hip, artsy, and economically vibrant neighborhood has kept many potential buyers away — which is precisely why rental investors should consider it.

“Austin is a fantastic place to invest in rent,” said Martin Boonzaayer of The Trusted Home Buyer. “The city’s tech industry is on fire, attracting a steady stream of young professionals and families. The real estate market is still accessible, with many opportunities for property appreciation. With high rental demand driven by newcomers looking for jobs and a good lifestyle, Austin is a prime location to invest.

A savvy investor could purchase property in West University, where the average home value is less than $335,000. Meanwhile, the value in Zilker, Old West Austin or Barton Hills is closer to $1 million.

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Tampa, Florida

Many aspiring investors dream of owning a rental property in the beautiful, culturally unique and centrally located Tampa Bay area, but with an average value of $386,957, an investment in Tampa is out of reach for most – but not for smart investors.

“Tampa is a great market for investment properties,” Boonzaayer said. “Housing is affordable and the job market is strong, with growing sectors in finance, healthcare and tourism. The city attracts a diverse group of renters, from retirees to young professionals, which keeps rental demand high. Tampa offers a great mix of rental income and long-term property appreciation potential.

Annuity investors might consider buying in College Hill, Historic Ybor or North Ybor, where the average home value tops $200,000. Rent in upscale Ridgewood Park, however, is closer to $600,000.

Nashville, Tennessee

With an average home value of nearly $445,000, the days of Nashville being an inexpensive alternative to expensive coastal city living are in the past; However, it is the sound of opportunity presenting itself for annuity investors.

“The city’s economy is booming, with strong growth in healthcare, education and entertainment,” Boonzaayer said. “People are flocking here, which keeps the rental market active. Property prices are on the rise, but there are still good deals offering strong returns.

Consider buying in a neighborhood like Elizabeth Park, where the average home costs around $386,000, and renting in a neighborhood like Salemtown, where the average is almost $800,000.

Raleigh, North Carolina

Like other cities on this list, homes in Raleigh are generally more expensive than the national average of $360,681. The value of the property there is more than $448,000. But as with the others, this fact bodes well for annuity investors.

“Raleigh is a fantastic city to invest in rental properties,” Boonzaayer said. “It is part of the booming Research Triangle, known for its technology and research industries. The population is growing rapidly, leading to high demand for rental housing. With relatively affordable real estate prices and strong appreciation potential, Raleigh is a solid bet for rent investing.

There is certainly a wide range of choices. For example, the average property value in East Raleigh is about $421,000, and it exceeds $1.2 million in Glenwood.

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