For most Americans, investing in real estate means buying a home and living in it. Others might buy a second home to serve as a weekend getaway or vacation destination. Then there are those who take it a step further by investing in residential, commercial or other properties to generate income and build wealth.
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No matter how you invest in real estate, the same basic rules apply. Getting the best return on your money typically means finding the right combination of price, financing, market dynamics — and location.
When it comes to location, large coastal cities such as Boston, New York, Miami, Los Angeles, San Francisco and Seattle get a lot of attention from real estate investment professionals with deep pockets. But that doesn’t necessarily mean they’re the best cities for real estate investing — especially if you’re looking for something more affordable.
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A new study from luxury bathroom fixture company Badeloft USA identified the most underrated U.S. cities for real estate investments based on an analysis of safety, affordability and market trends.
Badeloft USA chose cities based on their strong safety ratings, according to a March 25 press release. Researchers then compared property prices per square foot in 2020 and 2024 and calculated how much they’ve changed over time. Average home prices were also considered to provide a “fuller picture” of the market
In terms of price appreciation during the years studied, Jacksonville, Florida led the way among underrated cities – despite having a comparatively low safety index score vs. other cities.
Here are the 10 most underrated cities for real estate investments, according to Badeloft USA.
|
City |
Safety Index Score |
Avg. House Price |
5-year price change |
|
Jacksonville, Florida |
43.6 |
$290,862.10 |
68.59% |
|
Tampa, Florida |
53.8 |
$375,827.30 |
55.74% |
|
Austin, Texas |
57.4 |
$92,802.00 |
55.35% |
|
Orlando, Florida |
50.4 |
$147,500.30 |
46.66% |
|
Dallas, Texas |
48.6 |
$307,400.00 |
46.22% |
|
Tucson, Arizona |
45.4 |
$329,321.80 |
40.97% |
|
San Antonio, Texas |
51.9 |
$253,099.20 |
40.13% |
|
Irvine, California |
69.0 |
$95,230.10 |
34.86% |
|
Columbus, Ohio |
50.4 |
$109,427.40 |
34.39% |
|
Kansas City, Missouri |
41.9 |
$221,922.70 |
33.39% |
If you’re interested in investing in real estate and don’t have much experience, there are certain steps you should take to improve your chances of success. Quanique Johnson, founder and CEO of LQ Logistics LLC and a licensed real estate agent, offered these five tips in a 2024 blog for Forbes:
-
Research the market to get a decent understanding of local property values, rental rates, vacancy rates, economic trends and buying opportunities.
-
Start small by focusing on single-family homes or duplexes to gain experience and knowledge before moving onto bigger projects.
-
Focus on properties that can produce enough cash flow to produce a profit after expenses such as mortgage/loan payments, property taxes, insurance, maintenance and vacancies.
-
Diversify your portfolio by investing in different types of properties and locations.
-
Leverage financing wisely by seeking out favorable and flexible loan terms and ensuring you have a manageable debt-to-income ratio.
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This article originally appeared on GOBankingRates.com: 10 Most Underrated Cities For Real Estate Investments in 2025