The Best Markets to Buy Rental Properties Right Now (2025)

New toThese are the best markets to buy rental properties right now. You may be hearing that cashflow has dried up, but it is still alive and well in 2025. If you know where to look today, we will reveal three of our favorite markets for anyone looking to progress towards financial freedom through real estate, plus a few bonus markets you really need to know about. What’s up everyone? It’s Dave Meyer back with another episode of the BiggerPockets podcast and we’ve got a fun one today that many of you keep requesting for us to repeat. We actually did a show just like this back in August, one of the most popular ones we did last year. It featured Ashley Kehr and Henry Washington. We each picked our own market. So to do the repeat of this episode, I’ve invited Ashley and Henry back again. Ashley, good to see you.Yes, thanks so much for having meAnd fresh off your home, city of Buffalo being named the hottest housing market for Zillow in 2025,Second year running. IKnow we’re not letting you pick it because it’s too obvious right now, so we’re going to handicap you a little bit. And Henry, we already know you picked the best market of the last 10 years and live in it in northwest Arkansas, so we’re also not letting you pick thatOne. No, fair enough, fair enough.So we did this show back in August of 2024. You can go check that out In that show. We had a data download that accompanied the show and the research that Ashley Henry and I did, and we’ve done the same thing. You can go to biggerpockets.com/resources and download data for more than 300 markets in the United States. It has stuff like rent to price ratio, population growth, basically all the stuff that we’re going to be talking about today. You can grab that for free, so go check that out. In today’s episode, we’re going to pick each of our favorite markets, so I’m eager to hear what you guys have and then at the end we’re going to do two quick bonus rounds, one for the most affordable market that you like the most, which we’re going to define as a median home price of $200,000 or less. Those still do exist and it’ll be fun to see which ones you pick and we’ll do another one for big cities. I don’t know about you guys. I hear a lot that big cities are too expensive. You can invest in them, and so we’re going to challenge you both to do that. Henry, you picked two out of 300 plus markets that we provided you with some data on. How did you get it down to these two?Yeah, absolutely. When I’m looking at this dataset, what’s important to me is I want a place where the median home price is under the national average or at the national average. So that means there’s air quotes, affordability, and then the second thing I’m looking at is I want a place where the median rents are at or above the national average. That means I can buy a house for less than the average, but rent it for above the national average, and then I’m looking for positive population growth over the last five years. Something close to the normal or above doesn’t have to be crazy population growth. It just has to show me that people are continuously moving to that area and it’s not a dying city where people are moving away from it. Once I have those three data points, then I start to narrow it down a little more based on what I’m seeing in those markets.So I might remove super coastal cities or I might remove areas where the weather’s going to be extreme or extremely cold, and then I’m going to dive into what’s driving the economy in those areas. I’m also going to look at what’s the unemployment rate in the area and what is the average income of the people living there because when you get that right mix of affordable home prices with higher rents, with an economy that is growing and driving people to want to move to that place, I think it’s a great mix of finding a market where you can get some cashflow but also appreciation. I’m looking for bothTotally. If you’re going to do this type of analysis for yourself, I think it’s really helpful to just sort of narrow down to three or five markets and say, I’m going to pick one of these three to five. I’m not going to spend years pondering what is a perfect market, no such thing, and just doing what Henry said, making sure that the fundamentals are there and then picking based on where you’re going to have a good team, a place you like to go visit somewhere you have a good gut feeling about. And so that’s how I recommended. It’s not this precise science. There is art and some data research you should be doing, but there is a bit more than just looking at data. So with all of that preamble, let’s get started. Henry, I’ll start with you. What market did you pick?Yeah, I actually picked two markets, mostly because one of them I would probably invest in if my location where I currently live didn’t matter, and the other one I would invest in if I truly had to pick one to actually go buy a property in tomorrow, it would probably be this other market. SoYou cheated and did too,So I cheated and did too, right? So the markets I picked were Oklahoma City. ILove Oklahoma City.I do too. I really like Oklahoma City and Huntsville, Alabama. Good one. Were the two markets I picked why I picked Oklahoma City. It’s kind of a hidden gem of a big city. People kind of forget that it’s a thing and there’s a lot of really good economy there. It’s got great jobs in higher education because there are several universities close by. It’s got great government and military jobs. It’s got great healthcare jobs, it’s got great corporate jobs. Sonic is headquartered there and they’re spending tons of money on infrastructure and their downtown and bricktown areas. Population growth is 5.5 over the last five years, so that’s pretty solid. So that means people are still moving there. Median home price is 244,000. That’s pretty reasonable for a big city. That’sAmazing. A reference for everyone that the average across the country is about four 20, so not half, but man that is affordable by American standards.The median rent is 1523, which probably doesn’t seem super great compared to a $244,000 purchase price, but when you think about as an investor, a lot of the times you’re going to buy under market value even if you’re buying on the market and that’s the median rent. So the rents are getting higher. So that tells me that you can probably get a decent rent for a fairly inexpensive home price in the area without having to do a ton of crazy work to find the most amazing deal possible and unemployment, 2.8%.Wow. It’s basically as low as it gets,Right? So Oklahoma City I think is a great big city sleeper market where you can feel comfortable and confident investing in that market. It’s not going anywhere anytime soon. Infrastructure’s great. Jobs are great. I would pick Oklahoma City. I live about three hour drive from Oklahoma City and I’ve been there several times now. The market I would pick if my location didn’t matter is Huntsville, Alabama, you know me, I like unsexy sleeper markets. I want the things that are under the radar and people here, Alabama and sometimes they just get turned off because they think of the south and there’s nothing great going on there, but Alabama is on the come up. There’s tons of aerospace engineering jobs, defense contracting jobs. There’s tons of really smart high income earners that are moving and living in Alabama,Get a job at nasa, make like 300 grand a year and live in Huntsville and pay like $400,000 for the nicest house. You’re living a goodLife. You’re living a good life. Average home price is $338,000 there, but you’ve got a lot of high income earners. You’ve got a lot of aerospace technology, engineering jobs, companies that are moving operations to Alabama because of all of the defense contracts, because you think of these defense contractors, what they do is they get r and d money and they pretty much have to spend that RD money every year. And so you get a lot of these subsidiary companies who work with defense contractors who now go and open up offices near all these defense contracting companies to try to land some of that r and d money. So you’ve got a lot of great job opportunities, plus manufacturing is big. Auto manufacturing is big in Alabama, so you’ve got Toyota that’s got a great place there. Mazda Mercedes has a place nearby where they’re all building cars and they’re all growing and expanding their operations there. So it’s kind of a sleeper market in terms of lots of great economy where you get people with really good jobs, a lot of these people are going to rent. You got a median rent price of 1776, which is pretty good.Very patriotic too.So I really, really like Huntsville as a sleeper market. That’s probably the one I would pick if location didn’t matter to me.Well, let me just first say you are going to lose this competition for cheating and picking too, butI really like Alabama. It’s very affordable, obviously everywhere. It’s very local, but there’s some really good markets. We’ve talked a lot about Tuscaloosa being a really good cashflow market in the US and the thing I like about Huntsville in particular is that it’s northern Alabama because southern Alabama is experiencing a lot of what’s going on in Florida with insurance costs, just like going through the roof, being on the Gulf. So I mean you’re basically in Tennessee and it’s on the Tennessee border, so it’s a little insulated from those insurance shocks that I think a lot of people along the Gulf coast are seeing right now. So we need to take a quick break, but first, wanted to thank our sponsor. This week’s bigger news is brought to you by the Fundrise Flagship Fund. You can invest in private market real estate with the Fundrise flagship fund. Check it out at fundrise.com/pockets to learn more. We’ll be right back. Welcome back to the BiggerPockets podcast. We are ranking our favorite markets for 2025. Henry gave us Huntsville, Alabama and Oklahoma City. We’re moving on to Ashley. What did you pick?Well, first I want to make it clear that I did follow instructions.I’ve never been good at that, by the way.I did pick one market and Oklahoma City was on the excluded list of cities. We can’t choose. I picked Columbus, Ohio.Oh, ILike it. So I picked this one. So I looked at a couple different things as far as I definitely wanted the median price to be under 400,000 because I’m looking at this as a rookie perspective and to purchase your first investment, I would rather it be less money than more money for your first property that you’re going to buy as a rental. So I wanted it to be under that 400,000 threshold. The median rent is 1800 and then vacancy rates. Since I’m looking at rentals, I didn’t want that high. I mean, some markets had a vacancy rate of 16%, so this one’s at 6% and then the unemployment rate isn’t too bad. It is 3.3%. First of all, before even getting into those numbers, the first thing I’m narrowing down is landlord friendly states. As an investor in New York, I will never ever invest in a city that is tenant friendly again for rentals.So that would be my biggest thing and then I would kind of narrow down from there. So once I looked at the numbers of Columbus, I did some digging into what actually would make it attractive for people to live there or to move there. So Amazon actually is doing a 10 billion investment into their data center infrastructure. There’s also some kind of huge development grant that’s happening. It’s like 292 million development. It’s going to be residential units, office space, everything like that, and it’s anticipated to be completed by 2026. Then I was like, if there’s a university or a school there too, so if you ever need to pivot to college housing, that may be an option. So Ohio State is there.Yeah, Columbus is one of those markets that I feel like has just been booming. Once that CHIPS Act got announced and Intel said they were going to start manufacturing processors there, it’s just been a free for all. I actually drove there myself to see if I wanted to go invest there. It’s a very strong market. Fundamentally, my only knock against it personally was like my buy box is something that I can at least break even cashflow on, and it was hard for me to find that just because there seems to be a lot of investor activity in Columbus already.Yeah, I’ve heard a lot of people talk about it, and you’ll find it in the forums too. A lot of mentions of Columbus, Ohio,Lots of investor activity there, lots of older homes too, lots of older multifamily. So you have to take into consideration truly what your buy box is and watch out for those maintenance and capital expenses in a market with a lot of older properties.The property I’m sitting in was built in the 18 hundreds, soReally?Yeah, all about zeros, like that old idea.That is something I’ve experienced now that I do some investing in the Midwest. Henry’s, right? A lot of them are from the early 19 hundreds, late 18 hundreds, and it’s tough. You obviously don’t want to get something that is a lot of CapEx and a lot of deferred maintenance, but they’re also some of the nicest areas. Old homes are traditionally built in the most desirable areas close to downtown or close to some attractions, and they have a lot of charm, which I like, and so it’s kind of finding the balance. I personally try and look for ones that as long as the bones are good and the internal components are upgraded, no knob and tube, for example, new plumbing, that kind of stuff, I think you can still do it, but Henry’s a hundred percent right, you need to be very careful with these types of things.Yeah, it’s not a complete turnoff, I’m just saying you got to pay attention to, if you can find one where somebody’s already coming and done that work for you, that’s amazing. But I mean lots of boilers, things that aren’t normal across the rest of the country, that can be expensive if you have never dealt with them before.And one thing to do if you’re not sure about that is when you do your home inspection, ask the inspector, can you tell me one year from now, five years from now and 10 years from now, what do you think’s going to need to be replaced? And they can actually help you plan that out. Like, okay, a roof probably in five years, new furnace in 10 or whatever that may be, to help ease the navigation and figuring that out for yourself too when you’re looking at a property.Alright, well, very good choice. I think if you can find solid cash where you want to invest for appreciation only Columbus is going to be a really good one. My market that I picked, we’ll move on, is another Midwest market, not surprising. If everyone listens to me, I call myself long on the Midwest. It means I don’t think it’s going to be the highest performer next year or three years, but I think 5, 10, 20 year horizon. The Midwest has really good fundamentals, mostly based on affordability. Home prices are very expensive throughout the country and you see over time people tend to gravitate towards places that are more affordable because businesses move to places that are more affordable and they offer tax incentives. And for me, when I look at markets, job growth is number one, affordability is number two, and the Midwest has a lot of those things. So I picked what is often cited as the fastest growing population-wise market in the Midwest, which is Indianapolis, Indiana. Have you guys ever been there, spent any time there?I went to a wedding once and it was in August and it was so hot, it was outside. Everybody would go into the bathroom. They had those bathroom trailers. The only air conditioningReally, I didn’t realize Indianapolis was that hot or maybe it was just like a freak thing. That’s like a cool day where Henry is maybe just in Buffalo. You have no tolerance. Oh, I got it’s above 60 sweating. Well, I like Indianapolis, super affordable market at 270,000, but the fundamentals here that I love are just the employment growth. To me, when there’s a lot of jobs, people start moving there to that, people start getting paid more. You see an unemployment rate of just 3.6% and if you really want to get nerdy about it and look into what jobs are growing, you see it really across the board. It’s a well diversified economy, but I like seeing that one of the fastest growing industries in Indianapolis was financial activities, so banking and stuff that is pretty stable industry, high paying jobs professional and business services are going quickly. Education and health services, which are really recession resistant jobs.I really like all of that. And if you look at the Trump administration’s policies, they’re really trying to restart American manufacturing and if that happens, I think you’re going to start to see a lot more growth in the Midwest. And so that’s another reason I’m picking Indianapolis and in addition to just being manufacturing, they have huge players like Eli Lilly, one of the biggest pharmaceutical companies is based out of their Salesforce big tech company has a huge employment there. There’s racing Cummings, so there’s a lot going on there. I think similar to what Ashley said, it’s just kind of like a centralized place and it’s a very landlord friendly state, so that’s why I picked Indianapolis.Yeah, Indianapolis is a lot cooler than I thought it was going to be before I went there. The downtown area, I mean you’ve got the Lucas Oil Stadium right down the street from where the Indiana Pacers play. Eli Lilly’s office isn’t far from there either, and so you can tell there’s a lot of money being poured into the area, but there’s a lot of job diversity and job growth, lots of great infrastructure. I was really pleasantly surprised with Indianapolis,270,000 for median home price. Pretty solid. You have to imagine with all the growth going on there that that’s going to be going upSimilar there. Lots of older homes.Yeah, for sure.One thing I learned about the area is it’s some of the best golf in the country.Oh, tell me more.So many golf courses, so many Pete died design courses. There’s actually a golf course, right? There’s like nine holes of the golf course are right inside the track where they raced Indianapolis 500. SoDude, I saw, I’ve only been once and it was for a conference, but when I was flying in, I was like, is that real? You fly right over the racetrack and there’s golf holes in there. It’s soCool. Absolutely there is. Yes.Alright, well I think it’s a great market, Henry. Whenever we do our lake effect cashflow road trip, we’re stopping in. Indianapolis.Sounds great to me.Ashley, you don’t know, but now you have to come on this trip too.Oh, I remember it from last time. I was already going to invite myself. Yeah,Good. Well, no, you were always officially invited. I just figured you didn’t want to come. All right, so those are favorite markets. We are going to take a quick break, but when we come back, we’re going to do a speed round to talk about our favorite affordable markets and our favorite big cities. We’ll be right back. We’re back on the BiggerPockets podcast, me, Henry Ashley talking about our favorite markets. We’re moving on to our favorite affordable markets. We set the limit at half the median home price. Median home price in the US is about 420,000 right now, so you got to find a market 210 or less. Henry, you went first last time, so Ashley, why don’t you give us yours.Okay, so I picked Sue City and I selected this because it was under 210,000, but also it was really hard to find a market that didn’t have a really high unemployment rate, somewhere like 16% and then Sioux City was 2.7%.Holy moly, 16%. That’s higher than it was during the great recession.Yeah, there was a lot of ’em that had really high ones.Yeah, that’s serious unemployment. All right, good choice then. Henry, what do you got?I picked the same thing, Sioux City. There wasn’t a ton of options there, butOh my god, you’re suchA cheer. Median home price of one 90, but the thing to watch out for is the population’s only 144,000, so a little bit of a red flag, but vacancy 5.87%, which was pretty good unemployment, 2.7%. It was the best option of the options of an under $210,000 price point.Yeah, the vacancy rate too, I just double checked. It was actually super high on the other ones too that were 210,000 also.Well, it’s not the best because the one I picked is the best, which is Rockford, Illinois. I actually started looking at this before I started researching the show because realtor.com came out and said it would be the hottest housing market for 2025, and I started just digging into it a little bit. I wouldn’t say it’s a suburb of Chicago, it’s like 90 miles away, so I don’t know many people who would commute that far, but it’s also sort of equidistant to Milwaukee, and so there’s a good amount of industry there. The median home price is just 188,000, which is really nice. And the vacancy rate to your point was just 7.3%, which is not amazing, but not terrible. And the unemployment rate is 5.4% now, 5.4%, probably a little bit higher than normally I would choose, but I did some extra homework and started looking at the history of their unemployment rate and it was eight a couple years ago and it’s actually been steadily going down, meaning that there is strong job growth in the area.Just a little tip for people to remember that you don’t just need to look at things at a point in time, but try and look at an overall trend because if their unemployment rate has been trending down, it has been. That can be generally a good thing for an area. So that was my quick affordable market. Rockford, Illinois, we’re now going to do our second speed round, which was big cities. So basically the opposite, well, I guess it kind of turned out to be the opposite. The first one was based off price, but there aren’t a lot of big cities where you can buy for under 210,000. So this criteria, Henry, we will start with you, is over 2 million and I want to know what you pickedOver 2 million. I picked San Antonio, Texas.What do you like about it?I like San Antonio. It seemed like everybody was just having a good time in San Antonio. I don’t know what it was. Everybody was having a blast when I went to San Antonio, Texas.What were you doing there? Were youOut of bachelor party? No, no, I was speaking at a real estateEvent. Oh, nice.But it just seemed like everybody was having a great time. I went to the downtown area and walked around for a little while. It was super cool. Lots of history obviously, but 265,000 as a median hound price, which is really reasonable population of 2.6 million, but a 265,000 median home price. I thought that was hard to find, hard to come by. Plus you have unemployment at 3.9% and population growth at 7.6899999999999995% over the last five years. I just think those are pretty good numbers for a big city.I like San Antonio. I thought there’s a lot of fundamentals and I feel like people don’t realize this. It’s the eighth biggest city in the country. It’s huge. Yeah,It’s massiveCompared to, yeah, it’s really big and it’s close enough in my mind to Austin that you’re going to get a little bit of that tech money runoff going on. It’s its own city and its own right. It’s much bigger than Austin actually, but you just see a lot of investment into Austin and it’s driving distance. I think it’s under a hundred miles.Yeah, so 45 minutes.Yeah, so I think it’s a good market. It has been in a little bit of a slump like a lot of Texas and Florida, but long-term fundamentals are very strong there. Alright, big city. Ashley, what do you pick?I picked Minneapolis.Oh, interesting.So this one actually had a population of 3.6 million, but the median price was 371,000, so that wasn’t that bad. Five-year growth, 4.25% vacancy rate was a little bit higher than some of the other markets we looked at today at 4.68%, but still not awful. Then unemployment 2.7. Whoa. They are considered landlord semi friendly, so not all the way landlord friendly.There are some rent controls in Minneapolis, I think.Yeah, the last thing about them too is they’re putting a lot of money into the Mississippi River waterfront.Oh, cool.And have this big build initiative where they’re putting a lot of money into the city and the waterfront area.San Antonio already has a Riverwalk, so we’re better.There’s no potential for growth. Then you want to get in before that attraction is there.Minneapolis is one of those sneaky cities. There’s all sorts of really big companies there. Target Medtronic, there’s a lot of big companies. I’ve honestly never spent any time outside of the glorious airport, but people who live there love it too. It’s just one of those places where people really say it is a high quality of life. So I personally really investing in places with high quality of life. I think they have strong demand, especially around young people, good renters, that kind of stuff. Alright. For my big city, I picked Philadelphia, Pennsylvania. I actually started looking at this based off Reddit. I love falling Reddit and people were just talking about how Philadelphia is such a great city and when you actually dig into the numbers, it is pretty compelling. You’re starting to see, I think a resurgence in housing markets across the northeast. You’re seeing this in places in New Hampshire and Vermont.You see this in Rhode Island is one of the hottest places and Philadelphia for being a city with a ton of economic engines. The median home price is just 366,000. So trying to buy in a big city, you guys pick good ones, but it’s pretty rare to see something that cheap. The unemployment rates at 3.6%. Population growth for the Northeast is really good. It’s not amazing for the Southwest, but for a big city in the northeast, it’s really solid. Vacancy rates are low and I just hear great things again about the quality of life there, which I was just saying I lend value to that. So I picked Philadelphia.They also have four pro sports teams,LikeOne of the few cities that actually have four of them.No, that’s true.When you go there too, all of their stadiums are right together. It’s like this whole little complex thing and they’re all right there. It’s pretty cool.I never really thought about that as a metric, but it’s definitely major economic engine. Alright, well thank you both so much for doing your homework. Clearly Ashley is the winner because Henry, you’re disqualified two different times time.Now I know this is rigged because every time you say that it’s me, but Henry definitely had the better markets this time.I don’t know, I give points for following directionsOn that. I’ve never been a rule follower. I marched to my own beat.That’s why you’re an entrepreneur. But if we didn’t need to make a podcast episode, I would’ve sent you home from school today. But thank you both. This was really insightful and hopefully for everyone listening, you learned a little bit about how we take a look at markets. If you’re going to do this kind of work for yourself, my recommendation is always to look at the data. You can get it for free. Again, go to biggerpockets.com/resources, pick the criteria that really matter to you, narrow it down to three to five, and then really start working on your team and actually start analyzing deals in these markets to see if they work for you and your strategy. Because on paper things in Texas, for example, they all look great. I think Oklahoma City is another one. Looks great on paper. It is still a good market, but insurance costs are super high in Oklahoma City. So really just go in and look at the numbers and you’re going to start to see which market of the five you sort of select as your shortlist are going to work for. You are going to find the deals that you’re looking for.Also, too, on that point, Dave, if you’re going to pick a market that you actually want to get to, you might also look at where direct flights can get you to based on the markets in your direct list because you don’t want to pigeonhole yourself into a long drive if getting there is important to you.Dude, I’m getting crushed on that right now. I picked a market when I was still living in Amsterdam. Now I moved back to the States and I can’t get direct flights to the market I’m investing in. I’m like, I’m going to sell all this stuff. Yeah, man, it’s important. I hate layovers. It’s like my number one pet peeve is layovers. I don’t want to do it.The last thing I want to add is if you go to biggerpockets.com/rookie resource, we actually have a market analyzer template in there that you can use that kind of talks about all the different data points we looked at today. Things to consider when analyzing a market.Ah, great tip. Thank you so much. Thank you all so much for listening to this episode of the BiggerPockets podcast. Ashley and Henry, thanks for being here. We’ll see you for another episode in just a couple days. Thanks for listening.