Which are the best cities to invest in real estate (2025)?

Property investment offers long-term rewards, even in challenging markets. However, you have to prioritize understanding the unique characteristics of each area before investing. So, what are the best cities to invest in real estate, 2025? Let’s find out. 

Keep in mind that while rising interest rates can deter investors by increasing financing costs, they can also lead to higher rents. According to many experts, that’s the reason this year is potentially advantageous for real estate investment.

How are the best cities to invest in real estate, in 2025, rated?

Regardless of location, real estate principles are consistent: investors seek rental properties with the highest return on initial investment. To maximize returns, you should consider three key factors: high rental demand, high rental income, and a low tenant default rate. These factors typically ensure profitable investments.

Additionally, factors such as population growth, job growth, and median home prices significantly impact the profitability of investment properties. While population and job growth aren’t directly related to the housing market, they greatly influence real estate potential. 

And, why are home prices rising so much? In the United States, the housing market shows diverse changes in property prices nationwide. The strong demand for single-family homes largely fuels the overall price increase. However, this trend varies regionally, creating a dynamic situation. Some states and cities witness significant rises in property prices, while others face declines.

Let’s look at some of the best cities to invest in real estate this year. Keep in mind that the list is in no particular order – either ascending or descending. On your part, it’s important to conduct thorough due diligence and research on any real estate investment before proceeding. 

Tampa, Florida

Despite having slightly larger than national average housing prices, Tampa’s standout feature is its remarkable growth. Over the past year, home prices in Tampa have surged by approximately 27.7%, while the population has seen a modest increase of 1.4%. Additionally, rental prices have spiked by an impressive 39%, far surpassing national averages. These exceptional growth rates solidify Tampa’s position as one of the top destinations for real estate investments in 2025.

Austin, Texas

Over the past decade, the Austin real estate market has witnessed a significant surge, with housing prices nearly doubling. This surge is complemented by substantial population growth. Austin is the leading city in the United States for population expansion. Moreover, the influx of tech companies from Silicon Valley, coupled with the city’s affordable housing and rental rates, has further fueled its growth. With a low unemployment rate of 4.2% and a booming job market, Austin offers promising opportunities for real estate investors.

Athens, Georgia 

This city offers promising prospects for property investment. Despite being well below the national average, property values are steadily increasing. In September last year, the median home sold price rose to $328,265, marking a 9.3% increase from the previous year. Despite tough market conditions, home sales surged, with almost 30% of sales exceeding the asking price. With its vibrant cultural scene and large student population from the University of Georgia, Athens is a hotspot for affordable housing, particularly around the central campus.

Charlotte, North Carolina

Charlotte’s real estate market has experienced a respectable 16.4% increase over the past year. The reasons are substantial population growth and job expansion. Additionally, the city’s colleges and universities contribute to a vibrant and youthful workforce. Despite the continuous growth in population and job opportunities, Charlotte remains relatively affordable, with median home prices and rental rates below the national average. These factors make Charlotte an attractive destination for those seeking both affordable housing and flourishing job markets.

Savannah, Georgia

The city boasts a strong and diverse economy fueled by tourism and the bustling Port of Savannah. Its historic charm, showcased in neighborhoods such as the Historic District and Ardsley Park, attracts investors interested in vacation rental properties. Despite being a seller’s market, Savannah offers diverse housing options, from upscale residences to homes needing restoration.

Richmond, VA

Richmond is a prime choice for investors near D.C. With a growing population, affordable living costs, and excellent schools, the city’s real estate market is thriving. Home prices average around $330,061, with property values increasing by 2.2% over the past year. Despite higher prices, renters in Richmond can still afford to live here, thanks to a strong job market focused on education, health services, construction, and professional industries.

Birmingham, Alabama 

Once solely known as a manufacturing hub, Birmingham has transformed into one of the highest appreciating cities in the nation. Despite the national downturn, Birmingham’s real estate market has maintained strong performance, with property appreciation rates outpacing most other markets in the US. Furthermore, the city offers unique affordability, with median home prices and rental rates well below national averages. Birmingham’s recent revitalization, coupled with a burgeoning job market in industries such as publishing, medical research, banking, construction, and technology, further cements its position as a top real estate investment destination.

Raleigh, North Carolina

As a member of the renowned Research Triangle, Raleigh boasts a plethora of tech jobs and opportunities. With approximately 43% of residents opting to rent, well above the national average, Raleigh serves as a lucrative hub for rental investments. Additionally, Raleigh’s low unemployment rate and above-average annual income make it an enticing prospect for those wanting to buy real estate in 2025.

Las Vegas, Nevada

Despite the relatively high median home prices, Las Vegas offers substantial appreciation rates, with home prices appreciating by approximately 75% over the past five years. The city’s rental market also presents promising opportunities, with low vacancy rates and favorable rent-to-income ratios. Moreover, the increasing number of businesses in Las Vegas further contributes to the city’s robust economy and growing housing market.

Waco, Texas

The city is experiencing a real estate boom with home prices appreciating by 96% in the last five years. The city’s development plan emphasizes mixed-use communities, driving demand for rental properties. With its affordable housing market and robust rental yield, Waco presents lucrative opportunities for those looking to invest in real estate. 

Dallas, Texas

Dallas in Texas is another promising real estate investment city for 2025. With a strong availability of housing stock and high rental rates, Dallas presents an accessible market for investors. The city’s rapid job and population growth, coupled with its relative affordability, make it highly appealing. Additionally, Dallas’s emergence as a destination for large tech companies seeking affordable real estate further enhances its investment potential.

Oshkosh, Wisconsin

The city, situated on Lake Winnebago, boasts a strong economy driven by manufacturing and education. With an average home price of $222,366, Oshkosh offers affordable housing options. Moreover, it attracts students from the University of Wisconsin-Oshkosh and vacationers from nearby cities.

Phoenix, Arizona

As the fifth-largest city in the United States, Phoenix boasts one of the fastest-growing economies, accompanied by robust housing market growth and population expansion. The city’s substantial home value appreciation, affordability, and steady economic growth contribute to its attractiveness for real estate investors.

Lakeland, Florida

Nestled between Tampa and Orlando, the city appeals to families and retirees alike. Despite market challenges, the median home listing price increased by 5% last year. With its strategic location and robust returns, Lakeland’s real estate market remains attractive to investors.

Columbus, Ohio

With a relatively low cost of living and a diverse population, Columbus has become a sought-after destination for young families and investors. The city’s low home values and rent-to-income ratios make investments in Columbus highly promising. Additionally, steady population growth and increasing home prices further bolster the city’s housing market.

Seattle, Washington

The city’s thriving tech sector, led by companies such as Amazon and Microsoft, has led to significant population growth and economic prosperity. Over the past five years, housing prices have doubled, growing twice as fast as the national average since 2016. With a current median listing price of $794,100 and a 5.9% year-over-year increase, Seattle offers a reliable and profitable investment opportunity. 

Orlando, Florida

Known for its tourist attractions, Orlando is also experiencing rapid population growth, with an average of 1,000 new residents each week. With a significant portion of residents opting to rent, Orlando’s rental market continues to grow. Moreover, the city’s soaring home prices and forecasted growth further solidify its position as one of the fastest-growing cities in America and a top real estate investment destination.

Durham, North Carolina

Known as the “City of Medicine,” the place attracts residents with its booming economy and mild climate. Despite low inventory, Durham’s real estate market remains hot, with homes selling for 1.2% more than the previous year.

Nashua, New Hampshire

Due to the high cost of living driven by Boston’s strong job market, many middle-class individuals are finding it difficult to afford properties in eastern Massachusetts. As a result, there has been a significant migration to southern New Hampshire, particularly in areas such as Nashua. In Nashua, houses are available at much more affordable prices compared to Boston, allowing people to get more for their money. Southern New Hampshire’s real estate market is booming, and experts predict substantial gains in property values over the next decade, ranging from 25% to 50%.

Denver, Colorado

This metro area has seen a big increase in population lately, mainly because of growing job opportunities and its beautiful natural surroundings. Also, it’s a popular choice for weekend getaways. Last year, the median listing price for homes in Denver was $565,000, showing a yearly increase of 6.6%.

Denver remains attractive to homebuyers and investors also because of its proximity to major cities such as Boulder, Fort Collins, and Colorado Springs. 

El Paso, Texas

Known for its young population and vibrant culture, El Paso offers affordable living with a cost of housing 30% below the national average. The city’s proximity to the Mexican border stimulates international trade and contributes to its economic growth.

Best cities to buy real estate: Key takeaway

Investing in real estate is a popular method to increase your wealth and protect against inflation in the ever-growing market. By following the right steps, you can capitalize on this opportunity. 

Keep in mind that identifying a promising location involves understanding local housing market trends, gross rental yield, housing price fluctuations, vacancy rates, local economic growth, and demand. Remember that real estate investing may be costly but is profitable when done correctly. It’s best to consult with a financial or real estate expert before diving into the investment game. Especially, if you’re new to the field.

Written by Ramona Sinha. June 16, 2025

Ramona is the Senior Content Writer for Kukun. This experienced blogger uses simple and succinct words to decipher the complex phenomenon called life. She has written articles covering a broad range of topics, such as real estate, lending and mortgage, finance, business, taxation, home designs, home improvement projects, decor concepts, and more. An avid traveler, she’s a digital nomad at heart and an animal lover from the depth of her soul.