If you’re looking to supplement your income or add to your retirement nest egg, you might want to consider investing in a condo for rental income.
However, how good of an investment your condo depends largely on where you buy it, a new GOBankingRates study found. Keep reading to find out if owning a condo is right for you.
To find the best cities to own investment property, the study examined the 100 most populous U.S. cities based on Census estimates and ranked them on three factors: condo home value growth, increase in rental list prices for condos and co-ops in each city, and annual rental yield. The cities received a score for each of the three factors, and the 20 cities with the best overall scores were determined to be the best cities to own a condo for rental income.
Although the cities were pretty spread out geographically, Arizona and Florida are each home to three of the top 20 cities, and Georgia and Texas are each home to two of the top 20 cities. A few of the cities included in the top 20 are also places where home values are skyrocketing — Saint Petersburg, Fla., Orlando, Fla., and Atlanta — so perspective real estate investors might want to consider condos if houses are too expensive.
Most of the states that are home to the top cities to invest in a condo are also states where it’s cheaper to own a home than to rent, according to a separate GOBankingRates study, which is not surprising. However, Arizona and Colorado are both states where it’s generally more expensive to own than to rent, and both appear on the list.
Here is the complete ranking of best cities to own a condo for rental income:
1. Saint Petersburg, Fla.
2. Oklahoma City
4. Providence, R.I.
5. Tuscon, Ariz.
6. Milwaukee, Wis.
7. Columbus, Ohio
8. Jacksonville, Fla.
9. Orlando, Fla.
13. Charlotte, N.C.
14. Marietta, Ga.
15. Memphis, Tenn.
16. Glendale, Ariz.
17. Sacramento, Calif.
18. San Antonio
19. Richmond, Va.
20. Colorado Springs, Colo.
Click through to get five essential tips for buying investment property.
Methodology: GOBankingRates analyzed 100 of the most populous U.S. cities based on Census 2016 estimates and looked at the following factors: condo home value growth, rent growth and rental yield (sourced from Zillow). Each factor was given a score and weighted to produce a final ranking.