Deciding to buy rental property is a big step, but you’re not done yet. The next decision will shape your entire journey and experience as a landlord: the choice of where to buy rental property. CoStar Analytics recently developed a momentum index to rank the cities that have gained the most ground that we combined with current rent prices and vacancy rates to come up with the best cities for buying rental property.
These are the best cities for buying rental property:
- Jacksonville, FL
- Atlanta, GA
- Tampa, FL
- Raleigh, NC
- San Francisco, CA
- Seattle, WA
- Minneapolis, MN
- Orlando, FL
- San Jose, CA
- Philadelphia, PA
Buying Rental Property: What to Consider
Investing in rental property should be one that is ultimately profitable and sustainable. Knowing where to buy is a huge contributing factor when solidifying your decision. There are key considerations you should think about before investing, such as:
- Market conditions
- Rent and ROI
- Taxes
- Location
Now that you know what to consider, explore these top places to buy rental property.
Jacksonville, FL
- Population: 1,768,788
- Average Rent: $1,304/month
- Vacancy Rate: 12.3%
- Median Home Price: $310,000
- Monthly Mortgage: $1,620/month
Jacksonville is at the top of the list because of a large increase in demand and population growth. Job opportunities are popping up every day as Jacksonville’s low cost of doing business attracts many companies to the area. The city has a diverse economy with major sectors of health, biomedical, finance, transportation, logistics, and defense.
Many people want to move to Florida, but the high prices in some cities pose a barrier. However, Jacksonville is one of the cities in Florida with more affordable rent prices and a good quality of life, so it has experienced a huge population boom. The affordable home prices mean you can invest in a city with potential without having to spend a lot of money.
Atlanta, GA
- Population: 6,410,407
- Average Rent: $1,619/month
- Vacancy Rate: 12.3%
- Median Home Price: $420,000
- Monthly Mortgage: $2,190/month
In recent years, Atlanta has seen a large population growth because of new residents coming to seek affordability, quality of life, and jobs. Office relocations, new offices opening, and a growing tech presence have created new job opportunities, leading to professionals following them.
Atlanta was also named in the Emerging Trends in Real Estate 2025 by PwC and the Urban Land Institute as number seven on the top U.S. markets to watch. Strong renter demand because of proximity to urban amenities and employment has pushed Atlanta to be one of the best cities for buying rental property.
Tampa, FL
- Population: 3,437,390
- Average Rent: $1,659/month
- Vacancy Rate: 9.4%
- Median Home Price: $475,000
- Monthly Mortgage: $2,480/month
Renter demand has been at a historic high in Tampa because of the thriving economy and beautiful climate. The Emerging Trends in Real Estate 2025 ranked it as number four on the top U.S. markets to watch.
It isn’t hard to see the appeal of the city with its sunny weather, entertainment, and energetic lifestyle. Better affordability compared to South Florida has pulled in many companies, and those seeking work have followed.
Raleigh, NC
- Population: 1,569,524
- Average Rent: $1,405/month
- Vacancy Rate: 12.3%
- Median Home Price: $475,000
- Monthly Mortgage: $2,480/month
Raleigh has experienced demand from renters that it has never seen before. People move to the city because of a healthy economy, jobs, affordability, and quality of life. Colleges and universities near the city lead to students moving to the area and graduates entering the workforce. A low cost of business attracts companies and creates new jobs.
Since Raleigh primarily consists of suburbs (like Cary and Morrisville), the best places to invest in rental property are found there. The rents in the suburbs are typically higher than in Downtown Raleigh, illustrating the renter desire for space and a relaxed lifestyle. However, activity is picking up in Downtown Raleigh, signifying that city living is still going strong.
San Francisco, CA
- Population: 1,575,755
- Average Rent: $3,032/month
- Vacancy Rate: 5.1%
- Median Home Price: $1,325,000
- Monthly Mortgage: $6,920/month
AI is revitalizing the tech city of San Francisco, drawing people in from all over. Bolstering this population growth is the improvements the City of San Francisco has been making to address key issues and complaints from residents.
High mortgage rates and home prices have pushed residents to rent instead of owning, so there is always a lot of demand. The revitalization of the economy and population growth in combination with the renter-centric nature of the city have shot San Francisco up the list of the top cities to buy rental property.
Seattle, WA
- Population: 4,160,916
- Average Rent: $2,121/month
- Vacancy Rate: 6.9%
- Median Home Price: $849,000
- Monthly Mortgage: $4,430/month
Demand for rentals has grown in Seattle as people return to the office. These mandates have rejuvenated urban neighborhoods like Downtown Seattle, Lake Union, and Capitol Hill as renters want to be close to work.
Outlying areas, like the suburbs and Tacoma, have also seen an increase in interest because they are more affordable. The desire for easy access to work is just as important to renters in these areas as many look for nearby transit access.
Minneapolis, MN
- Population: 3,779,742
- Average Rent: $1,389/month
- Vacancy Rate: 6.8%
- Median Home Price: $335,000
- Monthly Mortgage: $1,750/month
Minneapolis has seen a rise in demand and population as it becomes increasingly popular among both landlords and renters. The growth is backed up by a strong economy and job market that makes the city a great place to set down roots.
Both the suburbs and Downtown Minneapolis are where renters are searching, so you can’t go wrong with where you buy. Renters valuing walkable and safe neighborhoods, affordable prices, and space tend to gravitate to the suburbs. Those looking for proximity to entertainment and city life prefer to live downtown.
Orlando, FL
- Population: 2,956,091
- Average Rent: $1,599/month
- Vacancy Rate: 10%
- Median Home Price: $416,000
- Monthly Mortgage: $2,170/month
With Orlando’s growing, diversified economy, the renter demand is at an all-time high. People move to the city for job opportunities but also for the plentiful entertainment found in the theme parks. At number six, Orlando came in one spot ahead of Atlanta on the U.S. markets to watch.
San Jose, CA
- Population: 2,000,508
- Average Rent: $2,661/month
- Vacancy Rate: 5.5%
- Median Home Price: $1,388,888
- Monthly Mortgage: $7,250/month
Driven by the tech market and surge of AI, San Jose has continued to see explosive growth in the recent years. Apartments are getting snatched up by renters in the blink of an eye; especially since home prices are expensive. Location is everything in San Jose and renters are willing to pay higher rent to be close to work or transit options.
Philadelphia, PA
- Population: 6,338,086
- Average Rent: $1,749/month
- Vacancy Rate: 7.4%
- Median Home Price: $275,000
- Monthly Mortgage: $1,440/month
Lowering inflation, high employment, and plentiful rental options have caused a spike in demand and population growth in Philadelphia. The growth is strongest in the suburbs as people move from neighboring cities and states. Downtown areas, such as City Center, have seen population growth, particularly from younger generations who seek employment opportunities and urban amenities.
Comparison of Top U.S. Cities for Buying Rental Property
|
|
Population |
Average Rent |
Vacancy Rate |
Median Home Price |
Monthly Mortgage |
|
Jacksonville, FL |
1,768,788 |
$1,304/month |
12.3% |
$310,000 |
$1,620/month |
|
Atlanta, GA |
6,410,407 |
$1,619/month |
12.3% |
$420,000 |
$2,190/month |
|
Tampa, FL |
3,437,390 |
$1,659/month |
9.4% |
$475,000 |
$2,480/month |
|
Raleigh, NC |
1,569,524 |
$1,405/month |
12.3% |
$475,000 |
$2,480/month |
|
San Francisco, CA |
1,575,755 |
$3,032/month |
5.1% |
$1,325,000 |
$6,920/month |
|
Seattle, WA |
4,160,916 |
$2,121/month |
6.9% |
$849,000 |
$4,430/month |
|
Minneapolis, MN |
3,779,742 |
$1,389/month |
6.8% |
$335,000 |
$1,750/month |
|
Orlando, FL |
2,956,091 |
$1,599/month |
10% |
$416,000 |
$2,170/month |
|
San Jose, CA |
2,000,508 |
$2,661/month |
5.5% |
$1,388,888 |
$7,250/month |
|
Philadelphia, PA |
6,338,086 |
$1,749/month |
7.4% |
$275,000 |
$1,440/month |
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Methodology
The top U.S. cities for buying rental property were compiled by CoStar Analytics using their new momentum index ranking. Rent trends and other data were gathered from Apartments.com and CoStar on June 24, 2025.
The information provided in this article is for educational and informational purposes only and does not constitute financial, legal, or real estate advice. Before making any financial or legal decisions related to rental property, please consult with a licensed real estate attorney, financial advisor, or other qualified professional.
This article was originally written on September 12, 2019.
FAQ
How do you buy rental property?
Buying a rental property may seem complicated but when you break it down, it is achievable for anyone interested. Do your research on location, find a property, finance the property, and sign a lease with a tenant, then you’re a landlord.
How much monthly profit should you make on rental property?
Sadly, there is no magic formula for how much you should charge for rent. To figure it out, you need to consider your particular situation, including:
- Market demand and trends
- Compare similar properties
- Consider your property condition, location, and amenities
- Your budget
