Shrewd real estate investors are looking to 2018 as a year in which several so-called “secondary” cities feature minimal risk as well as exceptional return potential, an ideal combination in any investment opportunity.
While major cities across the United States — such as New York on the East Coast and San Francisco on the West Coast — continue to post record numbers while drawing increased interest from international and domestic investors alike, there is ample evidence suggesting investments in a secondary city will yield a greater return along with minimal risk.
As secondary cities continue to attract new residents with booming job markets and exceptional living costs, expert analyses continue to identify cities that top out around 3 million total residents as featuring the conditions necessary for a robust return on an investment in real estate. These cities appeal to a broad section of the population, particularly those seeking a tangible sense of community as well as all the benefits of big-city living.
In rankings of the best real estate investment markets nationwide, major markets like Los Angeles and Boston are now being joined by secondary cities such as Austin and Salt Lake City. Of course, the performance of any real estate investment is conditional on a wide range of factors that go well beyond population density.
When it comes to a real estate investment in a secondary city, the success of the investment hinges on several key issues: cost of living and quality of life; indicators of economic strength such as job creation and growth; a quality education system; and sound local infrastructure. As it stands now, a growing number of secondary cities feature the conditions necessary to yield a substantial return on investment.
In addition to cities like Austin and Salt Lake City, several cities from the Carolinas to the Pacific Northwest are poised to perform exceptionally well for real estate investors. In North Carolina, investors are expected to yield substantial returns on properties in Charlotte and Raleigh/Durham. Farther south, Charleston, South Carolina, and Orlando, Florida, provide the kind of opportunities shrewd investors typically seek.
In Texas, the Dallas-Forth Worth area joins Austin among secondary cities expected to perform well for real estate investors, but it is Seattle that has piqued the greatest amount of interest from real estate experts. In fact, in an annual survey published in Emerging Trends in Real Estate, it was Seattle that earned the top ranking for providing the best prospects for investment and development in the year that follows.