Airdeed analyzed over 1300 long-term rental properties for sale to determine the most profitable income options for real estate investors. This report is focused on long-term rentals and not Airbnb properties. After gathering data from multiple listing services, we excluded any property with less than a 10% gross revenue to list price ratio. The top ten states for long-term rental investment properties are Ohio, Michigan, Alabama, Florida, Texas, Louisiana, Georgia, Illinois, Tennessee, and Missouri. Ohio investment properties took the top spot, with over 90 gross returns of over 10%. Michigan, Alabama, and Florida have numerous real property investment opportunities with impressive gross revenue to list price ratios.

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How Airdeed Analyzed The Rental Property Investment Data

You might wonder how Airdeed analyzed over 1300 long-term rental properties for sale to determine the most profitable options. We started by gathering data from our access to the multiple listing service and then sanitizing it to ensure it was accurate and complete. We then excluded properties with less than 10% gross revenue to list price, as we wanted to focus on the most lucrative states and cities. We also included all property types, including apartment units, condos, single-family homes, and even multi-family units.

After choosing our variables, we used statistical analysis and manual techniques to identify the top cities and states for long-term rental investment properties. Our research has important implications for real estate investors, and we hope it will inform future research directions in this field.

Best States for Long-Term Rental Properties

If you’re considering investing in a long-term rental property, the best states for investment properties are Ohio, Michigan, Alabama, Florida, Texas, Louisiana, Georgia, Illinois, Tennessee, and Missouri. These top states have consistently shown high returns on real estate investment, encompassing over 76% of analyzed rentals returning over 10% gross revenue to list price for great rate of return (ROI).

1. Ohio

In Ohio, with low cost of living, great rental properties offer impressive gross revenue to list price ratios. Ohio ranks top on our list with 91 rentals exceeding a 10% gross revenue to list price ratio, which equates to over 16% of properties qualifying for further evaluation. The cities of Cleveland, Detroit, and Akron are top-rated for investors.

2. Michigan

Michigan is an excellent state for rental property investment; we rank it second with 53 rentals with a gross revenue-to-list price ratio of over 10%. This is equivalent to more than 9% of the properties that qualify for further evaluation. Popular cities for rental properties in Michigan include Chicago, Muskegon, and Saginaw.

3. Alabama

With the second lowest property tax rate in the U.S., Alabama offers many investment properties for purchase with impressive gross revenue to list price ratios. Alabama ranks third on our list, with 50 rentals exceeding a 10% gross revenue to list price ratio, which equates to over 9% of properties qualifying for further evaluation. The cities of Birmingham, Dothan, and Mobile are top-rated for investors.

4. Florida

As the fastest growing population of any state, Florida offers numerous investor properties with impressive gross revenue to list price ratios. Florida rental properties rank fourth on our list, with 45 rentals exceeding a 10% gross revenue-to-list price ratio, which equates to over 8% of properties qualifying for further evaluation. Jacksonville, Miami, and Lakeland are top-rated for investors due to not having a state income tax.

5. Texas

Texas, like Florida, has seen sizeable economic growth over the past few years and is an excellent state for rental property investment, we rank it fifth with 42 rentals with a gross revenue-to-list price ratio of over 10%. This is equivalent to more than 7% of the properties that qualify for further evaluation. Popular cities for rental homes in Texas include Dallas, Lubbock, and Wichita Falls.

6. Louisiana

In Louisiana, numerous rental properties offer impressive gross revenue to list price ratios. Louisiana ranks sixth our list, with 35 rentals exceeding a 10% gross revenue-to-list price ratio, which equates to over 6% of properties qualifying for further evaluation. The cities of Lake Charles, Shreveport, and Marrero are top-rated for investors.

7. Georgia

Georgia is an excellent state for rental property investment, we rank it seventh with 35 rentals with a gross revenue-to-list price ratio of over 10%. This is equivalent to more than 6% of the properties that qualify for further evaluation. Popular cities for rental properties in Georgia include Atlanta, Macon, and Augusta.

8. Illinois

In Illinois, numerous rental properties offer impressive gross revenue to list price ratios. Illinois ranks eighth our list with 25 rentals exceeding a 10% gross revenue-to list price ratio, which equates to over 4% of properties qualifying for further evaluation. The cities of Chicago, Peoria and Urbana are top-rated for investors.

9. Tennessee

Tennessee is an excellent state for rental property investment with a strong economy, we rank it ninth with 22 rentals with a gross revenue-to-list price ratio of over 10%. This is equivalent to more than 4% of the properties that qualify for further evaluation. Popular cities for rental properties in Tennessee include Memphis, Chattanooga and Jackson.

10. Missouri

In Missouri, numerous rental properties offer impressive gross revenue to list price ratios. Missouri ranks tenth with 20 rentals exceeding a 10% gross revenue to list price ratio, equating to over 3% of properties qualifying for further evaluation. The cities of St Louis, Kansas City, and Jennings are top-rated for investors.

Best Cities for Invest In Real Estate Property

If you’re interested in investing in long-term rental properties, you might want to consider the top ten cities with the highest gross revenue returns. These cities include Cleveland, Detroit, Birmingham, Memphis, St Louis, Dallas, Lubbock, Akron, Lake Charles, and Milwaukee. With 59 rental properties that exceed 15% gross return, these cities can offer a great opportunity for making a steady profit.

1. Cleveland

Cleveland’s rental market has emerged as the top performer in our rankings, boasting an impressive 37 rental properties that have generated gross revenue of over 10% compared to their list price. This figure translates to around 6% of the properties eligible for further evaluation. Remarkably, the highest gross revenue to list price ratio recorded in the city was an impressive 28%. In addition, Cleveland also featured 15 rental properties delivering a return of 15% or more. These findings make Cleveland an attractive destination for real estate investors seeking lucrative rental opportunities.

2. Detroit

Detroit secures the second position with 34 rentals generating over 10% gross revenue to list price. This translates to an impressive 6% of properties meeting the revenue threshold and warranting further evaluation. Notably, some properties’ gross revenue-to-list price ratio was as high as 29%. Furthermore, the city boasts 26 rental properties that offer a return of 15% or more. This makes Detroit an inviting destination for real estate investors seeking lucrative rental opportunities.

3. Birmingham

Birmingham’s rental market came in third in our rankings, boasting an impressive 20 rental properties that have generated gross revenue of over 10% compared to their list price. This figure translates to around 3% of the properties eligible for further evaluation. Remarkably, the highest gross revenue to list price ratio recorded in the city was an impressive 16%. In addition, Birmingham only featured 1 rental property delivering a return of 15% or more. These findings make Birmingham a great destination for real estate investors seeking lucrative rental opportunities.

4. Memphis

Memphis secures the fourth position with 18 rentals generating over 10% gross revenue to list price. This translates to an impressive 2% of properties meeting the revenue threshold and warranting further evaluation. Notably, some properties’ gross revenue-to-list price ratio was as high as 19%. Furthermore, the city only has 1 rental property that offer a return of 15% or more. This makes Memphis a tempting location for real estate investors seeking lucrative rental opportunities.

5. St Louis

St Louis’s rental market came in fifth in our rankings, boasting an impressive 14 rental properties that have generated gross revenue of over 10% compared to their list price. This figure translates to around 2% of the properties eligible for further evaluation. Remarkably, the highest gross revenue to list price ratio recorded in the city was an impressive 20%. In addition, St Louis features 4 rental properties delivering a return of 15% or more. These findings make St Louis a great destination for real estate investors seeking high-return rental opportunities.

6. Dallas

Dallas secures the sixth position with 13 rentals generating over 10% gross revenue to list price. This translates to an impressive 2% of properties meeting the revenue threshold and warranting further evaluation. Notably, some properties’ gross revenue-to-list price ratio was as high as 14%. This makes Dallas an option for real estate investors wanting to invest in Texas.

7. Lubbock

Lubbock’s rental market came in seventh in our rankings, boasting an impressive 13 rental properties that have generated gross revenue of over 10% compared to their list price. This figure translates to around 2% of the properties eligible for further evaluation. Remarkably, the highest gross revenue to list price ratio recorded in the city was an impressive 13%.

8. Akron

Akron secures the eighth position with 12 rentals generating over 10% gross revenue to list price. This translates to an impressive 2% of properties meeting the revenue threshold and warranting further evaluation. Notably, some properties’ gross revenue-to-list price ratio was as high as 18%. In addition, Akron features 4 rental properties delivering a return of 15% or more. These results make Akron a great destination for real estate investors seeking high-return rental opportunities.

9. Lake Charles

Lake Charles secures the ninth position with 10 rentals generating over 10% gross revenue to list price. This translates to over 1% of properties meeting the revenue threshold and warranting further evaluation. Notably, some properties’ gross revenue-to-list price ratio was as high as 17%. In addition, Lake Charles features 5 rental properties delivering a return of 15% or more. These results make Lake Charles a good location for real estate investors looking around the gulf coast.

10. Milwaukee

Milwaukee secures the tenth position with 10 rentals generating over 10% gross revenue to list price. This translates to over 1% of properties meeting the revenue threshold and warranting further evaluation. Notably, some properties’ gross revenue-to-list price ratio was as high as 23%. In addition, Milwaukee features 3 rental properties delivering a return of 15% or more. These results make Milwaukee a perfect destination for real estate investors seeking rental opportunities.

Purchasing Investment Property Checklist

• Determine your budget and get pre-approved for a real estate rental mortgage if not a cash buyer.
• Research neighborhoods and locations that meet your needs, preferences, and economic trends.
• Ensure comps show rental can be profitable.
• Ensure supply and demand in the area is positive and that housing supply is good for rentals.
• Check the home’s condition, including the roof, foundation, electrical and plumbing systems, and appliances.
• Hire a home inspector to ensure no significant issues with the property.
• Get a Real estate appraisal to understand the market value if getting a mortgage on the house.
• Review any additional costs associated with the home, such as property taxes, HOA fees, closing costs, property management, and maintenance expenses.
• Consider the resale value of the real estate and the potential for appreciation.
• Make an offer and negotiate the price and terms of the sale.
• Close on the deal

Expenses For Rental Investment Properties