Move over house hacking — “rentvesting” is the current trending homeownership practice.
Suncorp Bank sums up the concept as “a home-owning strategy where you rent a property to live in that’s right for your lifestyle, while you own an investment property that’s right for your budget.”
For You: I’m a Real Estate Investor: 10 Places I Would Never Buy Property
Read Next: Become a Real Estate Investor for Just $1K Using This Bezos-Backed Startup
By renting in a more expensive area where they want to live but can’t afford to buy, and buying a rental investment property in a more budget-friendly part of town, rentvestors get the best of both worlds. They enjoy the benefits of homeownership without the budget, location or lifestyle constraints while collecting enough rental income to offset their housing costs.
The key is picking the right place to put your plan into action. Here are four cities to consider rentvesting in, using average home values from Zillow.
Also, check out these real estate investment tips.
Wealthy people know the best money secrets. Learn how to copy them.
Austin, Texas
With an average home value of $548,654, the trendy, artsy and economically vibrant Austin has priced out many prospective buyers — this is precisely why rentvestors should consider it.
“Austin is a fantastic spot for rentvesting,” said Martin Boonzaayer of The Trusted Home Buyer. “The city’s tech industry is on fire, bringing in a constant stream of young professionals and families. The housing market is still accessible, with plenty of opportunities for property appreciation. With high rental demand driven by newcomers looking for jobs and a great lifestyle, Austin is a prime place to invest.”
A savvy rentvestor might buy a property in West University, where the average home value is less than $335,000. Meanwhile, the value in Zilker, Old West Austin or Barton Hills is closer to $1 million.
Learn More: Cheapest Places To Buy a Home in Every State
Tampa, Florida
Many aspiring investors dream of owning a rental property in the beautiful, culturally unique and centrally located Tampa Bay region, but with an average home value of $386,957, an investment in Tampa is out of reach for most — but not for clever rentvestors.
“Tampa is a great market for investment properties,” said Boonzaayer. “The housing is affordable and the job market is robust, with growing sectors in finance, healthcare and tourism. The city attracts a diverse group of renters, from retirees to young professionals, which keeps rental demand high. Tampa offers a great mix of rental income and long-term property appreciation potential.”
Rentvestors might consider buying in College Hill, Historic Ybor or North Ybor, where the average home value is in the high $200,000s. Renting in posher Ridgewood Park, though, is closer to $600,000.
Nashville, Tennessee
With an average home value of nearly $445,000, Nashville’s days as a low-cost alternative to expensive coastal city life are in the past; however, that’s the sound of opportunity knocking for rentvestors.
“The city’s economy is booming, with strong growth in healthcare, education and entertainment,” said Boonzaayer. “People are flocking here, which keeps the rental market hot. Housing prices are on the rise, but there are still good deals to be found that offer solid returns.”
Consider buying in a neighborhood like Elizabeth Park, where the average home costs approximately $386,000, and renting in an area like Salemtown, where the average is nearly $800,000.
Raleigh, North Carolina
Like the other cities on this list, homes in Raleigh are typically more expensive than the national average of $360,681. The property value there is over $448,000. Just like the others, though, that fact bodes well for rentvestors.
“Raleigh is a fantastic city for investing in rental properties,” said Boonzaayer. “It’s part of the booming Research Triangle, known for its tech and research industries. The population is growing fast, leading to a high demand for rental housing. With relatively affordable property prices and strong potential for appreciation, Raleigh is a solid bet for rentvesting.”
There is certainly have a broad spectrum to choose from. For example, the average property value in East Raleigh is around $421,000, and it’s over $1.2 million in Glenwood.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: 4 Best Places To Buy Investment Property If You Are Considering ‘Rentvesting’
