With a brand-new year ahead for investors, many industry analysts are placing their bets on prime locations. The US ranks as a perennial favourite for property purchase and 2019 is bound to be no exception. With this in mind, a property expert in Forbes makes his picks for the best US real estate investments in 2019. And as has been the case for several years now, Florida property dominates the top three listings.
US real estate investment this year
Penning the article is Ingo Winzer, President of Local Market Monitor and he begins his piece with observations on the US market generally. He points out that some areas are in danger of overheating. In particular, he recommends caution in places such as San Francisco, Seattle, Miami and Denver. He then goes on to recommend 20 markets that are “good places to put your money” in 2019.
His criteria for choosing his top 20 are three-fold. He takes a look at the local economy, particularly job creation. Only those locations with a healthy employment market make the listing. He also considers demand for housing and house price rises. He picks markets that are forecast to go up by 5 to 10% this year, “not too little, not too much”. His final marker is whether property is overpriced.
His best bets for US real estate investment this year start with Orlando in Florida. The theme park capital of the Sunshine State is no stranger to top investment rankings. Nor is Jacksonville, another Florida hot spot that stands in third place. As a result, Florida takes 2 out of the 3 top best places to invest in 2019.
Why Orlando and Jacksonville make good investment
As can be seen in the graphic below, Orlando and Jacksonville are stand-out locations in all three of Winzer’s vital criteria. Employment in Orlando is particularly buoyant – the metro’s predicted job creation rate of 4.7% this year stands way ahead of the other 19. Orlando also ticks the housing demand box with a predicted 10% rise in property.
Jacksonville also delivers. Job creation will be a very healthy 3% this year. House prices are set to go up by 10%, again within the right margin of “not too little and not too much”. The price of property in Orlando and Jacksonville also compares favourably to other metros – the average for real estate in Orlando comes in at US$272,000 with Jacksonville slightly lower at US$270,000.
Along with his recommendations for the location, Winzer recommends investing sooner rather than later. “With prices climbing fast, you’ll want to move quickly in Orlando, Jacksonville, Fort Worth, Atlanta and Nashville,” he says.
Top tips for US real estate investment
If you’re looking at investing in US property this year, Winzer advises buy-to-let as one of the best bets. He points out that job creation is currently taking place mostly at the modest end of the salary spectrum. As a result, high demand for rentals will continue, but not at the top end.
He therefore suggests you look at single-family homes and apartment properties in the US in the middle range. Specifically, he advises markets within the Target Rent Range. The example for Orlando in this case would be between US$1,208 and US$1,510. The average rent in the metro area currently sits at the lower end of the scale.
He ends his article with the advice to “stay away from the sexy markets and invest for long-term stability”. All the 20 metro areas in his listing fit these criteria and make good candidates for US real estate investment this year. As he says, “even with interest rates inching up, investing in US real estate – and especially in rentals – will be a good move in 2019”.