10 Best Cities to Invest in Real Estate if You're a Millennial

It’s an undeniable truth -- millennials need to be creative and adaptable when it comes to generating wealth. With much of the generation entering the workforce in a weak economy at more stagnant wages than prior generations, millennials know the value of diversifying your cash flow among several streams of income.

Real Estate Investing
Real estate investing is an ever-more popular way to make passive income with little effort or energy on your part. Earning extra cash can be as easy as purchasing a single-family rental. See guaranteed monthly returns in the form of rents paid by tenants. But which areas should you look to invest in? Well, cities and real estate markets can be measured by a number of variables, so it depends on what is most important to you as an investor.

We used the Emerging Trends in Real Estate 2020 report from the Urban Land Institute and Pricewater Cooper to analyze the top places for millennial real estate investors to buy in. Whether you’re looking for a well-rounded market or the most potential for growth, find a market well-suited to your money goals, investment desires and unique financial situation.

Best Overall Markets

Austin, Texas

Both population growth and development have exploded in this mid-sized market over the past few years. Keep your eye out for apartment buildings and single-family rentals. The collectivist identity of millennials and Gen Z means co-living spaces will continue to be popular. Rising housing prices also means renting a single-family home is a more achievable goal for some millennials.

Raleigh/Durham, North Carolina

This area ranks high for many reasons. Several universities and colleges form a verifiable tech hub along with the Research Triangle Park. This area ranks just behind Silicon Valley and San Francisco in tech industry employment, drawing higher-income home buyers and renters and a consistent uptick in home building. A single-family rental can do well with this type of dynamic.

Nashville, Tennessee

Thanks to corporate interest in the area, Nashville, Tennessee is a great market to buy in due to its exponentially increasing job creation. The general outlook is that housing needs will continue to increase, especially for affordable housing as price inflation begins to outpace income growth. This could be a great market to buy single family rentals or commercial space.

Charlotte, North Carolina
Charlotte has seen success in its attempts to break away from the former sectors that defined its economy to new, more innovative industries like technology. The city strives to fit the bill, pouring resources into cutting-edge infrastructure. Although this city faces the same affordable housing challenges as other high-growth areas, it attracted 1.5% of all real estate investment in the first part of 2019.

Orlando, Florida

Population growth is expected to continue at a high rate in Orlando over the next 5 years. With an already robust tourism industry and the expansion of a monorail connecting the city to Miami, Orlando ranks high in development as well. As the city draws more workers, the need for affordable single-family rentals will grow as well.

Biggest Capital Draws

Manhattan, New York

Despite astronomically high real estate prices, this area continues to draw real estate investors at top speed. The city has seen huge leaps in economic growth since the 2008 recession, growing its technology sector by 80% with a median income of around $150,000. So, if you can afford to buy, rest assured that you’ll be able to find tenants who can afford the sales tag or rent, making single-family homes a lucrative option.

Best Suburban Areas

Northern New Jersey

Sometimes, it's all about the location. This area benefits from its position across from Manhattan on the Hudson River. Property selection is well-rounded -- you can’t go wrong with apartments, single-family rentals, retail, office or commercial spaces.

Oakland/East Bay Area, California
Another well-positioned suburban area, Oakland and the East Bay area benefit from major spillover from San Francisco. Oakland has seen massive population growth and renovations along with an increase in current rent prices, a major plus for single-family rental owners. The East Bay area is a great place to shop for industrial spaces due to its proximity to the Port of Los Angeles.

Best for Thrifty Investors

St. Louis, Missouri

With a metro area that has seen slow but steady expansion since the 1980’s, you can find moderately priced properties across the industrial, retail and residential sectors. Office space occupancy is high, with office rent prices sharply increasing. The suburban sprawl also means you can net guaranteed passive income with single-family rentals.

Best Market to Watch

Detroit, Michigan

Detroit is a study of contrasts: a core downtown area with ever-surging real estate value and growth surrounded by severely underdeveloped outskirts. With homes prices hovering around $54,000, you can get more bang for your buck. Try to stay ahead of the curve -- buy single-family rentals in areas predicted to see development coming up as the downtown revitalization spreads out from the city center.

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