Investors cashing in on rising US property prices

Real estate investors hoping to grab a slice of the US's often volatile property market are rushing to inject their capital following news that prices are rising across many major cities.

According to new research rankings from personal finance news and features publication GOBankingRates.com, many cities are offering big opportunities for investors. The online publication released rankings of the best and worst US cities in which to purchase an investment property.

Based on a report comprising 61 of the 100 most populous cuties in the country as per last year's annual Census estimates, the rankings were compiled using four major factors. These included the percent change in the number of employed people in the city year on year, the percent change in the population of the city year on year, the percent change in the median home value in the city year over year and the number of years it would take in order for rental income to totally pay off the median home value.

Overall, the rankings revealed that real estate investors should look to cities in Texas and Florida, as six out of the top 15 cities were based in those two states. In contrast, the Midwest of the country was not found to offer good investment opportunities, as no city in the region made it onto the top 15 ranking list, with many appearing on the 15 worst cities in which to invest list.

Cameron Huddleston, Life + Money columnist for GOBankingRates, said that rising populations in some cities were causing a rising demand for more housing: "That’s why these cities are such great places to own investment property now. On the other hand, the cities at the bottom of our list have seen little-to-no population growth, so the demand for housing isn’t as high—which means real estate investors won't do as well there.”

Dallas, Texas, was seen as a solid investment location, appearing at number eight on the best cities in which to invest list. It recorded employment growth of 3.3 per cent, population growth of 1.5 per cent, a rise in home values of 17.6 per cent and an average of eight years in which rental income would pay off an investment property in its entirety.

Denver, Colorado was number three on the list, with employment growth of 3.2 per cent, population growth of 2.8 per cent, a rise in home values of 10.5 per cent and an average of 15.1 years in which rental income would pay off an investment property in its entirety.

Florida nabbed the two top spots on the best places in which to invest list, with Tampa taking second place and Orlando in first place. Tampa enjoyed year on year employment growth of 3.5 per cent, population growth of 2.5 per cent, a rise in home values of 11.6 per cent and an average of 9.7 years in which rental income would pay off an investment property in its entirety.

Orlando saw employment growth of 4.5 per cent, population growth of 3 per cent, a rise in home values of 11 per cent and an average of 12.4 years in which rental income would pay off an investment property in its entirety.

In terms of the worst cities in which to invest, Pittsburgh was high on the list, with employment growth of 0.6 per cent, population growth of -0.5 per cent, a rise in home values of 9.9 per cent and an average of 7.2 years in which rental income would pay off an investment property in its entirety. Anchorage in Alaska also featured highly on this list, with employment growth of 0.5 per cent, population growth of -0.6 per cent, a rise in home values of 2.3 per cent and an average of 13.8 years in which rental income would pay off an investment property in its entirety.

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