The Best Places to Invest in Real Estate in 2026

Dooralysis Deal Finder analyzed 25 metro areas to find the best places to buy real estate investment properties. Here’s our ranking.

September 2026 · First edition · Next edition March 2027

With investor mortgage rates at roughly 7.25%¹, is it still possible to cash flow on a property you buy today?

We analyzed 28,560 active listings across 25 metropolitan areas, estimated rent for every one of them from nearby comparable rentals, subtracted property tax at each county's actual rate, insurance at each state's actual average, vacancy, management and age-adjusted maintenance, and financed each at 25% down over 30 years at 7.25%.

In 24 of the 25 markets, the median estimated cash flow of all active listings is negative. Detroit is the sole exception. However, in all markets you can still find properties that cash flow — some markets far more than others.

Of course, appreciation is also a critical metric for determining where to invest. We ranked the 25 metros on median cash-on-cash return² and appreciation, weighted equally. Read on to see the best markets to invest in real estate.

Overall ranking

Scored on two axes, weighted equally: median cash-on-cash return across every analyzed listing, and 5-year annualized appreciation from the FHFA House Price Index. All figures include 8% property management. Click any column heading to re-sort.

Median cash flow is calculated by using Dooralysis to estimate the rent and cash flow net of expenses for each active listing, and then taking the median per market. Rent/price is the median monthly rent as a percentage of the median price, a quick read on how much income each dollar of purchase price buys.

Cleveland takes the top spot

We ranked Cleveland at the top because it wins on balance. It’s the only market in the top four on median cash flow and the top three on appreciation. Of cash-flowing properties, its average cash flow is $338 a month. It has strong rent growth at 4.3% over the past year. And, its high proportion of properties that cash flow (42.4%, 3rd overall) gives investors more assurance that they can find a cash-flowing property.

Milwaukee has the strongest appreciation in the study

Milwaukee comes in close second. It has had strong appreciation at 7.6% a year over five years, the highest of the 25, and strong rent growth at 4.7% over the past year, second only to Boise. Properties that cash flow rake in an average of $422 a month. Milwaukee’s 2nd place is due to its lower ranking on median cash flow (7th place) and lower proportion of cash-flowing properties (just under a third).

Detroit produces more cash-flowing properties than anywhere else

At a median price of $129,500, Detroit is the cheapest market in the study. At a rent-to-price ratio of 1.23%, Detroit is the only market here that clears the old 1% rule outright. The median Detroit listing earns +$205 a month, and 64.2% of its active listings cash flow, by far the highest share of the 25. Those that do average +$384 a month and a 22.7% cash-on-cash return. Appreciation is also strong at 4.0% over the last year and 6.3% a year over the last five.

Greenville and St. Louis round out the top five

Greenville, South Carolina is the one market outside the Midwest to reach the top group, and it gets there on appreciation rather than income: 7.4% a year over five years, third-best of the 25, but with only 6.7% of listings that cash flow today. In St. Louis, 46.4% of listings cash flow, second only to Detroit, with 6.3% five-year appreciation.

Four of our top five picks are Midwestern, and that holds all the way down: all seven Midwestern metros in this study land in the top group on both cash flow and appreciation. Only Greenville joins them from outside the region.

Some of this is due to job and population growth. Columbus added jobs at 1.9% over the year to December 2025 — roughly ten times the national rate and fourth-fastest of any US metro, behind only Raleigh, Austin and Las Vegas — while its population grew 1.38%, well above the national pace.⁵ Cleveland ranks third for income growth and sixth for job growth among twelve large Midwest metros.⁶ Rents are following: Cleveland rents rose 4.3% over the past year and Kansas City's 3.7%, among the fastest of the 25.

A note on insurance costs

Some markets are ranked lower due to the high cost of insurance. Oklahoma City, for example, has the second-highest premiums in the country after Florida; the median house will cost around $433 a month. Besides Florida, Oklahoma, Texas, and Alabama have a high cost of insurance.

Ranking by cash flow

Ranked on the share of listings that cash flow (weighted at 70%) and the average monthly cash flow of those that do (weighted at 30%).

Monthly cash flow and CoC are calculated only from listings that cash flow, so keep the share of properties that cash flow in mind. Markets where few properties cash flow will have much more competition for the properties that do, and will likely sell over the asking price, impacting the estimated cash flow shown in this report.

Rent change is the year-over-year move in the Zillow Observed Rent Index through July 2026.

Ranking by appreciation

Annualized change in the FHFA House Price Index through 2026 Q2. Ranked by 5-year annualized — click 1-year or 10-year to re-sort.

The five-year figures are flattered by the 2021–22 boom, which lifts nearly every market. The 1-year column shows what is happening right now: eight of the 25 metros are losing value, led by San Antonio at −3.0% and Denver at −1.1%.

Charlotte has the starkest change: 6.9% a year over five years, and −0.1% over the last one. Nashville, Dallas and Jacksonville show the same pattern.

Appreciation vs. rent growth

You can gain additional insights by comparing each market's price growth against its rent growth. Milwaukee, Cleveland, Boise, St. Louis and Detroit look promising for today's buyers, with strong appreciation and rent growth over the last year. However, in Tampa, prices are up 2.2% while rents fell 0.5%, indicating that waiting to buy in Tampa will become steadily more expensive to get the same income.

Ranked on 1-year appreciation and rent change, weighted equally.

A note of caution for investors

While these Midwest markets may have a high yield on paper, these calculations say nothing about ease of renting, reliability of tenants paying consistently and on time each month, and ease of selling for investors who wish to liquidate their assets. It is critical to do your own research on this front.

Methodology

How we chose the markets: We chose a diverse variety of 25 metros spread across the Sun Belt, Mountain West, Southeast and Midwest, and limited to metros for which FHFA publishes a house price index.

What we analyzed: 28,560 active for-sale listings across 25 metros, pulled within 25 miles of each metro center in September 2026: single family, condo, townhouse and 2–4 unit multifamily. We excluded 5+ unit commercial, land, manufactured homes, and anything under $50,000 or 400 square feet.

How we estimated rent: For every listing we estimated what it would rent for from comparable rentals nearby — those listed within the last 90 days, within 3 miles, within one bedroom and one bathroom, and within 35% of its size. Each comparable is then adjusted toward the subject property using a regression fitted on that metro's own rentals, so a comp that is larger or has an extra bedroom is corrected before it counts. We also pay attention to how each rental actually performed. A unit that sat on the market for months is evidence the asking price was too high. A unit that leased quickly is better evidence of what renters will really pay, so it counts for more. This is the same engine behind Dooralysis Rent Advisor, which will do this for a single address and show you every comparable it used.

Financing. 25% down, 30-year fixed at 7.25%, identical in every market.

Operating expenses. Property tax at each county's actual effective rate, from Census ACS data covering 3,208 counties. Insurance at each state's average premium, scaled by property value and adjusted for landlord coverage³. Plus 5% vacancy, 8% management, and maintenance scaled by year built — 8% of rent for post-2000 construction, 12% for 1960–1999, 15% for older. HOA fees where reported.

What is not included. Closing costs, rehab and reserves are excluded, so cash-on-cash is optimistic against a full underwrite — identically so in every market, which leaves the ranking intact even though the level is generous.

Appreciation. FHFA House Price Index, purchase-only, metropolitan level, through 2026 Q2. It is built from repeat sales on conforming, GSE-backed mortgages, so it under-represents cash purchases and the top of each market. FHFA splits Detroit into two divisions — Detroit-Dearborn-Livonia and Warren-Troy-Farmington Hills — and a 25-mile radius covers both, so Detroit’s figures are the average of the two.

These are asking prices, not sale prices. Sale prices are not public record in non-disclosure states and coverage is thin nationally, so a list-price basis is the only one that can be applied consistently across 25 metros. In today's market that makes these figures conservative: roughly three-quarters of US homes are now selling at or below asking price⁴, so the returns an investor negotiates should be better than those shown here.

Rent changes are from the Zillow Observed Rent Index (ZORI), a repeat-rent measure weighted to each metro's rental housing stock rather than to whatever happens to be listed, through July 2026.

Listing data via RentCast, which aggregates public listing feeds rather than MLS records.

This is a screening tool, not underwriting. Every figure is an estimate built from public listing data. Verify before you make an offer. Not financial advice.

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