As you know, the goal of this blog is to help you stay at the top of your game through technology tips and tricks, marketing hacks, investment strategies and more. Well, here's our first must read piece of 2019. In this guest post from our friends at Mashvisor, Daniela Andreevska lays out the hottest REI markets around the country. If you're ready to start building your buy and hold portfolio, the tools Mashvisor provides will help you run the numbers to quickly identify the best deals in your market. Use promo code REIRAIL25 or simply click this link to receive 25% of any Mashvisor subscription. Now to the list...

10 Hot Real Estate Investment Markets to Keep Your Eye On in 2019

Real estate is one of the top investment options out there as it is a low-risk strategy which offers a very high potential for return. Another important advantage of real estate investing is the variety of strategies which you can choose from including but not limited to rental properties, fix and flip, wholesaling, and others. However, in order to become a successful real estate investor, you have to learn to find the best locations for property investments in line with your preferred strategy. As real estate experts say, location location location are the three main factors for the success of a real estate business. If you are just starting out now, there is no need to worry as we’ve prepared for you a list of the 10 top markets for real estate investments in 2019. These include the hottest places for buying a rental property, flipping, and wholesaling.

     1. Dallas/Fort Worth, TX

The first US real estate market to keep an eye on in 2019 is Dallas/Fort Worth. Overall, this is a top location for investing in real estate, regardless of your strategy. PWC’s Emerging Trends in Real Estate: Unites States and Canada 2019 ranked Dallas/Fort Worth as the number one market to watch this year. The main drivers of the real estate market there are the expected high population growth (twice the national average) and the strong homebuilding prospects. This will drive demand for rental properties, supported by the high price to rent ratio (19), which means that people find it better to rent a property rather than buy a home. According to data from Mashvisor, a real estate data analytics company which helps investors find lucrative traditional and Airbnb rental properties, the best neighborhood for investing in long-term rentals in Dallas is South Dallas, where the average cap rate is 3.0%. Meanwhile, the top neighborhoods for buying a short-term rental are North Dallas and Dells District, where the cap rate for this type of rentals is also 3.0%. Moreover, Dallas is one of the hottest US real estate markets where short-term rentals don’t face prohibitive regulations.

If you, on the other hand, prefer a short-term real estate investment strategy, the 75224 zip code in Dallas saw one of the highest flipping rates (26.8%) in Q3 2018, a trend which is expected to continue in 2019.

     2. Key West, FL

If you look for a long-term real estate investment, you should definitely consider the Key West, FL housing market. While some markets are best for traditional rentals, and others are a top choice for Airbnb properties, you can’t go wrong in Key West, regardless of which rental strategy you prefer. According to January 2019 data from Mashvisor, long-term and short-term rentals yield a cap rate of 4.3% and 4.2%, respectively, which exceeds the average return on investment in most hot real estate markets. In addition, while there are some restrictions, Airbnb Key West remains legal.

     3. Philadelphia, PA

Third on our list for the hottest real estate markets to keep an eye on in 2019 is Philadelphia, PA. First of all, Pennsylvania’s largest city experienced one of the highest average gross ROI rates for flipping in Q3 2018, 107.9%. Second, Philly is one of the best places across the US to invest in a small multi family property, with a price up to $5 million. The city-level cap rate for renting out a multi family home on long-term basis is 3.0%, significantly higher than the majority of US housing markets.

     4. Raleigh/Durham, NC

Another top location for investing in real estate in 2019 is Raleigh/Durham. PWC ranked the market as the third in terms of overall real estate prospects. If you go for buy and hold in Raleigh/Durham, you can expect high appreciation. Meanwhile, the price to rent ratio is high at 25 in Raleigh and 19 in Durham, which means strong rental demand. Moreover, wholesaling is also a successful real estate strategy in the area.

     5. Cincinnati, OH

Whether you want to make money fast in real estate or go for a long-term investment strategy, consider the Cincinnati housing market in 2019. The 41091 zip code recently experienced an average gross flipping ROI of 631.0%, the second highest among 1,264 US zip codes with at least 10 flips in Q3 2018. In addition, Mashvisor data shows that Cincinnati is one of the most profitable US real estate markets for small multi family home property investments. The average cap rate for renting out this type of properties is 3.0%. Furthermore, Airbnb rentals yield a high return on investment of 3.4%. While Airbnb laws are currently being discussed by the City Council, the outlook seems positive for the short-term rental business in Cincinnati.

     6. Tampa/St. Petersburg, FL

Real estate investors aspiring to succeed in 2019 should have a look at the Tampa/St. Petersburg real estate market as well. The reasons are many. This housing market is among the top 10 markets to watch this year, according to the PWC’s report, which makes it a top choice for investing in real estate for growth. Additionally, it is one the best places to buy a vacation home rental not only in Florida but also across the US. In January 2019 the average Airbnb cap rate in Tampa is 3.5%, the result of an average short-term rental income of $2,340, Airbnb occupancy rate of 52%, and affordable property prices with a median level of $347,200. If you are looking for a multi family home to invest in, Tampa has one of the highest returns on investment nationwide, with a city-level cap rate for traditional rentals of 3.0%. At the same time, real estate wholesalers can succeed with selling to fix-and-flippers, landlords, and retail real estate buyers.

     7. Baltimore, MD

The Baltimore real estate market also gives investors some flexibility. Those who want to make a quick profit can successfully flip properties. Two zip codes there – 21216 and 21218 – were particularly profitable in Q3 2018 with an average gross flipping ROI of 410.4% and 357.1%, accordingly. Nevertheless, if you want to invest in rental properties, you should explore the options in Baltimore. The city-level cap rate for Baltimore traditional rentals is 2.4%.

     8. New York, NY

Of course, a list of the hottest real estate investment markets for 2019 cannot exclude New York City. Brooklyn, on the one hand, is the second most important housing market to watch according to PWC. On the other hand, zip code 11436 in Queens witnessed one of the highest home flipping rates, 25.6%, according to ATTOM Data Solutions. As if NYC was not already a hot real estate market, it’s expected to get only hotter in the coming years after Amazon announced that it will construct its HQ2 in Long Island City. The addition of 25,000 high paying jobs to the already active labor market in New York will push up the demand for high-quality, gentrified real estate properties there. Both rental property and buy and hold investors are expected to make big profits.

     9. Trenton, NJ

Trenton is emerging as another top location for investing in real estate in 2019. It is among the most affordable markets with high potential for return. The median property price is $140,500, while the cap rate for traditional rentals is 4.1%. Mashvisor data shows that Trenton, NJ has the highest cap rate for multi family properties rented out on long-term basis, 5.0%. Rental demand is strong as 60% of households in Trenton rent instead of owning a home. Moreover, property prices grew 16% year-on-year, which makes buy and hold an excellent investment strategy in this housing market.

     10. Joshua Tree, CA

It might come as a surprise to many of you to hear that Joshua Tree, a census-designated place in the San Bernardino County in California, has been a top choice for investing in short-term rentals for a number of years now. The average Airbnb cap rate is 7.5%, while the average Airbnb occupancy rate is 58%. While short-term rentals have become illegal in many California locations, they are still a viable option in Joshua Tree.

One of the main advantages of real estate over other investment strategies is the endless options which property investors have at their disposal. This is in terms of strategies, level of engagement, markets, and types of properties. Regardless of whether you plan to engage in flipping or wholesaling or to invest in rental properties, now you know which hot US real estate markets to keep an eye on in 2019.

Daniela Andreevska is Marketing Director at Mashvisor, a real estate analytics tool which helps real estate investors quickly find traditional and Airbnb investment properties. A research process that’s usually 3 months now can take 15 minutes. We provide all the real estate information in easy to understand visualizations.