Top 5 Places for a Long-Term Rental in 2023

Long-term rental properties remain a viable avenue for consistent income generation for real estate investors continuing into 2023.

However, the significance of selecting the ideal location for these investments cannot be overstated, as it directly influences rental demand, rental rates, and property appreciation.

In this guide, we’ll explore the top five places for long-term rental in 2023 that present great prospects for investment, including tips on finding the most suitable location and property type based on your needs.

What makes a location suitable for long-term rental?

Choosing the ideal location for your next long-term rental property is an intricate process that will require a deep understanding of various factors, including rental demand, rental rates, property appreciation, and local amenities.

Rental demand

In locations with high rental demand such as areas near universities or business hubs, there is an increased likelihood of consistent tenant occupancy. For example, in college towns, there is a continual influx of students seeking housing, providing a steady stream of potential tenants.

Rent rate

Locations, where the market rent is high, can ensure a regular and substantial income from long-term rentals. For instance, urban areas with high living costs, such as New York or San Francisco, often have high rental rates, providing landlords with a consistent, substantial income.

Property appreciation

Locations experiencing steady property value increases can offer significant future benefits. For example, investing in an up-and-coming neighborhood with signs of economic growth and development can lead to considerable property value appreciation over time.

Local amenities

Properties situated near essential amenities such as shopping centers, restaurants, parks, and public transportation are often more appealing to renters. For instance, a property in the heart of a city with close proximity to these amenities will likely attract a wider pool of potential tenants compared to a remote property with fewer nearby amenities.

The top types of properties for long-term rental in 2023

Choosing the right type of property to invest in will be important for ensuring consistent demand and optimal returns. Here are five types of properties that are often well-suited for long-term rentals.

1. Single-family homes

Single-family homes are a staple in the rental market. These properties often attract stable, long-term tenants like small families who value the privacy and autonomy that a single-family home provides.

Look for homes in family-friendly neighborhoods with good schools and amenities to attract long-term tenants.

2. Duplex/triplex properties

These properties allow you to rent to multiple tenants, ensuring a steady flow of income even if one unit is vacant.

Look for duplexes or triplexes in areas with high rental demand, such as near universities or business districts.

3. Condominiums in urban areas

Condominiums, especially those in urban areas, attract young professionals and families drawn to the convenient proximity to workplaces and amenities.

Look for condos in vibrant urban areas with easy access to transportation, shopping, and entertainment.

4. Properties near colleges or universities

Properties near colleges or universities tend to have a consistent demand from students and staff.

Consider properties within walking or biking distance of the campus, but be prepared for potential higher turnover.

5. Vacation rentals in tourist areas

Vacation rentals in tourist areas can yield higher rents during peak seasons, although they may require more hands-on management.

Look for properties in popular tourist areas, preferably with attractions or beach access.

The top 5 cities for long-term rental in 2023

These cities are based on the latest data and market trends of 2023 to help you narrow down the best regions for investing in long-term rental property.

1. Vero Beach, Florida

Vero Beach offers an impressive gross rental yield of 15%, coupled with a high average rent index of $2,000. With a home value appreciation rate of 18.9% and a relatively low unemployment rate of 4.4%, this city is a promising location for long-term rental investments.

2. Naples, Florida

Naples showcases a high gross rental yield of 14.7% and an even higher average rent index of $2,592. With home values appreciating at a rate of 19.2% and an unemployment rate of just 2.5%, this city stands out as an attractive destination for long-term rental investors.

3. Baltimore, Maryland

Baltimore presents a high gross rental yield of around 16% and a solid average rent index of $1,800. The city’s high home value appreciation of 14.5% and the low median purchase price of $191,000 suggest potential for profitable long-term rental investments.

4. Phoenix, Arizona

Phoenix offers a high gross rental yield of 10.6% and a high average rent index of $1,900. The city’s robust home value appreciation of 13.70% and strong economic growth make it a promising market for long-term rental properties.

5. Charlotte, North Carolina

Charlotte boasts a high gross rental yield and a favorable average rent index of $1,900.

Furthermore, Charlotte’s home values have been on an upward trajectory, suggesting potential for solid asset appreciation over the long term.

Also, the city’s lower-than-average cost for a full home renovation is another perk for investors considering property upgrades or refurbishments to increase rent properties and enhance their property’s value.

Work with Park Place Finance for rental loans

If you’re a real estate investor seeking to secure a rental property for long-term returns, the right financial backing can make all the difference.

Park Place Finance, a Texas-based private money lender, specializes in providing fast, dependable loans for investment properties.

We operate in 47 states offering competitive rates and flexible terms designed to help you with your next investment property.

Interested in exploring our rental loan options? Call us today at (866) 407-1599.