Best Cities for Tech Sector Growth and Rental Property Investment

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Money Magazine recently came out with a list of the best new cities for technology sector jobs. Understanding local job growth is a important factor in finding the best location for a real estate investment property. Who wouldn’t have loved to invest in Silicon Valley in the early 90s? But just because these cities are expected to be hot technology job markets in the coming years doesn’t mean that they’re necessarily good places for investing in a rental property. We cross checked the Money Magazine list below with our list of Top 50 Rental Markets in the latest newsletter to find out which of these markets are ripe for investment.

  1. Huntsville, AL
  2. Thousand Oaks, CA
  3. Phoenix, AZ
  4. Albany, NY
  5. Kansas City, MO
  6. Orlando, FL
  7. Salt Lake City, UT
  8. Nashville, TN
  9. Jacksonville, FL
  10. Baltimore, MD
  11. Cincinnati, OH
  12. Cleveland, OH
  13. Indianapolis, IN
  14. Columbus, OH
  15. Denver, CO
  16. Detroit, MI
  17. Tampa, FL
  18. Providence, RI
  19. Seattle, WA
  20. Chicago, IL

Of the Money Magazine list, Providence (#3), Seattle (#6), Indianapolis (#8), and Jacksonville (#13) are the only cities to land within the top 15 of our rankings by expected 1-Year Cash on Cash return. Here are the key stats for those cities:

Providence

  • Median List Price: $299,000
  • Price Growth Forecast: 4.6%
  • Cap Rate: 4.2%
  • Cash-on-Cash Return: 17.6%
  • Population Growth Rate: 0.1%
  • Unemployment Rate: 4.8%

Seattle

  • Median List Price: $425,000
  • Price Growth Forecast: 5.0%
  • Cap Rate: 3.5%
  • Cash-on-Cash Return: 16.7%
  • Population Growth Rate: 1.9%
  • Unemployment Rate: 3.7%

Indianapolis

  • Median List Price: $183,250
  • Price Growth Forecast: 3.2%
  • Cap Rate: 5.2%
  • Cash-on-Cash Return: 16.5%
  • Population Growth Rate: 0.9%
  • Unemployment Rate: 3.5%
Indianapolis Cash on Cash Return Heat Map

Indianapolis Cash on Cash Return Heat Map

Jacksonville

  • Median List Price: $249,990
  • Price Growth Forecast: 3.5%
  • Cap Rate: 4.5%
  • Cash-on-Cash Return: 15.1%
  • Population Growth Rate: 2.1%
  • Unemployment Rate: 4.1%
Jacksonville Cash on Cash Return Heat Map

Jacksonville Cash on Cash Return Heat Map

Considering the expectation that these markets will enjoy technology sector growth in the coming years, these rental markets look even more attractive. With the relatively low price level and strong Cap Rate, Indianapolis looks to be the best opportunity for the real estate investor.