When it comes to investment strategies, buy and hold is very popular. Investing in this sort of real estate comes with a number of perks. Investors enjoy tax breaks, a regulated stream of rental income and they are able to avoid the perils of inflation.

Before we break down the top 5 cities for buy and hold real estate, let’s take a closer look at the factors that need to be considered when these sorts of decisions are made.

1. Affordability

Of course, this is a primary factor in any decision of this magnitude and when a city is not affordable, buy and hold investments are not wise. No one wants to make a purchase in a city where the average citizen cannot afford to live. Before you make an investment of this nature, you will need to check out the price to rent ratio for the city you are considering.

The cost of living index also provides valuable information. These numbers are your best bet when you need to decide whether to buy or rent a home. If the economy is improving in the city you are considering, there will be more people who are willing to pay a higher rent.

2. New Infrastructure

When a city’s population starts to increase, you want to be sure that they can actually handle the rise in residents. As the demand for property increase, the city needs to provide new infrastructure that meets this demand. If the supply of buy and hold investments does not keep up with this demand, this is a very bad sign.

There is also a certain danger in making this type of investment if there are too many new buildings being constructed. A real estate market analysis is needed so that you can find out more about what type of properties are being built. This lets you know whether the investment is worth your while.

3. Population Increases/Decreases

This information is also going to play a very important role in any decision that you decide to make. You must take a closer look at all of the relevant statistics in this regard. The city that you are considering should experience regular population increases. Otherwise, your buy and hold investment will sit idle as you wait for interested renters to show up.

Those who are truly successful understand this principle and they are also able to learn more about why certain increases are taking place. The best investors also know WHERE the increases are happening. In most instances, new arrivals all tend to head to the same locations. Knowing where your target tenants are settling down is key.

4. Job Growth

We have saved arguably the most important factor for last. After all, no one is going to move to a new city if there are no opportunities for meaningful employment. If the city that you are currently looking into is not producing a series of new jobs, this is a sure sign that you should be investing elsewhere.

Without job growth, the economy is not going to be healthy. Without a health economy, you will have no tenants. This is a factor that must also be considered when you are looking at population trends in any particular city. Everyone wants to move to where the jobs are.

What Are The Top 5 Cities To Invest In?

1. Atlanta, Georgia

Atlanta has become one of the primary hubs of the southeast and for good reason. With a population growth rate of 3 percent and a job growth rate of 2.2 percent, it is easy why so many residents are flocking in droves. The cost of living index stands at 72.05 and with a median property price of $433,000, people will continue to move to this city in huge numbers.

2. Washington, DC

Thanks to the government sector and the legal stores, there are no shortage of meaningful jobs being created here. The cost of living index is 88.5 and investors can receive a cash on cash return of up to 2.1% percent. Job growth levels are over 1.5 percent. There is over $2,600 in traditional rental income to be made here as well.

3. Nashville, Tennessee

With an average of 100 new residents per day, Nashville has quickly become one of the most attractive cities for those seeking buy and hold real estate. Job growth levels are over 2 percent and so is population growth. The cash on cash return for your investment stands at nearly 2 percent.

4. Kansas City, Missouri

This city has been experiencing consistent population growth for the past few years. Real estate is also highly affordable here. Job growth and population growth both remain in the 1.5 percent range and the cost of living index is at 65.7. Multi family homes are also on the rise in Kansas City, providing would be investors with a bevy of opportunities.

5. Denver, Colorado

The Mile High city is currently running at its highest possible level and this is great news for buy and hold investors. The vacancy rates are low and the rent is high. Population growth is skyrocketing (8.5 percent!). With a cash on cash return of nearly 1.8 percent, there is a reason why so many buy and hold investors are targeting Denver.