Best Real Estate Markets by ZIP Code

When it comes to real estate, you’re doing yourself a disservice by focusing on the big picture. Investing is all about granularity. That’s why we focus on careful calculations (cash-on-cash return and cap rate and cash flow, oh my!)—even when it comes to picking the best real estate markets for you. Once you’ve settled on a city, your work isn’t done. That’s why the team at BPInsights combed through our proprietary datasets to find the best ZIP codes for real estate investing in every state.

Some things to keep in mind:

For data accuracy, we limited our findings to markets with a minimum of 50 rent listings and 50 property sales per month.
Some markets lag behind in reporting, so we don’t have data for June or July yet. We omitted those markets from consideration.
We didn’t use one metric as the guiding light here. Instead, we looked at balance among three metrics:
- Property appreciation
- Rent appreciation
- Rent-to-price ratio

Understand that the “top” or “best” ZIP code in any state is a subjective evaluation. This list is just BPInsight’s picks for the top ZIP code in each market. Your investing strategy might prioritize different criteria—creating a completely different list.

Here are some highlights.

Before diving into real estate investing, make sure you understand how to compare markets and properties. Whether you’re trying to decide between investing in Boise or Sacramento—or you’re just comparing two similar homes—this guide will walk you through all the numbers you need to know. From calculating cash-on-cash return to running a comparative market analysis, the experts at BiggerPockets demonstrate the steps you need to follow and the statistics you must know with The Beginner’s Guide to Real Estate Market Analysis.

Casa Grande, Arizona: 85122

This sleepy mid-sized town is less than an hour’s drive south of Phoenix—and a top real estate performer. Median sales have increased from $160,000 to $205,000 since 2017. That’s impressive—and doubly so when you look at rents. In the same time period, median rent has increased 22.7 percent, from $725 to $1,338. Overall, this Arizona town’s rent-to-price ratio is 0.65 percent.

Manhattan, Kansas: 66502

The college market can be a goldmine for savvy investors. Kansas’s “Little Apple” is home to Kansas State University, and while median sales prices may be slightly decreasing, the median rent has stayed relatively stable—which could make this a great opportunity for a fabulous deal in the Flint Hills. Expect a rent-to-price ratio of 0.45 percent.

Baltimore, Maryland: 21211

Clinging to I-83, this little sliver of northern Baltimore includes a chunk of historic Druid Hill Park and is right next to the Maryland Zoo. Its 1.2 percent price-to-rent ratio—driven by declining home prices and dramatically increasing rents—is the highest on our list. Your potential tenants will have no shortage of cafes and boutiques, and the local light rail station heads directly downtown.

Portage, Michigan: 49024

This suburban enclave is tucked between Kalamazoo, Michigan, and a large game preserve—making it ideal for outdoorsmen. Smart investors can find fantastic, cash-flowing deals here. While year-over-year property appreciation has hovered around 8 percent, year-over-year rent appreciation is a rock-solid 47 percent. That makes the rent-to-price ratio 0.75 percent. Not bad at all.

Chattanooga, Tennessee: 37343

If you’re interested in exploring more rural investments, check out this sprawling ZIP along the Tennessee River. Here, you’re not far from Chattanooga, but potential tenants can still enjoy a quieter life. Year-over-year rent appreciation is a startling 64 percent—with an average appreciation of 22.6 percent from 2017 to 2020—so you can feel confident in your potential cash flow for years down the line.

Portland, Oregon: 97220

Want to get in on the hot Portland market? This neighborhood in the city’s northeast might be a good entry. In 2020, median sales were a modest (for the area) $360,000, with 9 percent year-over-year property appreciation and 43 percent year-over-year rental appreciation. Easy-access natural areas—not to mention a short trip to the airport—can help attract buyers and renters.

Richmond, Virginia: 23224

Located across the James River from downtown Richmond, this ZIP includes gentrifying Old Town Manchester. Easy river, trail, and city access make 23224 a hot spot for rental-minded investors. Rents have increased an average of 8.9 percent annually, and the area sports an impressive 48 percent year-over-year property appreciation. The result? A whopping 0.87 percent rent-to-price ratio.

Essex, Vermont: 05452

Close to both Burlington and Lake Champlain, it’s no surprise that Essex, Vermont, should attract investor interest. Median rents have increased from $1,400 to $1,600 since 2017, and the area is seeing a modest year-over-year property appreciation rate of 1 percent. Despite a year-over-year rent appreciation dip and rental depreciation, it still sports a 0.53 percent rent-to-price ratio.

Find the Best ZIP Code in Your State

Want to see the full list of top investing ZIP codes by state? Become a BiggerPockets Pro Member today for full access to BPInsight’s expert analysis and unique datasets. BPInsights gives you the information you need to find your next great deal and maximize your current investments—including proprietary spreadsheets and our one-of-a-kind Rent Estimator tool.

Which ZIP codes are the best in YOUR state? Why?

Let us know in the comments below.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.