Every new investor eventually asks the same question: “Is real estate a good investment right now?”
And the correct answer hasn’t changed in 100 years: it depends entirely on the location.
You can buy a beautifully renovated home, upgraded to the heavens, but if it sits in a market with weak job growth, high vacancy, and declining rents, congratulations—you bought a liability with granite countertops.
For first-time buyers, rental investors, and even institutional funds, understanding local market dynamics is the difference between building long-term wealth… or building character.
This collaboration between Sell2Rent and RHOME breaks down the core data points you should analyze before buying in any market, whether you're targeting the fastest growing city in the US, exploring states with no property tax, or just wondering when is the best time to buy a house.
1. Appreciation, Market Value, and City Growth Trends
Location drives appreciation. Some markets compound value fast thanks to population growth, employment, and infrastructure. Others… not so much.
Comparative Market Analysis (CMA)
A CMA helps estimate a home’s current market value by comparing recent sales in the same area. It’s your foundation for determining whether house prices are going down or if you’re stepping into a competitive seller’s market.
Market Growth Signals
Look for cities with rising household income percentiles, new employers, transit expansions, or universities increasing enrollment. These areas frequently rank among the fastest growing cities in the US and often outperform national appreciation averages.
Want real, actionable data? Tools like MyRealEstateAnalytics (https://myrealestateanalytics.com/) help investors track appreciation curves, inventory shifts, and neighborhood-level demand.
2. Rental Market Health: The Lifeblood of Passive Income
For buy-and-hold investors, the rental market is where the deal lives or dies.
Vacancy Rate
A low vacancy rate (3–5 percent) signals strong rental demand. High vacancy means your future tenant may be someone’s imagination.
Cap Rate
Cap Rate = Net Operating Income / Property Value x 100
Different markets have different norms, but this metric lets you compare properties across states, cities, and even asset types.
RHOME’s local expertise helps investors evaluate how NOI and expenses vary by region, which is essential when analyzing cap rate performance.
Unemployment Rate
Lower unemployment generally means:
• More stable tenants
• Fewer missed rent payments
• Higher demand for rentals
• Lower long-term risk
Economically unstable areas often drag property performance down—no matter how pretty the home is.
3. Demographics and Economics: Who Lives There Matters
Location dictates tenant quality, rent stability, and long-term revenue.
Household Income Percentile
If local incomes can’t support your projected rent, your deal is already underwater.
Housing Inventory
Low housing inventory often means upward pressure on prices and rents.
High inventory may indicate shifting trends or declining demand.
Analyzing inventory also helps answer the question:
Is it a buyer’s or seller’s market in this area?
4. Location and Cost Structure: Taxes, DOM, and Operational Realities
A city can have high appreciation and strong rent demand but still crush your returns if the cost structure is brutal.
Property Taxes
Look into:
• States without property tax
• Lowest property tax states
• County-level millage rates
Property taxes significantly impact NOI and therefore cap rate.
Days on Market (DOM)
Low DOM = high demand
High DOM = potential negotiation room
The best time to buy a house is often late fall or winter—competition goes down and leverage goes up.
5. The Investor Blueprint: How to Actually Become a Real Estate Investor
Understanding location isn’t optional—it’s your entire investing framework.
Before writing an offer:
✔ Study appreciation trends
✔ Compare rents and vacancy rates
✔ Analyze unemployment and income levels
✔ Evaluate taxes and local legislation
✔ Benchmark using a CMA
✔ Check real-time housing market trends
Modern investors don’t guess—they analyze. Sell2Rent and RHOME help power those decisions with data-driven tools, market insights, and operational support.
6. The Sell2Rent Advantage: Leasebacks Reduce Market Risk
Location determines value, but execution determines returns.
When investors use Sell2Rent’s residential sale-leaseback model, they remove two of the biggest market risks—vacancy and turnover—because every property comes with a vetted tenant already in place.
According to Sell2Rent’s internal research, leaseback tenants stay longer, pay on time, and significantly reduce controllable expenses like turnover, commissions, and maintenance
S2R Whitepaper Residential Leas…
.
Pair that with RHOME’s professional property management and you get:
• Higher predictability
• More stable NOI
• Reduced operating friction
• Stronger long-term returns
That’s the kind of operational efficiency investors crave—especially in competitive markets.
7. Your Data Toolkit
To properly evaluate a location, start with tools that give real, unbiased data:
📌 Market trends & analytics:
https://myrealestateanalytics.com/
📌 Learn more real estate strategies:
https://www.sell2rent.com/blog
📌 Explore nationwide off-market properties with tenants already in place:
https://property.sell2rent.com/
📌 Get deals tailored to your buy box (free to register):
https://bit.ly/4c1ZUBN
📌 RHOME professional property management services:
https://www.rhomepm.com/
Final Takeaway
The home itself matters.
But the location determines your equity, your cap rate, your tenant profile, your tax burden, your long-term appreciation, and whether your investment is an asset—or a headache.
Markets change fast. Data keeps you grounded. And partnering with Sell2Rent + RHOME gives investors tools to navigate a shifting housing market 2025 confidently and profitably.
Subscribe to the Real Estate Digest. Weekly newsletter.
