Earlier this year, we found the best cities to invest in real estate in the U.S. by looking for cities where home ownership costs are low and home value appreciation is high, among other factors. But what about suburban real estate? According to our analysis, the best suburbs in the U.S. to invest in real estate are right outside cities like Huntsville, Boise, Kansas City, Chicago, and Phoenix.
Using data from Zillow and the U.S. Census, we looked at the largest 1,300+ cities in the U.S. and crunched the numbers to find the best places for investing in real estate in 2022. Then we pulled out the top-scoring suburbs — defined as a community within commuting distance of a major city — to create this list of the best suburbs to invest in real estate.
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10. Alabaster, Alabama
Suburb of: Birmingham
Typical home value: $264,125
Five-year home value appreciation: 52.30%
Effective property tax rate: 0.50%
Rental vacancy rate: 5.70%
Rent to home value ratio: 5.20%
Rent to income ratio: 16.90%
Typical home value in Alabaster is 23% below average, and five-year home value appreciation is 15% below average. The effective property tax rate is 55% below average, and the rental vacancy rate is 2% below average.
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9. Independence, Kentucky
Suburb of: Cincinnati
Typical home value: $264,353
Five-year home value appreciation: 53.40%
Effective property tax rate: 1.16%
Rental vacancy rate: 1.20%
Rent to home value ratio: 4.30%
Rent to income ratio: 14.20%
Independence has a typical home value 23% below the national average, and its five-year appreciation rate is 13% below the national average. The effective property tax rate is 5% above average, and the rental vacancy rate is 79% below average.
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8. Covington, Kentucky
Suburb of: Cincinnati
Typical home value: $166,637
Five-year home value appreciation: 70.00%
Effective property tax rate: 1.29%
Rental vacancy rate: 2.90%
Rent to home value ratio: 5.20%
Rent to income ratio: 18.80%
Covington’s typical home value is 52% below average, and five-year home value appreciation is 14% above average. The effective property tax rate is 17% above average, and the rental vacancy rate is 50% below average.
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7. Decatur, Alabama
Suburb of: Huntsville
Typical home value: $183,632
Five-year home value appreciation:57.30%
Effective property tax rate: 0.42%
Rental vacancy rate: 9.20%
Rent to home value ratio: 4.50%
Rent to income ratio: 16.80%
Decatur’s typical home value is 47% below the national average, and its five-year appreciation rate is 7% below the national average. The effective property tax rate is 62% below the national average, but rental vacancies are 59% above average.
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6. Layton,Utah
Suburb of: Salt Lake City
Typical home value: $547,538
Five-year home value appreciation: 102.10%
Effective property tax rate: 0.63%
Rental vacancy rate: 3.20%
Rent to home value ratio: 2.40%
Rent to income ratio: 16.00%
Typical home value in Layton is 59% above the national average, and the five-year appreciation rate is 66% above average. Effective property taxes are 43% below average, and rental vacancy is 45% below average.
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5. Gilbert, Arizona
Suburb of: Phoenix
Typical home value: $588,886
Five-year home value appreciation: 95.80%
Effective property tax rate: 0.58%
Rental vacancy rate: 4.30%
Rent to home value ratio: 3.20%
Rent to income ratio: 19.10%
Gilbert’s typical home value is 71% above the national average, and its five-year appreciation is 56% above the national average. Effective property taxes are 47% below average, and rental vacancy is 26% below average.
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4. Hammond, Indiana
Suburb of: Chicago
Typical home value: $161,681
Five-year home value appreciation: 93.50%
Effective property tax rate: 1.22%
Rental vacancy rate: 3.80%
Rent to home value ratio: 6.60%
Rent to income ratio: 22.60%
The typical home value in Hammond is 53% below the national average, and the five-year appreciation is 52% above it. While effective property tax is 11% higher than average, the rental vacancy rate is 34% below average.
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3. Independence, Missouri
Suburb of: Kansas City
Typical home value: $186,183
Five-year home value appreciation: 72.0%
Effective property tax rate: 1.3%
Rental vacancy rate: 4.6%
Rent to home value ratio: 5.6%
Rent to income ratio: 20.6%
Independence has a typical home value 46% below the national average, making it easier to get into the market, and a five-year appreciation 17% above average. Effective tax rate 15% above average, but rental vacancy is 21% below average.
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2. Meridian, Idaho
Suburb of: Boise
Typical home value: $573,882
Five-year home value appreciation: 115.9%
Effective property tax rate: 0.7%
Rental vacancy rate: 0.5%
Rent to home value ratio: 2.5%
Rent to income ratio: 18.8%
Meridian’s typical home value is 67% above the national average, but its five-year home value appreciation is, too (88% above average, actually). Low effective property taxes (77% below average) and a low rental vacancy rate (92% below average) contribute to its status as a good suburb to invest in real estate.
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1. Madison, Alabama
Suburb of: Huntsville
Typical home value: $361,106
Five-year home value appreciation: 66.4%
Effective property tax rate: 0.5%
Rental vacancy rate: 2.8%
Rent to home value ratio: 3.3%
Rent to income ratio: 12.6%
The top city on our list of the best suburbs to invest in real estate is Madison, Alabama, which is outside Huntsville. While typical home values in Madison are 5% above the national average, the five-year home value appreciation is 8% above average. Effective tax rate is 53% below average, and the rental vacancy rate is 52% below average.
This article originally appeared on Policygenius.com and was syndicated by MediaFeed.org
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