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Your ZIP code is a pretty important piece of an address, especially when it comes to the real estate market. HomeUnion, an online real estate investment management firm, identified zip codes in 20 metros that maximize real estate returns while minimizing risk over a five-year horizon. They examined school quality and neighborhood attractiveness for single-family rentals over five years.
“HomeUnion Research Services looked at more than a dozen attributes that characterize a neighborhood including crime, schools, white-collar jobs, unemployment, homeownership, permitting activity, etc.,” said Steve Hovland, director of research for HomeUnion. “Based on those attributes, we forecast appreciation, vacancy and rent changes over the next five years.”
The study calculated Annualized Total Return, which includes HomeUnion’s projections for how much the value of single-family rentals will appreciate and how much cash flow they’re expected to generate. According to Hovland, HomeUnion’s model can determine the price and rent for every single-family home within a specific zip code and allow them to predict the price and rent in five years.
Americans are increasingly investing in real estate to reap the rewards, which makes investing in the right ZIP code crucial. To mitigate risk and earn the highest real estate returns, investors should focus assets that can maintain value even during downturns, Hovland said.
Remember, when it comes to real estate, ZIP codes aren’t the only numbers that matter. Without a good credit score, financing a real estate investment can be difficult and costly. See where you stand and check your credit score for free at Credit.com. Here are the top ZIP codes with the highest real estate returns.
20. 46280
Submarket: North Indianapolis
Metro Area: Indianapolis
Annualized Total Return: 5.4%
19. 91602
Submarket: North Hollywood, California
Metro Area: Los Angeles
Annualized Total Return: 5.4%
18. 73003
Submarket: Edmond, Oklahoma
Metro Area: Oklahoma City
Annualized Total Return: 5.4%
17. 63043
Submarket: Maryland Heights, Missouri
Metro Area: St. Louis
Annualized Total Return: 5.5%
16. 85259
Submarket: North Scottsdale, Arizona
Metro Area: Phoenix
Annualized Total Return: 5.5%
15. 77059
Submarket: Clear Lake City, Texas
Metro Area: Houston
Annualized Total Return: 5.6%
14. 75022
Submarket: Flower Mound, Texas
Metro Area: Dallas
Annualized Total Return: 5.6%
13. 44023
Submarket: Chagrin Falls, Ohio
Metro Area: Cleveland
Annualized Total Return: 5.6%
12. 34677
Submarket: Oldsmar, Florida
Metro Area: Tampa
Annualized Total Return: 5.7%
11. 97224
Submarket: King City, Oregon
Metro Area: Portland, Oregon
Annualized Total Return: 5.8%
10. 30078
Submarket: Snellville, Georgia
Metro Area: Atlanta
Annualized Total Return: 5.8%
9. 45255
Submarket: Forestville/Cherry Grove, Ohio
Metro Area: Cincinnati
Annualized Total Return: 5.9%
8. 60016
Submarket: Des Plaines, Illinois
Metro Area: Chicago
Annualized Total Return: 6%
7. 66223
Submarket: Overland Park, Kansas
Metro Area: Kansas City
Annualized Total Return: 6.2%
6. 37062
Submarket: Fairview, Tennessee
Metro Area: Nashville
Annualized Total Return: 6.5%
5. 33327
Submarket: Weston, Florida
Metro Area: Fort Lauderdale, Florida
Annualized Total Return: 6.6%
4. 33158
Submarket: Palmetto Bay, Florida
Metro Area: Miami
Annualized Total Return: 6.8%
3. 48322
Submarket: West Bloomfield Township, Michigan
Metro Area: Detroit
Annualized Total Return: 6.9%
2. 19035
Submarket: Gladwyne, Pennsylvania
Metro Area: Philadelphia
Annualized Total Return: 6.9%
1. 33434
Submarket: Hamptons at Boca Raton, Florida
Metro Area: West Palm Beach
Annualized Total Return: 8.1%
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December 13, 2023
Mortgages