Updated on April 1, 2025

10+ Best Places to Buy a Rental Property in America under $500K [2025]

Follow this guide to discover top affordable U.S. cities like Orlando, FL; Detroit, MI; Indianapolis, IN; and others where you can secure a home under $500K.

Written by Michele Lawrie

Licensed Realtor®

Reviewed by Steven Glick

Director of Mortgage Sales | NMLS# 1231769

10+ Best Places to Buy a Rental Property in America under $500K [2025]

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Buying a rental property in the U.S. can be highly beneficial, whether looking for steady long-term income or a high-yield short-term rental. The good news? You don’t need a million-dollar budget to make it happen, and there are still great investment opportunities under $500K if you know where to look.

I’ve researched over the years to find the best markets where affordability meets strong rental demand. Whether you’re eyeing a vacation rental hotspot or a steady cash-flowing property, there are plenty of places in America where your rental investment can prove highly profitable.

Let’s dive into the top cities offering great returns for short-term and long-term rentals!

Overview of the 2025 Housing Market

Finding a profitable rental property under $500K in the U.S. is still possible in 2025, but you need to know where to look. While home prices have increased, many cities still offer affordable homes with strong rental demand and great returns.

Of course, investing isn’t always easy. With higher mortgage rates, tough competition, and financing hurdles, it can feel overwhelming to find the right property. But whether you’re looking for a vacation rental in a high-tourism area or a long-term rental with a steady cash flow, the right market can make all the difference.

At HomeAbroad, we’ve helped investors overcome these challenges by finding great deals, connecting them with the right lenders, and guiding them toward markets with real potential. Whether it’s a growing neighborhood with rising demand or a city with strong rental returns, we guide you to find the perfect fit for your rental investment.

Let’s dive in through the guide to explore the proper cities, monitor market trends, and use the best financing options to maximize your investment.

Popular Locations in the US to Buy Houses Under $500K

When buying a home as a rental investment, finding the right location is key to maximizing your returns. With a budget of $500,000 or less, there are plenty of opportunities to purchase properties that generate steady rental income.

Whether looking for a short-term rental in a high-demand tourist area or a long-term rental in a growing market with strong tenant demand, the correct city can make all the difference. Investing in the right property can provide consistent cash flow, appreciation potential, and long-term financial growth. Let’s explore some of the best places to buy a rental investment property in the US!

1. Nashville, Tennessee

Nashville, Tennessee, is one of the most sought-after cities for short-term rental investments, thanks to its booming tourism industry, strong job market, and vibrant entertainment scene. As the heart of country music and home to world-famous attractions like Broadway and the Grand Ole Opry and significant events such as the CMA Fest, the city sees millions of visitors annually. This constant influx of tourists fuels high demand for vacation rentals, making short-term rentals a profitable investment opportunity. Additionally, Nashville’s growing population and strong economy contribute to an expanding housing market, further solidifying its appeal for investors.

Key Market Metrics:

Average Home Value: $429,091
Average Rent: $2,195 per month
Average Daily Rate and Occupancy Rate: $350.8 and 54% respectively
Estimated Rental Yield: 15.88%
Property Appreciation (5-Year): 32.4%

Why Invest in Nashville?

Strong Short-Term Rental Demand: Nashville’s status as a major tourist destination ensures consistent demand for short-term rentals.
Economic Growth: The city’s expanding economy and job market attract new residents, bolstering housing demand.
Cultural Appeal: Nashville’s rich cultural heritage and events like the CMA Fest draw millions of visitors annually.

With high rental yields, a thriving tourism sector, and continued economic growth, Nashville remains a top destination for short-term rental investors in 2025.

2. Orlando, Florida

Orlando, Florida, renowned for its world-class theme parks and year-round pleasant climate, stands out as a premier destination for short-term rental investments. The city’s robust tourism industry attracts millions of visitors annually, creating a consistent demand for vacation rentals. Additionally, Orlando’s growing population and expanding economy further enhance its appeal to investors seeking profitable opportunities in the short-term rental market.

Key Market Metrics:

Average Home Value: $378,740
Average Rent: $2,043 per month
Average Daily Rate and Occupancy Rate: $239.6 and 54% respectively
Estimated Rental Yield: 12.26%
Property Appreciation (5-Year): 42.1%

Why Invest in Orlando?

Strong Short-Term Rental Demand: Orlando’s status as a top tourist destination ensures a steady stream of visitors seeking short-term accommodations.
Economic Growth: The city’s expanding economy and job market attract new residents, bolstering housing demand.
Cultural and Recreational Attractions: Beyond theme parks, Orlando offers diverse cultural events, outdoor activities, and a vibrant nightlife, appealing to a broad range of visitors.

With high rental yields, a thriving tourism sector, and favorable market conditions, Orlando remains a top choice for short-term rental investors in 2025.

3. Las Vegas, Nevada

Las Vegas, Nevada, renowned for its vibrant entertainment scene and world-class attractions, is a prime location for short-term rental investments. The city’s dynamic tourism industry attracts millions of visitors annually, creating a robust demand for vacation rentals. Additionally, Las Vegas’s expanding economy and population growth further enhance its appeal to investors seeking profitable opportunities in the short-term rental market.

Key Market Metrics:

Average Home Value: $426,132
Average Rent: $1,738 per month
Average Daily Rate and Occupancy Rate: $288.8 % and 49% respectively
Estimated Rental Yield: 11.94%
Property Appreciation (5-Year): 35.8%

Why Invest in Las Vegas?

Strong Short-Term Rental Demand: Las Vegas’s status as a top tourist destination ensures a steady stream of visitors seeking short-term accommodations.
Economic Growth: The city’s expanding economy and job market attract new residents, bolstering housing demand.
Cultural and Recreational Attractions: Beyond the famous Strip, Las Vegas offers diverse entertainment options, outdoor activities, and a vibrant nightlife, appealing to many visitors.

With high rental yields, a thriving tourism sector, and favorable market conditions, Las Vegas remains a top choice for short-term rental investors in 2025.

4. Phoenix, Arizona

Phoenix, Arizona, renowned for its year-round sunshine and dynamic cultural scene, has become an attractive market for short-term rental investments. The city’s growing tourism industry, bolstered by events like the Phoenix Open and various festivals, draws numerous visitors annually, increasing demand for vacation rentals. Additionally, Phoenix’s expanding economy and population growth further enhance its appeal to investors seeking profitable opportunities in the short-term rental market.

Key Market Metrics:

Average Home Value: $412,889
Average Rent: $1,990 per month
Average Daily Rate and Occupancy Rate: $232.2 % and 55% respectively
Estimated Rental Yield: 11.14%
Property Appreciation (5-Year): 50.3%

Why Invest in Phoenix?

Strong Short-Term Rental Demand: Phoenix’s status as a popular tourist destination ensures a steady stream of visitors seeking short-term accommodations.
Economic Growth: The city’s expanding economy and job market attract new residents, bolstering housing demand.
Cultural and Recreational Attractions: Beyond its natural beauty, Phoenix offers diverse cultural events, outdoor activities, and a vibrant nightlife, appealing to a broad range of visitors.

With a thriving tourism sector and favorable market conditions, Phoenix remains a compelling choice for short-term rental investors in 2025.

5. Tampa, Florida

Tampa, Florida, renowned for its beautiful Gulf Coast beaches and vibrant cultural scene, has emerged as a promising market for short-term rental investments. The city’s thriving tourism industry, bolstered by attractions like Busch Gardens and the Florida Aquarium, draws millions of visitors annually, increasing demand for vacation rentals. Additionally, Tampa’s expanding economy and population growth further enhance its appeal to investors seeking profitable opportunities in the short-term rental market.✳

Key Market Metrics:

Average Home Value: $374,105
Average Rent: $2,120 per month
Average Daily Rate and Occupancy Rate: $188.5 % and 57% respectively
Estimated Rental Yield: 10.34%
Property Appreciation (5-Year): 46.7%

Why Invest in Tampa?

Strong Short-Term Rental Demand: Tampa’s status as a popular tourist destination ensures a steady stream of visitors seeking short-term accommodations.
Economic Growth: The city’s expanding economy and job market attract new residents, bolstering housing demand.
Cultural and Recreational Attractions: Beyond its natural beauty, Tampa offers diverse cultural events, outdoor activities, and a vibrant nightlife, appealing to a broad range of visitors.

With a thriving tourism sector and favorable market conditions, Tampa remains a compelling choice for short-term rental investors in 2025.

6. Jacksonville, Florida

Jacksonville, Florida, is becoming an attractive market for short-term rental investments. As the largest city in Florida, it offers a mix of urban amenities, coastal attractions, and a growing economy. The city’s affordability, with a steady influx of tourists and new residents, makes it a strong contender for real estate investors. Popular attractions like Jacksonville Beach, the St. Johns River, and professional sports events draw visitors year-round, increasing demand for vacation rentals.

Key Market Metrics:

Average Home Value: $288,709
Average Rent: $1,650 per month
Average Daily Rate and Occupancy Rate: $146.3 % and 51% respectively
Estimated Rental Yield: 9.31%
Property Appreciation (5-Year): 39.5%

Why Invest in Jacksonville?

Affordable Property Prices: Jacksonville’s lower median home prices than other major Florida cities provide a cost-effective entry point for investors.
Strong Rental Demand: A growing population, a thriving job market, and steady tourism—including business travelers and vacationers—drive consistent demand for short-term rentals.
Regulatory Advantages: Jacksonville maintains relatively flexible short-term rental regulations, making it easier for investors to operate in the market.

With a combination of affordability, strong rental demand, and an expanding economy, Jacksonville remains a solid choice for short-term rental investments in 2025.

7. Denver, Colorado

Denver, Colorado, renowned for its picturesque Rocky Mountain backdrop and vibrant cultural scene, has become an increasingly attractive market for short-term rental investments. The city’s robust tourism industry, bolstered by many outdoor activities, arts, and entertainment options, draws millions of visitors annually, increasing the demand for vacation rentals. Additionally, Denver’s growing economy and expanding population further enhance its appeal to investors seeking profitable opportunities in the short-term rental market.

Key Market Metrics:

Average Home Value: $552,056
Average Rent: $2,100 per month
Average Daily Rate and Occupancy Rate: $196.6 % and 63% respectively
Estimated Rental Yield: 8.08%
Property Appreciation (5-Year): 16.9%

Why Invest in Denver?

Thriving Tourism Industry: Denver’s diverse attractions, including its proximity to ski resorts, national parks, and a bustling downtown area, ensure a steady influx of visitors seeking short-term accommodations.
Economic Growth: The city’s expanding job market in sectors like technology, healthcare, and energy attracts new residents, bolstering housing demand and rental opportunities.
Cultural and Recreational Appeal: Beyond its natural beauty, Denver offers a rich array of cultural events, outdoor activities, and a vibrant nightlife, appealing to a broad range of visitors and enhancing the desirability of short-term rentals.

With a thriving tourism sector, strong economic fundamentals, and a dynamic cultural scene, Denver presents a compelling opportunity for short-term rental investors in 2025.

8. Detroit, Michigan

Detroit, Michigan, is transforming remarkably, making it a prime destination for real estate investors seeking long-term rental investments. Once known as the heart of American manufacturing, the city is experiencing economic revitalization, rising home values, and increasing rental demand. With affordable property prices and some of the highest rental yields in the country, Detroit presents a compelling opportunity for investors seeking strong cash flow and long-term appreciation.

Key Market Metrics:

Average Home Value: $73,442
Average Rent: $1,200 per month
Estimated Rental Yield: 19.6%
Property Appreciation (5-Year): 9.7%

Why Invest in Detroit?

High Rental Yields: Detroit offers some of the highest rental yields in the nation, providing investors with strong cash flow potential.
Affordable Entry Point: The relatively low median home prices allow investors to enter the market without significant capital outlay, reducing financial risk.
Market Appreciation: A 5.0% year-over-year increase in home values indicates a positive trend, suggesting potential for future appreciation.
Economic Revitalization: Ongoing urban renewal projects and a growing job market strengthen the local economy, enhancing the city’s appeal to tenants and homeowners alike.

With strong cash flow potential and a combination of affordable housing, high rental yields, and a revitalizing economy, Detroit is a promising destination for real estate investment.

9. Houston, Texas

Houston, Texas, stands out as a prime location for long-term rental investments in 2025. As the fourth-largest city in the United States, Houston boasts a diverse economy driven by energy, healthcare, and technology sectors. This economic diversity fuels a steady population growth, increasing the demand for housing and rental properties. Houston’s affordable cost of living and rich cultural amenities, including renowned museums, theaters, and a vibrant culinary scene, make it an attractive destination for residents and investors alike.

Key Market Metrics:

Average Home Value: $296,625
Average Rent: $1,850 per month
Estimated Rental Yield: 8.37%
Property Appreciation (5-Year): 22.2%

Why Invest in Houston?

Economic Resilience: Houston’s economy is bolstered by strong industries such as healthcare, technology, and green energy, providing a stable foundation for housing demand.
Affordable Housing Market: Compared to other major U.S. cities, Houston offers relatively affordable home prices, allowing investors to enter the market at a lower cost while achieving favorable rental yields.
Population Growth: The city’s expanding population, driven by job opportunities and a high quality of life, ensures a consistent demand for rental properties.

With its robust economy, affordable housing, and growing population, Houston presents a compelling opportunity for long-term rental property investors in 2025.

10. San Antonio, Texas

San Antonio, Texas, is emerging as a compelling market for long-term rental investments in 2025. Known for its rich cultural heritage, affordable living, and steady economic growth, San Antonio attracts a diverse population, including military personnel, healthcare professionals, and students. The city’s vibrant tourism industry, featuring attractions like the Alamo and the River Walk, adds to its appeal, fostering a dynamic housing market with consistent rental demand.

Key Market Metrics:

Average Home Value: $250,675
Average Rent: $1,695 per month
Estimated Rental Yield: 8.12%
Property Appreciation (5-Year): 25.5%

Why Invest in San Antonio?

Affordable Housing Market: San Antonio offers relatively low median home prices compared to other major Texas cities, allowing investors to enter the market at a reasonable cost while achieving attractive rental yields.
Economic Stability: The city’s economy is bolstered by diverse sectors, including military, healthcare, and education, providing a stable foundation for housing demand.
Population Growth: San Antonio’s growing population, driven by job opportunities and a high quality of life, ensures a consistent demand for rental properties.

With its affordable housing, stable economy, and expanding population, San Antonio presents a promising opportunity for long-term rental property investors in 2025.

11. Indianapolis, Indiana

Indianapolis, Indiana, has emerged as a compelling market for long-term rental investments in 2025. The city’s diverse economy, bolstered by healthcare, education, and manufacturing sectors, contributes to a stable job market, attracting new residents and sustaining housing demand. Additionally, Indianapolis offers a high quality of life with numerous parks, museums, and a vibrant sports scene, further enhancing its appeal to potential tenants.

Key Market Metrics:

Average Home Value: $222,887
Average Rent: $1,495 per month
Estimated Rental Yield: 8.06%
Property Appreciation (5-Year): 33.2%

Why Invest in Indianapolis?

Affordable Housing Market: Unlike other major U.S. cities, Indianapolis offers relatively low median home prices, allowing investors to enter the market at a lower cost while achieving favorable rental yields.
Economic Stability: The city’s economy is supported by diverse sectors, including healthcare, education, and manufacturing, providing a stable foundation for housing demand.
Population Growth: Indianapolis’s growing population, driven by job opportunities and a high quality of life, ensures a consistent demand for rental properties.

With its affordable housing, stable economy, and expanding population, Indianapolis presents a compelling opportunity for long-term rental property investors in 2025.

Finance Your US Rental Property on a Budget with HomeAbroad‘s DSCR Loan

With the right financing, investing in rental properties under $500K is possible. A DSCR (Debt Service Coverage Ratio) loan lets you qualify based on your property’s rental income without W-2s, pay stubs, or tax returns.

If your rental income covers the mortgage, you can quickly secure a 30-year fixed DSCR loan to buy or refinance multiple properties, scale your portfolio, and enjoy positive cash flow.

HomeAbroad makes investing seamless with AI-powered property searches, expert real estate guidance, and concierge services for LLC setup, banking, and insurance. Whether you’re a U.S. resident or an international investor, we simplify the process so you can focus on growing your rental income.

Apply for HomeAbroad’s DSCR loan and start your investment journey today!

Frequently asked questions

How much deposit do I need for a 500k property?

You can expect a 20% or more down payment on a home that costs $ 500 K.

What factors must be considered before buying a house in the US for investment purposes?

You can start by researching home markets in populous cities and looking for properties with home features that have a high return on investment (ROI). Additionally, homebuyers should consider home appreciation rates in the area, the cost of living, and homebuyer grants or other incentives when purchasing.

What to look for when buying a house in the U.S.?

When buying a home in the U.S., homebuyers should consider factors such as home appreciation rates, style and amenities, cost of living, home buyer grants or other incentives, and home security systems.

Additionally, homebuyers should inspect for structural issues or potential damage and consider the home’s proximity to local attractions and amenities. Lastly, homebuyers should research the home market in populous cities to find the best home deals.

About the author:

Michele Lawrie, a seasoned real estate professional licensed in New York and Florida, serves as the Chief Real Estate Officer at HomeAbroad. With over 15 years of experience and specialized certifications from the NAR (National Association of Realtors), Michele is a trusted expert for foreign nationals buying US real estate.