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

Buying a rental property in the U.S. can be a game-changer, whether you’re 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—there are still great investment opportunities under $500K if you know where to look.

I’ve researched 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 where your investment can work hard for you.

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—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 steady cash flow, the right market can make all the difference.

At HomeAbroad, we’ve helped investors through these challenges—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, there are still plenty of opportunities.

The key is taking a smart approach—exploring the right cities, monitoring market trends, and using the best financing options to make the most of 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 right 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!

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 [Nashville, TN Housing Market: Zillow]
• Average Rent: $2,195 per month [Rental Data, Nashville, TN: Zillow]
• Average Daily Rate and Occupancy Rate: $350.8 and 54% respectively [Short-Term Rental Data, Nashville, TN: Airdna]
• Estimated Rental Yield: 15.88%

Why Invest in Nashville?

1. Strong Short-Term Rental Demand: Nashville’s status as a major tourist destination ensures consistent demand for short-term rentals.
2. Economic Growth: The city’s expanding economy and job market attract new residents, bolstering housing demand.
3. 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 [Orlando, FL Housing Market: Zillow]
• Average Rent: $2,043 per month [Rental Data, Orlando, FL: Zillow]
• Average Daily Rate and Occupancy Rate: $239.6 and 54% respectively [Short-Term Rental Data, Orlando, FL: Airdna]
• Estimated Rental Yield: 12.26%

Why Invest in Orlando?

1. Strong Short-Term Rental Demand: Orlando’s status as a top tourist destination ensures a steady stream of visitors seeking short-term accommodations.
2. Economic Growth: The city’s expanding economy and job market attract new residents, bolstering housing demand.
3. 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 [Las Vegas, NV Housing Market: Zillow]
• Average Rent: $1,738 per month [Rental Data, Las Vegas, NV: Zillow]
• Average Daily Rate and Occupancy Rate: $288.8 % and 49% respectively [Short-Term Rental Data, Las Vegas, NV: Airdna]
• Estimated Rental Yield: 11.94%

Why Invest in Las Vegas?

1. Strong Short-Term Rental Demand: Las Vegas’s status as a top tourist destination ensures a steady stream of visitors seeking short-term accommodations.
2. Economic Growth: The city’s expanding economy and job market attract new residents, bolstering housing demand.
3. 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 [Phoenix, AZ Housing Market: Zillow ]
• Average Rent: $1,990 per month [Rental Data, Phoenix, AZ: Zillow]
• Average Daily Rate and Occupancy Rate: $232.2 % and 55% respectively [Short-Term Rental Data, Phoenix, AZ: Airdna]
• Estimated Rental Yield: 11.14%

Why Invest in Phoenix?

1. Strong Short-Term Rental Demand: Phoenix’s status as a popular tourist destination ensures a steady stream of visitors seeking short-term accommodations.
2. Economic Growth: The city’s expanding economy and job market attract new residents, bolstering housing demand.
3. 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 [Tampa, FL Housing Market: Zillow]
• Average Rent: $2,120 per month [Rental Data, Tampa, FL: Zillow]
• Average Daily Rate and Occupancy Rate: $188.5 % and 57% respectively [Short-Term Rental Data, Tampa, FL: Airdna]
• Estimated Rental Yield: 10.34%

Why Invest in Tampa?

1. Strong Short-Term Rental Demand: Tampa’s status as a popular tourist destination ensures a steady stream of visitors seeking short-term accommodations.
2. Economic Growth: The city’s expanding economy and job market attract new residents, bolstering housing demand.
3. 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 [Jacksonville, FL Housing Market: Zillow]
• Average Rent: $1,650 per month [Rental Data, Jacksonville, FL: Zillow]
• Average Daily Rate and Occupancy Rate: $146.3 % and 51% respectively [Short-Term Rental Data, Jacksonville, FL: Airdna]
• Estimated Rental Yield: 9.31%

Why Invest in Jacksonville?

1. Affordable Property Prices: Jacksonville’s lower median home prices than other major Florida cities provide a cost-effective entry point for investors.
2. 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.
3. 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 [Denver, CO Housing Market: Zillow]
• Average Rent: $2,100 per month [Rental Data, Denver, CO: Zillow]
• Average Daily Rate and Occupancy Rate: $196.6 % and 63% respectively [Short-Term Rental Data, Denver, CO: Airdna]
• Estimated Rental Yield: 8.08%

Why Invest in Denver?

1. 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.
2. Economic Growth: The city’s expanding job market in sectors like technology, healthcare, and energy attracts new residents, bolstering housing demand and rental opportunities.
3. 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 [Detroit, MI Housing Market]
• Average Rent: $1,200 per month [Rental Data, Detroit, MI: Zillow]
• Estimated Rental Yield: 19.6%

Why Invest in Detroit?

1. High Rental Yields: Detroit offers some of the highest rental yields in the nation, providing investors with strong cash flow potential.
2. Affordable Entry Point: The relatively low median home prices allow investors to enter the market without significant capital outlay, reducing financial risk.
3. Market Appreciation: A 5.0% year-over-year increase in home values indicates a positive trend, suggesting potential for future appreciation.
4. 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 [Houston, TX Housing Market: Zillow]
• Average Rent: $1,850 per month [Rental Data, Houston, TX: Zillow]
• Estimated Rental Yield: 8.37%

Why Invest in Houston?

1. Economic Resilience: Houston’s economy is bolstered by strong industries such as healthcare, technology, and green energy, providing a stable foundation for housing demand.
2. 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.
3. 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 San Antonio, TX Housing Market: Zillow]
• Average Rent: $1,695 per month [Rental Data, San Antonio, TX: Zillow]
• Estimated Rental Yield: 8.12%

Why Invest in San Antonio?

1. 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.
2. Economic Stability: The city’s economy is bolstered by diverse sectors, including military, healthcare, and education, providing a stable foundation for housing demand.
3. 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 [Indianapolis, IN Housing Market: Zillow]
• Average Rent: $1,495 per month [Rental Data, Indianapolis, IN: Zillow]
• Estimated Rental Yield: 8.06%

Why Invest in Indianapolis?

1. 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.
2. Economic Stability: The city’s economy is supported by diverse sectors, including healthcare, education, and manufacturing, providing a stable foundation for housing demand.
3. 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.

Buy an Affordable Home in the U.S. with HomeAbroad

Owning a home in the U.S. for under $500K is still within reach—you need the right approach! The key is choosing the best location, understanding property taxes, and prioritizing the features that matter most to you.

At HomeAbroad, we make home buying easy, stress-free, and accessible for both U.S. residents and international buyers. Our platform provides:

• AI-powered property search to match you with the best homes in your budget
• Tailored mortgage solutions, including foreign national loans
• A network of 500+ expert real estate agents for personalized guidance
• Comprehensive concierge services, from LLC setup to U.S. bank accounts & insurance

No matter where you’re buying from, HomeAbroad helps you navigate the process seamlessly. Start your home search today and turn your dream of owning a U.S. home into reality with HomeAbroad!

Frequently asked questions

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.

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