Investing in real estate can have big rewards, but also big risks. When calculating the next place to look for an investment property or aiding a client in the hunt, it’s important to consider local economic conditions like business growth, new building permits and gross domestic product (GDP) growth.
SmartAsset recently released its second annual list of the top counties for real estate investment based on the investment in the local community, measuring growth conditions for four specific components, all of which were measured equally and combined to find the final ranking of cities.
The final ranking is the Incoming Investment Index, and the county with the largest gain of investment received a 100. The county with the lowest amount of incoming investment had an index of 0.
For the second year in a row, Williams in North Dakota ranked as the top county in the country for investment. The community saw a 37.7 percent growth in businesses since 2015, $664 million in GDP growth and a perfect 100 for its Incoming Investment Index. Williams also had 61.5 new building permits per 1,000 homes.
Texas was a big state on the list with five of its cities ranking in the top 10. Harris ranked no. 2, followed by Collin at no. 4, Travis at no. 7, Fort Bend at no. 8 and Dallas at no. 10.
Ranking no. 5, Los Angeles County held the biggest city to make the list. The county saw 5.6 percent growth in business and $44.614 billion in GDP growth.
Business establishment growth was measured over a three-year period, during which county-wide new businesses were considered. GPD growth was adjusted with inflation. Local residential real estate building and new permits were calculated per 1,000 homes. Municipal bond debt that was raised in the last five years was divided by the population number.
Florida real estate investment
According to SmartAsset, real estate investors will have the best luck in Osceola County in central Florida, which had 10.9 percent business growth and an Incoming Investment Index of 73.18. St. Johns, Sumter, Walton and Nassau counties rounded out the top five.
The best counties to invest in Florida were divided evenly around the state.
Miami-Dade County made the list at no. 9. The county had 7.5 percent business growth and 12.7 new building permits per 1,000 households for an Incoming Investment Index of 43.38. The county did have the highest GDP growth reported in the state’s top 10, at $7.848 billion.
Sumter County had the highest business growth in the state, at 17.9 percent, and it also had 26.8 new building permits per 1,000 homes.
The state of Florida as a whole had 3.8 percent business growth and $758 million in GDP growth. The state also had 9.6 new building permits per 1,000 homes.
