Finding Hidden Gems: The Best Village Real Estate Markets for Investment

When considering a rental investment, most prospective buyers automatically assume big cities are where the best returns on investment lie.  The truth of the matter is, there are dozens of small towns, hamlets and villages that offer exceptional investment opportunities for those seeking big city alternatives.

Whether catering to long term renters looking to escape the hustle and bustle of metropolitan areas or vacationers wanting to getaway, small town alternatives are a lucrative option.  Below we will take a look at some hidden gems that offer amazing investment opportunities.

Why Invest in Small Towns vs. Big Cities?

Image credit: SafeWise

Before we dive into the plethora of small town rental opportunities, you may be wondering why investors would want to consider these potentially remote or rural areas for investing.  Well, here are just a few of the reasons:

Remote work:

The pandemic has shifted so many aspects of daily life over the last three years, and one of the largest impacts it had was on where people work.  For many organizations, remote work has become the norm and employees have found they don’t need to be in a main office in order to do their job.  As such, workers are relocating away from large cities, leading to increased demand for rental properties in suburban or rural areas.

Affordability:

With more competition for rental units in larger cities, prices can quickly become inflated and rapidly climb out of reach for prospective renters. Smaller towns offer more affordable options – with less competition for rental units, landlords are able to set more attractive rates that make the investment even more lucrative.

Peace and Quiet:

Another contributing factor to the rise in small town or rural rentals is the ability to enjoy life nestled near beautiful parks, open spaces and amongst outdoor settings.  Escaping the congestion of large cities can be a welcomed change for renters, and the resulting demand for these areas are only increasing.

The Best Village Real Estate Markets to Invest In

Now that we’ve discussed why small towns make great investment opportunities, let’s take a look at some of the best markets in which to invest:

Bozeman, Montana

Home to Montana State University, Bozeman is a haven for tech-savvy entrepreneurs, outdoor enthusiasts and college students alike.  While real estate is on the higher end (median price of $835K) investors have the opportunity to tap into the student rental market that is both steady and reliable.

Port Townsend, Washington

This picturesque small town on the Olympic Peninsula is a popular tourist destination for nature lovers and outdoor adventure seekers.  Properties in this area have seen an average increase of 8.55% annually, with prices around $690K it’s still within reach for many investors.

Williams Bay, Wisconsin

Located on Geneva Lake in the Southern tip of Wisconsin, Williams Bay offers a great opportunity for vacation rental investors.  With lake homes and cottages available at an average price point of $500K, it’s no wonder this community has become a hot spot for investors looking to tap into the tourism market.

Kaysville, Utah

With its small town charm, Kaysville is located in a great spot close to both Salt Lake City and Provo.  With an average rental price of $1,800/month landlords are able to enjoy steady returns while still offering competitive prices for renters.

As you can see there are a number of great small town opportunities for investors looking to take advantage of the growing demand in these areas.  Whether you’re looking for long term renters, vacation rentals or just want to invest in a community with huge potential, there are many advantages to investing in small towns.

Things to Consider for Small Town Investing

Now that you are aware of the excellent investment opportunities in smaller towns and villages throughout the country, there are a few things you should consider before taking the plunge:

Know your Target Demographic – Before you invest, it’s important to understand who your target demographic will be.  Are they young professionals looking for a quiet place to live?  Are they retirees looking for a peaceful retirement community?  Or are they families seeking an affordable option?  If you are looking to capitalize on an idyllic vacation spot, you’ll need to consider the size of your services and what amenities will be needed to attract visitors.

Research Local Markets – Do your due diligence and research the local real estate market to get an idea of what’s hot and what’s not.  This will help you identify potential investment opportunities and target areas with potential for growth.

Understand the Rental Market – Before investing, it’s important to understand the local rental market and what potential tenants are looking for – from amenities to location, pricing and other factors that can affect demand.

Work with a Local Realtor – Partnering with a local real estate agent is the best way to gain access to local opportunities and get invaluable insight into the market.  Not only will they be able to help you find the best deals, but they can also provide valuable advice and guidance in navigating a new market.

Find a Reliable Property Manager – Finding a reliable property manager who understands the local markets is essential for successful long-term investments.  Property managers can help investors identify suitable properties and market them to the right target audience, which result in higher returns on investment .

Small town investments are quickly becoming popular options for investors, and with the many amazing villages and hamlets dotted throughout the country, it is easy to see why.  By opening up the possibilities, investors are offered more options, allowing them to expand their portfolios and diversify their investments while still enjoying the benefits of small town living.  With careful consideration and proper research, investors can find great opportunities in these small towns and villages – creating a win-win for both landlords and tenants.