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 was the biggest city to make the list. The city 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.
New York real estate investment
In the state of New York, the best place to invest in real estate is New York County. Home to the Big Apple, New York County has a pretty low rate of business growth of 2.1 percent, but a whopping $16.079 billion in GDP growth. The county received an Incoming Investment Index of 62.74 and 14.3 new building permits per 1,000 homes.
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Kings, Queens, Saratoga and Ontario counties finished up the top five in New York. The majority of the best investment counties are located around the same place, which is near New York City. However, investment opportunities are throughout the state.
The largest number of new building permits were seen in Kings County, which had 25.7 building permits per 1,000 homes.
