Rental property can be a great investment, but some markets offer higher returns than others. Before choosing a city to buy property in, you must carefully evaluate it.
At ABL, we provide long-term rental loans to landlords nationwide. Each deal requires careful underwriting to ensure it’s in our and your best interest. As a result, our local loan officers have deep expertise in evaluating deals.
For fast, flexible rental financing or local market expertise, contact us today. We’re eager to help you choose a profitable market for your next investment and share DSCR rental loan options.
In the meantime, we’ve compiled a list of the top 10 cities for rental investment in 2026, along with what to consider when choosing a market.
What to Consider When Choosing a Rental Market
Here are some of the top metrics to consider when analyzing a rental market:
Average Rental Yield
Rental yield measures a property’s profitability by dividing its annual rental income by its value. Here’s the formula: Rental Yield = Annual Rental Income / Property Value. The higher a city’s average rental yield, the better.
Population Size
Cities with high populations have large tenant pools. This means there will be more potential tenants to fill properties when old tenants leave.
Percentage of Renters
Some of a city’s population will be homeowners. The rest are usually renters. The higher the percentage of renters, the larger your potential tenant pool will be.
Vacancy Rate
Vacancy rate is the percentage of available rental units that are unoccupied at any given time. It’s calculated by dividing the number of vacant units by the total number of units. Here’s the formula: Vacancy Rate = Vacant Units / Total Units. The lower the vacancy rate, the better.
The Top 10 Best Cities for Rental Property Investment in 2026:
1. Houston, TX
| Rental yield | 9.2% |
| Population | 2,300,419 |
| Percentage of renters | 58% |
| Vacancy rate | 10% |
Houston is one of the most diverse and affordable cities in the U.S., attracting renters from all around. It also has the highest rental yield on our list (9.2%).
2. Philadelphia, PA
| Rental yield | 8.85% |
| Population | 1,550,542 |
| Percentage of renters | 48% |
| Vacancy rate | 9% |
Philadelphia is by far the most populous city in Pennsylvania, with over 1.5 million residents. It also has a rich history that attracts millions of visitors each year, making it an ideal market for short-term rentals.
3. Chicago, IL
| Rental yield | 8.12% |
| Population | 2,664,454 |
| Percentage of renters | 54% |
| Vacancy rate | 8% |
Chicago is the third-most populous U.S. city with over 2.6 million residents. It’s also home to the University of Chicago and other colleges that attract thousands of students each year, making it a strong market for student housing.
4. Atlanta, GA
| Rental yield | 8.00% |
| Population | 510,826 |
| Percentage of renters | 52% |
| Vacancy rate | 14% |
Atlanta is the capital and most populous city of Georgia. Its Southern charm and relatively affordable cost of living attract renters from all over.
5. Washington, D.C.
| Rental yield | 7.23% |
| Population | 678,972 |
| Percentage of renters | 61% |
| Vacancy rate | 9% |
Washington, D.C., is the U.S. capital. As a result, it’s home to over 120,000 federal employees on top of other government contractors, many of whom rent.
6. Las Vegas, NV
| Rental yield | 7.00% |
| Population | 660,942 |
| Percentage of renters | 43% |
| Vacancy rate | 7% |
Las Vegas is famous for its nightlife, casinos, and luxury resorts. Though more residents own their homes than rent, there’s a lot of opportunity for short-term rentals.
7. Portland, OR
| Rental yield | 5.99% |
| Population | 630,395 |
| Percentage of renters | 49% |
| Vacancy rate | 5% |
Portland is the largest city in Oregon. Its population is steadily growing, driven partly by its temperate climate, tight-knit culture, and outdoor recreation options. It also has the lowest vacancy rate on our list (5%).
8. New York City, NY
| Rental yield | 4.76% |
| Population | 8,258,035 |
| Percentage of renters | 67% |
| Vacancy rate | 8% |
New York City is by far the most populous city in the U.S., with over 8.2 million residents. It also ties with Miami for the highest percentage of renters (out of cities on our list).
9. Boston, MA
| Rental yield | 4.56% |
| Population | 652,442 |
| Percentage of renters | 64% |
| Vacancy rate | 8% |
Boston is the capital and most populous city of Massachusetts. Its rich colonial history and location on the East Coast make it an attractive destination for workers and visitors.
10. Seattle, WA
| Rental yield | 4.56% |
| Population | 755,081 |
| Percentage of renters | 56% |
| Vacancy rate | 9% |
Seattle is the most populous city in Washington state, with over 750,000 residents. It’s also one of the fastest-growing cities in the U.S., boasting an annual growth rate above 2%.
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Methodology
The top 10 cities for rental investments in 2026 and rental yields were taken from Global Property Guide. Markets in California and Florida were not considered. We ranked the cities by highest rental yield. Population numbers, percentage of renters, and vacancy rates were taken from U.S. Census Bureau data.