Every year, a few data companies publish “best cities for rental investing” lists, and every year a wave of first-time investors uses those lists to decide where to buy their first rental door. I have read these lists for seven years. I have bought one property partly because of one. And the thing I wish someone had told me when I started reading them is what the lists are actually measuring, because it is not what most readers think.
What the lists measure (and what they skip)
The most widely cited rental market rankings come from ATTOM, whose annual single-family rental report covers hundreds of counties and ranks them by potential gross rental yield. The 2025 edition found an average three-bedroom gross rental yield of 7.45% across 361 counties analyzed, and identified 28 “SFR Growth” counties where both wages grew and yields exceeded 10%. The 2026 edition narrowed that to 18 growth counties, with yields declining in about 55% of counties as record-high home prices compress returns.
Those are useful numbers. But gross yield is the top line of a rental investment, not the bottom line, and the gap between them is where most first-time landlords get surprised.
Gross yield is annual rent divided by purchase price. It tells you nothing about vacancy rates, property taxes (which vary wildly between states), insurance costs (which have spiked in disaster-prone states), CapEx burden (which varies by housing stock age), management costs, tenant-landlord law friendliness, or regulatory risk. A county with a 12% gross yield and 14% annual property taxes plus flood insurance may net less than a county with a 7% gross yield and reasonable carrying costs.
The cities that show up every year (and why)
The markets that consistently rank highest on gross-yield lists tend to share a profile. Low median home prices. Rents that are modest in absolute terms but represent a high percentage of purchase price. Older housing stock. Economic bases that are stable but not booming.
Wayne County (Detroit), Cuyahoga County (Cleveland), Shelby County (Memphis), and Suffolk County (New York) have appeared on ATTOM’s list repeatedly across the 2024, 2025, and 2026 reports. Mobile, AL and several upstate New York counties appear frequently as well.
These are real markets with real rental demand. They are also markets with specific characteristics that the yield number alone will not tell you.
Older housing stock. A house that was built in 1950 and has not been significantly updated has a different CapEx profile than one built in 2005. If you are buying into a market because the purchase price is $95,000, the house you are getting at that price is probably 60 to 80 years old, and the CapEx reserve needs to be higher than the standard 8-12% to account for that.
Tenant base. Lower-priced rental markets tend to have higher turnover rates, more payment inconsistency, and occasionally more complex eviction procedures. None of this makes them bad markets. All of it makes the management line heavier than it looks in the spreadsheet.
Regulatory variability. Landlord-tenant law varies enormously by state and sometimes by city. Some of the highest-yield markets also have slower eviction timelines or rent control provisions that can change the economics. A yield list will not tell you this. A conversation with a local property manager will.
The cities that do not show up (and why that does not mean they are bad)
Markets like Austin, Boise, Phoenix, Nashville, and Raleigh rarely appear on gross-yield lists because their purchase prices are high relative to rents. The 1% rule fails on all of them. But many investors have done well in these markets for reasons the yield list does not measure: strong population growth, job market diversification, newer housing stock with lower CapEx burden, favorable landlord-tenant laws, and long-term appreciation that compounds alongside the rent checks.
If your investment thesis is primarily cash flow (you want monthly income from day one), the high-yield markets on the ATTOM list are the right place to look. If your thesis is primarily equity growth with modest cash flow (you want the property to appreciate while covering its costs), the markets that never make the list are often the right answer.
Neither thesis is wrong. Both are incomplete without the other. The important thing is knowing which one you are running.
What I’d skip entirely
Buying in a market you have never visited solely because it ranks high on a list. You will end up managing a property in a city you do not understand, through a property manager you found on the internet, in a neighborhood you have never walked through. This is a recipe for the worst kind of surprise.
Treating any single metric as a filter. Not the 1% rule, not cap rate, not gross yield, not median price. Each one tells you something. None of them tells you enough.
Assuming the list from last year still applies. Of the 28 SFR Growth counties ATTOM identified in 2025, only 18 appeared in 2026. Markets rotate. Data published once a year is a snapshot, not a strategy.
The honest version of the question
The “best city for rental investing” is not on any list. It is the city where you understand the tenant pool, the housing stock, the carrying costs, and the local rules well enough to run honest numbers and still want to buy. For most first-time investors, that city is the one they live in or near, not one they found in a ranking. The ranking is a starting point for research. It is not a verdict.
I bought my first rental in the metro area where I already lived, for exactly this reason. It was not the highest-yield market on any list. It was the market I understood well enough to know what I was buying, and seven years later that understanding has been worth more than an extra two percentage points of gross yield would have been.