Top Real Estate Investment Locations for 2025

INVESTMENT

By: Valorine

Real estate investors can find opportunities in up and down markets, and 2025 has much promise.

The real estate market in 2025 offers a unique blend of opportunities for investors, but also challenges.

Mortgage rates remain high, albeit below where they were this time last year. Between investor concerns, a potential recession and the specter of inflation caused by President Donald Trump’s tariffs, it’s anyone’s guess where rates go from here.

That said, there are still places with good investment potential. Whether you’re looking to purchase residential properties, explore auctions or diversify with real estate funds, understanding where and how to invest is crucial for maximizing your returns. Here are five of the best places to invest in real estate in 2025, according to experts:

• Vacation-oriented second homes.
• Buffalo, New York.
• Indianapolis, Indiana.
• Properties bought at auction.
• Real estate funds.

Vacation-Oriented Second Homes

Seldom in life can we have our cake and eat it too. But with vacation homes, you may be able to have your cake and generate income on it when you’re not eating it too. The premise is also simple on the surface: Buy a property somewhere you enjoy spending time, then rent it out when you’re not there.

“Vacation locations, as a result of the pandemic, have seen parabolic increases in values,” says Wil Ward, managing director at TwinFocus Real Estate Partners. However, “this is obviously location dependent.”

He says areas that have seen strong value increases include: points to Jackson Hole, Wyoming; Santa Fe, New Mexico; Cape May, New Jersey; Volusia County, Florida; Brunswick County, North Carolina and Jefferson County, Colorado.

Finding a home outside of your primary residence state can also add geographic diversification to your portfolio.

“Since homes tend to be the largest investment for a large swath of retail investors, increasing their exposure to one particular market may not make sense,” Ward says. “While purchasing an investment property in the same town, or the next town over, may be easier to manage, there are potential portfolio-level risks of increasing local exposure.”

You might consider locations with friendly tax regimes. For example, New Hampshire, where there are no income taxes, instead of Maine. “Because people will be attracted to New Hampshire if rates in other states go higher, real estate should be one of the beneficiaries,” Ward says.

Or you can look abroad to places like Portugal or Greece, which have lower income tax and wealth tax than countries like Spain. Both are also a beautiful place to visit, “which will always attract people and the demand for housing,” Ward says. “Plus the exposure to the euro vis-à-vis the U.S. (dollar) is attractive as well.”