Introduction

Investing in rental properties can be a lucrative endeavor, but success in this field hinges on choosing the right property in the right location. A good rental property combines several factors, including affordability, rental yield, tenant demand, and potential for appreciation. Among these, location plays a pivotal role. The right location attracts quality tenants, ensures steady rental income, and enhances the property's value over time. In this guide, we will explore some of the best neighborhoods in Iowa for rental property investment, evaluating each area based on convenience, tourist attractions, things to do, average home prices, return on investment, proximity to work-related travel, and the unique 'x-factor' that makes each area stand out.

Best Neighborhoods for Rental Properties in Iowa

1. Downtown Des Moines, Des Moines

Grades:

• Convenience: A
• Tourist Attractions: B+
• Things to Do: A
• Average Home Prices: C+
• Return on Investment: B
• Proximity to Work-Related Travel: A
• X-Factor: A

Details:

• Convenience: A
  Downtown Des Moines offers excellent convenience with a robust public transportation system, easy access to major highways, and a plethora of amenities within walking distance. Residents can find everything from grocery stores to fitness centers, making it a highly desirable location for tenants.
• Tourist Attractions: B+
  While not as tourist-heavy as some other cities, Downtown Des Moines boasts attractions like the Iowa State Capitol, the Des Moines Art Center, and the Greater Des Moines Botanical Garden. These sites draw visitors and contribute to the area's vibrant atmosphere.
• Things to Do: A
  Residents and visitors alike enjoy a wide range of activities in Downtown Des Moines. The area is known for its lively nightlife, diverse dining options, shopping centers, and cultural events. The presence of the Wells Fargo Arena and Principal Park also means there are always sports events to attend.
• Average Home Prices: C+
  The average home prices in Downtown Des Moines are relatively higher compared to other areas in Iowa, but the potential for rental income justifies the investment. As of the latest data, the average home price is around $250,000.
• Return on Investment: B
  Given the higher demand for rental properties in urban areas, Downtown Des Moines offers a decent return on investment. Rental yields are competitive, and the area's growth prospects are promising.
• Proximity to Work-Related Travel: A
  Downtown Des Moines is home to numerous corporate headquarters, government offices, and the Iowa Events Center, making it ideal for professionals who require easy access to work-related travel. The Des Moines International Airport is also just a short drive away.
• X-Factor: A
  What sets Downtown Des Moines apart is its urban charm combined with Midwestern friendliness. The area is undergoing significant revitalization, adding new attractions and modern amenities while preserving its historical character.

2. Iowa City Downtown, Iowa City

Grades:

• Convenience: A-
• Tourist Attractions: B
• Things to Do: A
• Average Home Prices: B
• Return on Investment: B+
• Proximity to Work-Related Travel: B+
• X-Factor: A

Details:

• Convenience: A-
  Iowa City Downtown offers excellent convenience with numerous amenities close by, including grocery stores, libraries, and public transport. The University of Iowa campus adds to the area's accessibility and vibrancy.
• Tourist Attractions: B
  While not a primary tourist destination, Iowa City Downtown features attractions like the Old Capitol Museum, Iowa Avenue Literary Walk, and the University of Iowa Museum of Art. These cultural sites add to the charm and appeal of the area.
• Things to Do: A
  The presence of the University of Iowa ensures a dynamic atmosphere with a wide variety of activities. There are numerous cafes, bars, bookstores, and music venues, making it a lively place to live.
• Average Home Prices: B
  Home prices in Iowa City Downtown are relatively affordable, with the average price around $220,000. This makes it an attractive option for investors looking for a balance between cost and rental income potential.
• Return on Investment: B+
  The student population from the University of Iowa provides a steady demand for rental properties, ensuring good rental yields. The potential for property appreciation also contributes to a solid return on investment.
• Proximity to Work-Related Travel: B+
  While not a major business hub, Iowa City Downtown is well-connected to other parts of the state via major highways. The Eastern Iowa Airport in nearby Cedar Rapids adds convenience for work-related travel.
• X-Factor: A
  The unique 'x-factor' of Iowa City Downtown is its vibrant literary and artistic community. As a UNESCO City of Literature, it attracts scholars, writers, and artists, fostering a culturally rich environment.

3. Cedar Falls Downtown, Cedar Falls

Grades:

• Convenience: B+
• Tourist Attractions: B
• Things to Do: B+
• Average Home Prices: A-
• Return on Investment: B
• Proximity to Work-Related Travel: B
• X-Factor: B+

Details:

• Convenience: B+
  Cedar Falls Downtown offers good convenience with essential services and amenities within reach. The area is pedestrian-friendly and has a reliable public transport system.
• Tourist Attractions: B
  Attractions in Cedar Falls Downtown include the Cedar Falls Historical Society, the Ice House Museum, and the Gallagher Bluedorn Performing Arts Center. These spots add cultural and historical value to the area.
• Things to Do: B+
  The area features a variety of activities, including shopping, dining, and entertainment options. There are numerous parks and recreational facilities, as well as community events that keep the area lively.
• Average Home Prices: A-
  Cedar Falls Downtown boasts affordable home prices, with the average price around $200,000. This affordability makes it an attractive option for investors.
• Return on Investment: B
  The rental market is steady in Cedar Falls Downtown, with good demand from both families and professionals. The relatively low entry cost combined with decent rental yields ensures a satisfactory return on investment.
• Proximity to Work-Related Travel: B
  While not a major commercial center, Cedar Falls Downtown is well-connected via highways, and the Waterloo Regional Airport is nearby, offering some convenience for work-related travel.
• X-Factor: B+
  The unique aspect of Cedar Falls Downtown is its strong sense of community and its emphasis on local businesses and culture. The downtown area has a charming, small-town feel with the amenities of a larger city.

4. West Des Moines, Des Moines

Grades:

• Convenience: A
• Tourist Attractions: B-
• Things to Do: B+
• Average Home Prices: B
• Return on Investment: B+
• Proximity to Work-Related Travel: A-
• X-Factor: B+

Details:

• Convenience: A
  West Des Moines offers high convenience with numerous shopping centers, restaurants, and services. The area is well-connected with extensive public transport and major highways.
• Tourist Attractions: B-
  While not a primary tourist spot, West Des Moines offers attractions such as the Jordan Creek Town Center and the Valley Junction Historic District. These areas provide shopping, dining, and entertainment options.
• Things to Do: B+
  West Des Moines has a variety of activities, from parks and golf courses to shopping and dining. The presence of several fitness centers and community events also adds to the area's appeal.
• Average Home Prices: B
  Home prices in West Des Moines are moderate, with the average home price around $240,000. This balance of cost and amenities makes it an attractive investment location.
• Return on Investment: B+
  West Des Moines offers good rental yields, with a steady demand from families and professionals. The potential for property appreciation also contributes to a favorable return on investment.
• Proximity to Work-Related Travel: A-
  The area's proximity to major business centers and the Des Moines International Airport makes it convenient for professionals. The presence of several corporate offices adds to the area's attractiveness.
• X-Factor: B+
  West Des Moines stands out for its suburban comfort combined with urban amenities. The area's planned communities and modern infrastructure make it a desirable place to live and invest in.

5. Cedar Rapids NewBo District, Cedar Rapids

Grades:

• Convenience: B+
• Tourist Attractions: B
• Things to Do: B+
• Average Home Prices: B
• Return on Investment: B
• Proximity to Work-Related Travel: B+
• X-Factor: A-

Details:

• Convenience: B+
  The NewBo District in Cedar Rapids offers good convenience with various amenities and services close by. The area is pedestrian-friendly and has a decent public transport system.
• Tourist Attractions: B
  Attractions in the NewBo District include the NewBo City Market and the African American Museum of Iowa. These spots provide cultural and historical significance to the area.
• Things to Do: B+
  The NewBo District is known for its vibrant arts and culture scene, with numerous galleries, theaters, and live music venues. The area also hosts a variety of festivals and community events.
• Average Home Prices: B
  Home prices in the NewBo District are moderate, with the average price around $230,000. This affordability combined with the area's amenities makes it a good investment option.
• Return on Investment: B
  The rental market in the NewBo District is strong, with good demand from young professionals and families. The potential for property appreciation also contributes to a satisfactory return on investment.
• Proximity to Work-Related Travel: B+
  The NewBo District is well-connected to other parts of Cedar Rapids and the Eastern Iowa Airport is nearby, offering convenience for work-related travel.
• X-Factor: A-
  The unique 'x-factor' of the NewBo District is its emphasis on community and creativity. The area is a hub for local artisans, entrepreneurs, and cultural events, making it a vibrant and desirable place to live.

Conclusion

Investing in rental properties in Iowa offers diverse opportunities across various neighborhoods. Each area has its unique strengths and potential, from the urban charm of Downtown Des Moines to the cultural richness of Iowa City Downtown. By considering factors such as convenience, tourist attractions, activities, home prices, return on investment, proximity to work-related travel, and the unique 'x-factor' of each location, investors can make informed decisions to unlock the full potential of their rental property investments in Iowa.