West Liberty is home to the best residential real estate investment market in Kentucky.
The 41472 zip code in West Liberty presents the greatest opportunity for the best real estate investments among the 780 individual real estate markets in Kentucky we evaluated. We looked at property values, population trends, and six other metrics for each market. We used that data to calculate each market's InvestScore.
5 best places to invest in Kentucky
| Rank | City | InvestScore | Affordability | Property value appreciation |
|---|---|---|---|---|
| 1 | West Liberty | 100 | 2.1 | 67.14% |
| 2 | Louisville | 97.4 | 2.1 | 82.73% |
| 3 | Tompkinsville | 94.4 | 2.4 | 77.24% |
| 4 | Clay City | 94 | 3.3 | 75.70% |
| 5 | Greenville | 93.6 | 1.9 | 46.57% |
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1. West Liberty
We've identified the 41472 zip code in West Liberty as Kentucky's best real estate investment market. Here's why.
🔎 Key data about West Liberty
| Data point | Value | Rank in state (of 780 markets) |
|---|---|---|
| Zip code | 41472 | N/A |
| InvestScore | 100 | Highest |
| Typical property value | $99,528[1] | 17th lowest |
| Five-year appreciation | 67.14%[2] | 21st highest |
| Household income | $46,917[3] | 146th highest |
| Affordability ratio | 2.1 | 11th most affordable |
| Five-year population growth | 1.8%[4] | 96th highest |
| Unemployment rate | 3.4%[5] | 41st lowest |
| Property taxes | $852[6] | 45th lowest |
| Educational attainment | 16.9%[7] | 132nd highest |
West Liberty (zip code 41472) is the best residential real estate investment market in Kentucky. It has the 21st highest property value appreciation among markets we evaluated, with a 67.14% appreciation of the typical property over the last five years.
West Liberty is the 11th most affordable market among the 780 Kentucky markets we evaluated, with an affordability ratio of 2.1.
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2. Louisville
The 40210 zip code in Louisville is the runner-up spot for the best real estate investments in Kentucky.
🔎 Key data about Louisville
| Data point | Value | Rank in state (of 780 markets) |
|---|---|---|
| Zip code | 40210 | N/A |
| InvestScore | 97.4 | 2nd highest |
| Typical property value | $71,687[8] | 2nd lowest |
| Five-year appreciation | 82.73%[9] | 3rd highest |
| Household income | $34,440[10] | 183rd highest |
| Affordability ratio | 2.1 | 10th most affordable |
| Five-year population growth | 11.6%[11] | 17th highest |
| Unemployment rate | 11.1%[12] | 188th lowest |
| Property taxes | $641[13] | 16th lowest |
| Educational attainment | 9.1%[14] | 192nd highest |
The 40210 zip code in Louisville features a typical property value of $71,687, the 2nd lowest in the state.
Property values have appreciated 82.73% over the past five years, the 3rd highest increase among evaluated markets in the state. Louisville homes have an affordability ratio of 2.1, the 10th most affordable in the state.
3. Tompkinsville
The 42167 zip code in Tompkinsville comes in at No. 3 in our ranking of the best residential real estate investment markets in Kentucky.
🔎 Key data about Tompkinsville
| Data point | Value | Rank in state (of 780 markets) |
|---|---|---|
| Zip code | 42167 | N/A |
| InvestScore | 94.4 | 3rd highest |
| Typical property value | $109,392[15] | 23rd lowest |
| Five-year appreciation | 77.24%[16] | 7th highest |
| Household income | $44,767[17] | 158th highest |
| Affordability ratio | 2.4 | 29th most affordable |
| Five-year population growth | 6.1%[18] | 51st highest |
| Unemployment rate | 6.2%[19] | 139th lowest |
| Property taxes | $851[20] | 44th lowest |
| Educational attainment | 15.1%[21] | 146th highest |
With a typical property value of $109,392, Tompkinsville's 42167 zip code features the 23rd lowest property values in the state.
Tompkinsville homes have an affordability ratio of 2.4, the 29th most affordable among the markets we evaluated.
4. Clay City
The 40312 zip code in Clay City ranks No. 4 among Kentucky's residential real estate investment markets.
🔎 Key data about Clay City
| Data point | Value | Rank in state (of 780 markets) |
|---|---|---|
| Zip code | 40312 | N/A |
| InvestScore | 94 | 4th highest |
| Typical property value | $115,628[22] | 28th lowest |
| Five-year appreciation | 75.70%[23] | 12th highest |
| Household income | $35,270[24] | 12th highest |
| Affordability ratio | 3.3 | 95th most affordable |
| Five-year population growth | 18.1%[25] | 6th highest |
| Unemployment rate | 4.3%[26] | 76th lowest |
| Property taxes | $628[27] | 14th lowest |
| Educational attainment | 14.9%[28] | 149th highest |
Property values in Clay City's 40312 zip code have seen the 12th highest increase among evaluated markets in the state, with an appreciation of 75.70% over the past five years.
Clay City's affordability ratio of 3.3 makes it the 95th most affordable among the 780 markets we evaluated.
5. Greenville
The 42345 zip code in Greenville rounds out our top five residential real estate investment markets in Kentucky.
🔎 Key data about Greenville
| Data point | Value | Rank in state (of 780 markets) |
|---|---|---|
| Zip code | 42345 | N/A |
| InvestScore | 93.6 | 5th highest |
| Typical property value | $128,413[29] | 38th lowest |
| Five-year appreciation | 46.57%[30] | 108th highest |
| Household income | $67,172[31] | 108th highest |
| Affordability ratio | 1.9 | 6th most affordable |
| Five-year population growth | 3.0%[32] | 80th highest |
| Unemployment rate | 2.8%[33] | 21st lowest |
| Property taxes | $1,011[34] | 68th lowest |
| Educational attainment | 20.3%[35] | 103rd highest |
Property values in Greenville's 42345 zip code rose 46.57% over the last five years, ranking the city 108th highest among evaluated markets in Kentucky.
Greenville homes have an affordability ratio of 1.9, the 6th most affordable among the markets we evaluated.
Investing in residential real estate can be one of the best passive real estate investments in Kentucky.
Residential real estate offers accessible passive income and the potential to compound your original investment.
Renting out residential units is the top way to invest in real estate. House hacking also offers a great opportunity for passive real estate investment income.
How we rank residential real estate markets in Kentucky
To determine the best real estate investments in Kentucky we evaluated 780 markets on eight metrics, and then assigned an InvestScore based on their weighted and combined rankings. Each market corresponds to a specific zip code in Kentucky.
What is InvestScore?
InvestScore is a score on a scale of 0 (worst in state) to 100 (best in state) that estimates the residential real estate investment potential of a given market. It takes into account a suite of key data points for each city.
- Typical property value: This measures the typical home value in this zip code, according to the Zillow Home Value Index. It reflects the typical value for homes in the 35th to 65th percentile range, including all homes, with the numbers smoothed and seasonally adjusted. We prefer lower property values, which indicate both more room for growth and a greater ease of purchase. We assign a weight of 20% to typical property values.
- Property value appreciation: This measures how much property values have increased in the area over the past five years, according to the Zillow Home Value Index. We prefer a higher appreciation, as it indicates better returns on housing. However, past performance isn't indicative of future results. We assign a weight of 20% to property value appreciation.
- Median household income: This is the inflation-adjusted median household income in the zip code, according to U.S. Census American Community Survey data. We prefer a higher household income, as it indicates local residents have more income to spend on housing. We assign a weight of 10% to median household income.
- Affordability ratio: This is the ratio of the typical home value to the median household income in the area. A lower ratio is better because it means more households can afford a home, which indicates higher demand. We assign a weight of 15% to the affordability ratio.
- Population growth: This is how much the area's population has grown over the past five years, according to U.S. Census estimates. Higher is better, as it indicates residents are moving into the area at a rapid clip. We assign a weight of 10% to population growth.
- Unemployment rate: This is the unemployment rate in the area, according to U.S. Census data. We prefer a lower rate, as it indicates the availability of steady employment in the area, meaning residents will find it much easier to afford homes. We assign a weight of 15% to unemployment rate.
- Property tax: This is the median real estate property tax paid in the area, according to U.S. Census estimates. We assign a weight of 10% to property tax.
- Educational attainment: This is the percentage of residents in the area that have obtained a bachelor's degree or better, according to U.S. Census estimates. We prefer a higher rate because it indicates local residents who have higher earning potential and thus should be able to afford homes. We assign a weight of 15% to educational attainment.
🚨 Disclaimer: The information contained in this article isn't intended as, and shall not be understood or constituted as, financial advice. The information in this article isn't a substitute for financial advice from an investment professional or real estate agent who is aware of the facts and circumstances of your financial situation or the specifics of any individual property.
