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Top 5 Best Real Estate Investment Markets in Kentucky

Savvy real estate investors have started focusing their attention away from the Coasts and to states like Kentucky which offer better price appreciation and lower-priced housing. If you’ve thought about investing in Kentucky, which are the best cities for investors?
Savvy real estate investors have started focusing their attention away from the Coasts and to states like Kentucky which offer better price appreciation and lower-priced housing. If you’ve thought about investing in Kentucky, which are the best cities for investors?

With unaffordable home prices and markets where bargains are hard to find, many investors are turning their attention away from the Coasts and towards the middle of the country. If you’re thinking about starting or expanding your real estate investment portfolio, Kentucky should be on your radar.

Kentucky is a landlord-friendly state. If your tenant has been delinquent on their rent just once in the past six months, you can file an unconditional quit notice to have them evicted. You can recover lawyer and court fees if you have to evict a tenant and have up to sixty days to return a security deposit.

While a local real estate agent will have the inside scoop on the best cities and neighborhoods for investing in Kentucky, here are the top five places to start.

Louisville

Louisville investors can draw on both a large student market and a military market when renting, which offers some protection against an economic downturn. The city has benefited from steady population growth and the consolidation of Louisville and Jefferson County.

Median home values are $160,000 and have gone up 4.9% year over year. Median household income is $44,806, and unemployment is low. The average rents are around a thousand dollars and rose a whopping 10.0% over last year. The city offers investors both price appreciation and good rental income.

Lexington

Located in central Kentucky, Lexington has the most thoroughbred horse farms in the world. It draws many tourists to the races and the farms and could be an excellent place for an Airbnb. It’s also home to the University of Kentucky, and multi-family properties near campus will always find student renters.

Median home values in Lexington are slightly more expensive than Louisville, at $182,600. They rose 5.2% in 2018 and will rise another 3.6% in 2019. Average rents are just under a grand a month, however. This may be a better city for a fix and flip than a rent and hold investor.

Fort Thomas

Fort Thomas is in northern Kentucky, near Ohio. Its proximity to another state means that you can draw from residents of both areas when you’re trying to sell or rent.

Fort Thomas has one of the highest home values of cities on this list, with median home values at $218,400. Because it’s so close to Cincinnati, the rental market spills between Ohio and Kentucky. Rents range up to $1,500 a month, depending on the size and the number of bedrooms, and rents grew 12% last year.

Owensboro

Owensboro has excellent schools, which leads young families to move to the area. The beautiful riverfront and gorgeous parks also draw new residents. Population growth has been steady since the year 2000.

Owensboro’s median home values are $129,700 and rose 8.7% last year. It’s seen some of the best price appreciation in the state but still has extremely reasonable home prices, making it a good choice for fix and flip investors.

Bowling Green

Bowling Green is a good place to invest if you plan on holding long-term. Bowling Green’s population has been steadily growing, up 12.3% since 2010. It’s home to several major companies, such as Fruit of the Loom, and is also home to Western Kentucky University.

The combination of college students and new families make Bowling Green a good city for real estate investors who want to generate rental income and those who want to flip homes. Median home values of $182,900 rose 5.8% last year. Average rents grew almost 8% year over year, and population growth has been over 2% for the past three years.

If you’re new to real estate investing or new to investing in Kentucky, partner with an experienced, local real estate agent for guidance and support when breaking into the market. Reach out to Clever today to be connected with one of our top-rated agents.

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Luke Babich

Luke Babich is the co-founder and Chief Strategy Officer of Clever Real Estate, the free online service that connects you with top agents to save money on commission. He's an active real estate investor and licensed agent in St. Louis, with 22 units currently. Luke graduated from Stanford University and subsequently ran a historic data-driven campaign for University City City Council. Luke's writing has been featured in Homeland Security Today, Mashvisor, Payments Journal, and Bigger Pockets.

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