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The 10 Best (and Worst) Cities for Investing in Real Estate May Surprise You

Many of us dream of making millions (or at least setting up a cushy retirement) by investing in real estate … only, where to buy? Since certain markets are going gangbusters while others limp along, you really need to pinpoint the top places to plunk down your money, and know where to steer clear.

Well, BiggerPockets has done just that with the release of its Real Estate Investment Market Index, outlining the 10 best (and worst) major markets for real estate investors in 2015.

To pinpoint these profitable areas as well as the lemons, analysts considered home purchase prices, the amount they’ve appreciated, rental prices, and other factors. And the cities that’ll give you the most bang for your buck may surprise you. Check them out below.

1. Dallas, TX

Everything is bigger in Texas, right? Dallas tops the list as a real estate investment win due to its combo of strong price appreciation and rent. Investors stand to earn almost 20% return before expenses. It’s one of three Texan cities ranked in the top 10.

2. Denver, CO

Coming in at No. 2 is Denver, which experienced the strongest rise in home prices over any other market. Year over year, property values rose 13.4%.

3. Miami, FL

Miami is one of three Florida cities on this list, boasting an 18.6% return year over year.

4. Houston, TX

Houston boasts the highest population of any city on this list. Over the past year, investors made gross returns of 18.5%.

5. Atlanta, GA

Investors in Atlanta saw 16.5% returns thanks to a balanced mix of gains in cash flow and appreciation.

6. Tampa, FL

Tampa made investors happy with 16.4% gross profit, due largely to cash flow.

7. Detroit, MI

Despite jokes that you can buy homes in this city for less cash than a car, Detroit has seen a resurgence, boasting a 16.2% return on real estate investments.

8. Austin, TX

It’s no surprise that Austin, the city known for its hipsters and South by Southwest, is rocking real estate, with a 15.6% return.

9. Las Vegas, NV

Investors who roll the dice on real estate in Las Vegas are seeing huge payoffs, with an overall return of 15.3%.

10. Orlando, FL

Disney World isn’t all Orlando has going for it: Real estate investors see returns of 14.9% on their properties.

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To find the 10 worst cities for real estate investment, analysts looked for low rents per dollar on home value and low home price appreciation over time. The Northeast seems to be particularly sluggish, but there are other cold spots, too. Not that you can’t find some gems in these areas, but proceed with caution in these 10 markets:

1. Hartford, CT

2. Salt Lake City, UT

3. Louisville, KY

4. Milwaukee, WI

5. Washington, DC

6. Los Angeles, CA

7. Baltimore, MD

8. New York, NY

9. Boston, MA

10. Birmingham, AL