A recent study by Highland Cabinetry has identified Detroit as the most profitable city for landlords in the United States, boasting a rental profit rate of 20.42%. The study analyzed key factors, including house sale prices, rental income, and property availability across the 35 largest U.S. cities.
Detroit Tops the List With High Returns
Detroit, Michigan, leads the ranking due to its exceptionally low property prices, averaging just $80,058. Despite relatively moderate monthly rents of $1,362, landlords in the city enjoy the highest rental profit rate among all cities surveyed. With a price per square foot of just $69, Detroit provides an affordable entry point for investors looking for high returns.
Top 10 Cities for Landlords in 2025
According to the study, the top U.S. cities for landlords based on rental profitability are:
- Detroit, MI – 20.42% rental profit rate ($80,058 average home price, $1,362 monthly rent)
- Chicago, IL – 7.90% ($363,566 home price, $2,395 monthly rent)
- Indianapolis, IN – 6.83% ($284,692 home price, $1,620 monthly rent)
- Columbus, OH – 6.40% ($285,210 home price, $1,522 monthly rent)
- El Paso, TX – 6.17% ($304,047 home price, $1,563 monthly rent)
- Louisville, KY – 5.92% ($289,542 home price, $1,428 monthly rent)
- Fort Worth, TX – 5.53% ($443,716 home price, $2,043 monthly rent)
- San Antonio, TX – 5.46% ($372,452 home price, $1,695 monthly rent)
- Washington, D.C. – 5.36% ($545,220 home price, $2,436 monthly rent)
- Philadelphia, PA – 5.28% ($403,598 home price, $1,777 monthly rent)
Rental Market Trends and Key Insights
- Washington, D.C. Boasts Highest Rental Income Potential: Despite ranking ninth in profitability, Washington, D.C. commands the highest rental prices, with an average monthly rent of $2,436—nearly double the study’s average.
- Chicago Offers High Rental Demand: Chicago landlords benefit from strong demand, with 518 available rental units per 100,000 residents. However, high property prices affect overall profitability.
- Philadelphia Leads in Rental Availability: The city provides the largest rental inventory, with over 14,400 available units, while maintaining relatively affordable rental rates.
Emerging Rental Markets to Watch in 2025
Beyond the top ten, emerging cities such as Charlotte, NC, and Nashville, TN, are gaining traction as attractive rental markets due to rapid population growth and economic development. Charlotte has seen a surge in new housing projects, while Nashville’s booming tech sector continues to drive housing demand.
Expert Commentary
A spokesperson from Highland Cabinetry stated: “Mid-sized markets are increasingly outperforming larger metropolitan areas in rental profitability. Investors who focus on cities with strong economic growth and affordable property prices can secure high returns.”
Property market in 2025
The rental property market in 2025 presents numerous opportunities for investors. Cities like Detroit, Indianapolis, and Columbus offer high returns at affordable entry points, while established metros such as Washington, D.C., and Chicago provide rental income potential despite higher property costs. Investors should consider factors like rental demand, property affordability, and economic growth when entering these markets.
