These are the best places in Iowa to invest in real estate in 2025.
Learn where to buy the most profitable investment properties, short term rentals and flip homes.
Based on moving trends, population growth and local market trends.
Let’s get started.
Here are best cities in Iowa to invest in real estate:
Des Moines
Des Moines population grew by about 5.4% between 2010 and 2020, making it the most populous city in Iowa. Major financial and insurance employers like Principal Financial, Wells Fargo, and Nationwide have expanded local white-collar jobs by nearly 25% over the past decade.
Neighborhoods like East Village and Beaverdale can yield rental returns above 7%, beating many comparably sized Midwest real estate markets. Des Moines strategic location at the intersection of I-35 and I-80 enhances logistics and distribution, attracting businesses seeking lower operational costs than coastal hubs. This unique blend of corporate growth, affordable housing, and consistent population gain is what makes Des Moines the best place to invest in real estate in Iowa.
Cedar Rapids
Cedar Rapids saw nearly 9% population growth from 2010 to 2020, rebounding strongly after the 2008 flood. It’s home to companies like Collins Aerospace and Quaker Oats, fueling a 20% increase in advanced manufacturing and food processing jobs since 2015.
Median home values near $185,000 remain lower than state averages for similarly sized metros, yet have appreciated at around 6% annually over the past five years. Rental yields often top 8% in neighborhoods like Wellington Heights, driven by continual demand from blue-collar and professional workers.
The “ReBuild Iowa” initiatives and local tax incentives streamline redevelopment, bring in outside investors to tackle revitalization projects. Cedar Rapids’ industrial diversity and robust logistics network along I-380 and the Cedar River distinguish it from other Midwest nearby cities.
Davenport
Davenport is home to manufacturers like Arconic and Deere & Company (nearby in Moline). The area has maintained a stable jobs base in metal fabrication and agriculture equipment. Rental yields can reach 7% in the West End or NorthSide neighborhoods, driven by a mix of students, blue-collar workers, and local professionals.
Davenport’s RiverVision initiative—over $100 million in public-private riverfront redevelopment, continues to draw tourists and new residents, supporting growth in both commercial and residential investment real estate. This combination of industrial strength, riverfront rejuvenation, and below-market housing costs positions Davenport as a great Midwest investment alternative.
Iowa City
The University of Iowa, employing nearly 30,000 faculty and staff, drives year-round housing demand in Iowa City. Especially near the downtown and Northside Marketplace districts. Investor returns average 7–8% in areas catering to student rentals, significantly higher than many comparable college towns in neighboring states.
Found the Best Place to Buy a Rental Property?
Secure up to 80% financing using projected rental income. Not based on tax returns or personal income.
- Up to 80% LTV
- Use future monthly rent to qualify
- No experience required
Ames
Ames research-driven employers like the Iowa State University Research Park and the National Animal Disease Center contribute to biotech and agricultural innovation, creating stable, high-skilled jobs.
Rental yields can exceed 7% near Campustown, supported by a mixture of student, faculty, and research staff tenants. Ames streamlined permitting process and tax incentives for sustainable building projects have spurred many private investments right in downtown. With a growing tech and research-oriented economy and the Iowa State University’s expansion, Ames has a decent competitive edge among smaller Midwest cities.
Dubuque
Dubuque’s population grew by approximately 3.5% between 2010 and 2020. It’s currently transitioning from its manufacturing roots into a more diverse economic hub. Longstanding ezmployers like John Deere Dubuque Works and the tourism sector along the Mississippi River ensure stable year-round demand for both short-term rentals.
Rental yields of around 7–8% in districts like the Historic Millwork District compare favorably to other riverfront cities in Iowa or Illinois. Investors seeking higher yields, can get financing for airbnb’s near Chestnut Ski Mountain.
Related to Where to Invest in Iowa
Now that you’ve learned where to invest in real estate in Iowa, lets explore more options:
Is Iowa a good place to invest in real estate?
Iowa’s diversified economy is comprised of financial services in Des Moines, advanced manufacturing in Cedar Rapids, and world-class agricultural research in Ames. Major employers such as Principal Financial, Collins Aerospace, and John Deere have each expanded operations, driving housing demand in their respective regions.
Local governments frequently use tax abatements to spur residential redevelopment, particularly in flood-damaged areas like Cedar Rapids. Median home prices remain below $200,000 in many Iowa cities, yet appreciation rates of 5–8% annually are common in growth hubs like Davenport and Iowa City.
Rental yields of 7–8% are often found near major employers and colleges, specifically around the University of Iowa, which consistently is drawing new residents. Overall, Iowa’s mix of local incentives, steady job creation, and population gains differentiates it from other real estate markets in the region.