Finance 20 of the best US housing markets for investing in real estate

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Real-estate investments in these ZIP codes have returned at least 5% over the past five years.

The West Palm Beach metro area is the hottest market for investors right now. play

The West Palm Beach metro area is the hottest market for investors right now.

(pisaphotography/Shutterstock)
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If you're looking to invest in real estate, location is paramount.

HomeUnion, an online real-estate investment management firm, has identified ZIP codes in 20 US metros where investors have seen the highest return on investment and minimal risk over a five-year period.

To compile its list, HomeUnion calculated the total annualized return — including projected appreciation and cash flow of single-family rentals for more than 200,000 neighborhoods in its database using a proprietary methodology.

It then eliminated neighborhoods with an average school rating below the 70th percentile, based on data from Maponics.

"Typically, SFRs in areas with good schools have been attractive to long-term investors, though those areas have been more challenging to locate for remote investors in today's heated housing market," said Steve Hovland, the director of research for HomeUnion.

The markets with the highest returns and an average school rating in the 70th percentile or higher made it to the top of the list. Below, check out the top 20 housing markets in the US for real-estate investors, where average annual returns over five years range from 5.4% to 8.1%.

46280: North Indianapolis, Indiana

46280: North Indianapolis, Indiana play

46280: North Indianapolis, Indiana

(KYPhua/Shutterstock)

Metro: Indianapolis

Annualized total return: 5.4%

School rating: 71.9



91602: North Hollywood, California

91602: North Hollywood, California play

91602: North Hollywood, California

(View Apart/Shutterstock)

Metro: Los Angeles

Annualized total return: 5.4%

School rating: 71.4



73003: Edmond, Oklahoma

73003: Edmond, Oklahoma play

73003: Edmond, Oklahoma

(Matthew Rutledge/Flickr)

Metro: Oklahoma City

Annualized total return: 5.4%

School rating: 90



63043: Maryland Heights, Missouri

63043: Maryland Heights, Missouri play

63043: Maryland Heights, Missouri

(Shutterstock)

Metro: St. Louis

Annualized total return: 5.5%

School rating: 71.9



85259: North Scottsdale, Arizona

85259: North Scottsdale, Arizona play

85259: North Scottsdale, Arizona

(Dreamframer/Shutterstock)

Metro: Phoenix

Annualized total return: 5.5%

School rating: 88



77059: Clear Lake City, Texas

77059: Clear Lake City, Texas play

77059: Clear Lake City, Texas

(Sean Pavone/Shutterstock)

Metro: Houston

Annualized total return: 5.6%

School rating: 76



75022: Flower Mound, Texas

75022: Flower Mound, Texas play

75022: Flower Mound, Texas

(Shutterstock)

Metro: Dallas

Annualized total return: 5.6%

School rating: 84



44023: Chagrin Falls, Ohio

44023: Chagrin Falls, Ohio play

44023: Chagrin Falls, Ohio

(Shutterstock)

Metro: Cleveland

Annualized total return: 5.6%

School rating: 70.8



34677: Oldsmar, Florida

34677: Oldsmar, Florida play

34677: Oldsmar, Florida

(Shutterstock / Bonnie Fink)

Metro: Tampa

Annualized total return: 5.7%

School rating: 78.6



97224: King City, Oregon

97224: King City, Oregon play

97224: King City, Oregon

(Josemaria Toscano/Shutterstock)

Metro: Portland

Annualized total return: 5.8%

School rating: 81.9



30078: Snellville, Georgia

30078: Snellville, Georgia play

30078: Snellville, Georgia

(Shutterstock/Sean Pavone)

Metro: Atlanta

Annualized total return: 5.8%

School rating: 72.5



45255: Forestville/Cherry Grove, Ohio

45255: Forestville/Cherry Grove, Ohio play

45255: Forestville/Cherry Grove, Ohio

(photo.ua/Shutterstock)

Metro: Cincinnati

Annualized total return: 5.9%

School rating: 75.7



60016: Des Plaines, Illinois

8. Chicago, Illinois play

8. Chicago, Illinois

(marchello74/Shutterstock)

Metro: Chicago

Annualized total return: 6%

School rating: 76.4



66223: Overland Park, Kansas

66223: Overland Park, Kansas play

66223: Overland Park, Kansas

(Stuart Seeger/Flickr)

Metro: Kansas City

Annualized total return: 6.2%

School rating: 97.4



37062: Fairview, Tennessee

37062: Fairview, Tennessee play

37062: Fairview, Tennessee

(ESB Professional/Shutterstock)

Metro: Nashville

Annualized total return: 6.5%

School rating: 70.6



33327: Weston, Florida

33327: Weston, Florida play

33327: Weston, Florida

(Shutterstock)

Metro: Fort Lauderdale

Annualized total return: 6.6%

School rating: 70.5



33158: Palmetto Bay, Florida

33158: Palmetto Bay, Florida play

33158: Palmetto Bay, Florida

(Richard Cavalleri/Shutterstock)

Metro: Miami

Annualized total return: 6.8%

School rating: 83.9



48322: West Bloomfield Township, Michigan

48322: West Bloomfield Township, Michigan play

48322: West Bloomfield Township, Michigan

(Andrey Bayda/shutterstock)

Metro: Detroit

Annualized total return: 6.9%

School rating: 74.4



19035: Gladwyne, Pennsylvania

19035: Gladwyne, Pennsylvania play

19035: Gladwyne, Pennsylvania

(Ed Yakovich / Wikimedia Commons)

Metro: Philadelphia

Annualized total return: 6.9%

School rating: 86.9



33434: Hamptons at Boca Raton, Florida

33434: Hamptons at Boca Raton, Florida play

33434: Hamptons at Boca Raton, Florida

(GagliardiImages/Shutterstock)

Metro: West Palm Beach

Annualized total return: 8.1%

School rating: 87.9