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

Real estate investments in these zip codes have returned at least 5% over the last five years.

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 (SFRs) for over 200,000 neighborhoods in their database using a proprietary methodology.

They 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, 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

Metro: Indianapolis

Annualized total return: 5.4%

School rating: 71.9

91602: North Hollywood, California

Metro: Los Angeles

Annualized total return: 5.4%

School rating: 71.4

73003: Edmond, Oklahoma

Metro: Oklahoma City

Annualized total return: 5.4%

School rating: 90

63043: Maryland Heights, Missouri

Metro: St. Louis

Annualized total return: 5.5%

School rating: 71.9

85259: North Scottsdale, Arizona

Metro: Phoenix

Annualized total return: 5.5%

School rating: 88

77059: Clear Lake City, Texas

Metro: Houston

Annualized total return: 5.6%

School rating: 76

75022: Flower Mound, Texas

Metro: Dallas

Annualized total return: 5.6%

School rating: 84

44023: Chagrin Falls, Ohio

Metro: Cleveland

Annualized total return: 5.6%

School rating: 70.8

34677: Oldsmar, Florida

Metro: Tampa

Annualized total return: 5.7%

School rating: 78.6

97224: King City, Oregon

Metro: Portland

Annualized total return: 5.8%

School rating: 81.9

30078: Snellville, Georgia

Metro: Atlanta

Annualized total return: 5.8%

School rating: 72.5

45255: Forestville/Cherry Grove, Ohio

Metro: Cincinnati

Annualized total return: 5.9%

School rating: 75.7

60016: Des Plaines, Illinois

Metro: Chicago

Annualized total return: 6%

School rating: 76.4

66223: Overland Park, Kansas

Metro: Kansas City

Annualized total return: 6.2%

School rating: 97.4

37062: Fairview, Tennessee

Metro: Nashville

Annualized total return: 6.5%

School rating: 70.6

33327: Weston, Florida

Metro: Fort Lauderdale

Annualized total return: 6.6%

School rating: 70.5

33158: Palmetto Bay, Florida

Metro: Miami

Annualized total return: 6.8%

School rating: 83.9

48322: West Bloomfield Township, Michigan

Metro: Detroit

Annualized total return: 6.9%

School rating: 74.4

19035: Gladwyne, Pennsylvania

Metro: Philadelphia

Annualized total return: 6.9%

School rating: 86.9

33434: Hamptons at Boca Raton, Florida

Metro: West Palm Beach

Annualized total return: 8.1%

School rating: 87.9

Real estate investments in these zip codes have returned at least 5% over the last five years. Read Full Story