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Northwest Arkansas (NWA) is currently one of the best undervalued markets to be investing in, thanks to its combination of job growth, appreciation, and relative affordability. 

I’ve already written three articles that examined the best markets for different reasons (house hacking, income growth, and overall economy), and NWA has a way of finding itself on each of these lists.

I’ll be examining the best individual towns within NWA for investors. Real estate is a location-based business, after all.

But first, to recap, here are the underlying fundamentals behind NWA’s investment potential as a whole.

Northwest Arkansas Population and Job Growth

The NWA area has seen strong population and job growth over a five- and one-year period, thanks to Walmart’s return-to-office policy, a growing number of companies moving to the area, and an overall affordable cost of living.

NWA’s population grew by 2.35% over a one-year period (the national average was 0.53%).

NWA experienced a 1.61% increase in jobs over the same one-year period (the national average was 1.66%).

Northwest Arkansas Income Growth

According to the Bureau of Labor Statistics (BLS), the national median wage is $44,830. NWA’s median income is currently estimated to be $58,475 as of September 2024, up from September 2023’s estimate of $53,934.

Northwest Arkansas Household Growth

Normally, this would be where I’d put a graph tracking the growth in prices. After all, for most metros, increases in income are highly correlated with increases in property values. However, in my research, I discovered that in NWA, property values had a higher correlation with the number of households (a 0.79 correlation, indicating a fairly strong positive relationship).

Let’s take a look at household growth for the market. I’ve also included total units as well, to gauge how demand is meeting supply.

The market has done a fine job of absorbing the incoming units. So far, the proportion of vacant units isn’t the lowest in the nation, but it’s still under the national average (9.79%).

Northwest Arkansas Median Price

Now that we’ve seen that households are increasing and know that household growth is strongly correlated with price growth in NWA over time let’s finally take a look at the growth in median price.

The median home price grew an intimidating 17.3% from 2022 to 2023 (compared to the national average of 6.2%), according to the U.S. Census. I don’t think NWA will continue to see appreciation like this in the future, but it appears to be an indicator that the underlying market fundamentals I recapped do have a positive effect on home prices.

Which Places in NWA Are the Best for Real Estate Investors?

Northwest Arkansas is made up of many different towns and communities, so which ones might be best for real estate investors? I’ll be examining this from the lens of an out-of-state investor who wants a traditional long-term buy-and-hold property (sorry for now, STR folks).

Here is an introductory map if you’re not familiar with the area:

Population growth by city in Northwest Arkansas

For starters, let’s look at the population of each city in NWA:

Now let’s look at the five-year population growth for each city:

Highfill has an incredible 114% growth rate, but its population is under 2,000 people.  Centerton and Bentonville are seeing strong growth numbers relative to their size, at 53% and 22%, respectively.  Fayetteville, the largest city in the metro area, also boasts 16% growth in population, which beats the growth of smaller towns like Springdale (12%) and Rogers (10%).

Demand vs. supply, by city

Population growth does not happen in a vacuum. Even if a city experiences growth, if builders keep up with demand and build more than enough units, you may experience strong competition for your rental properties from other investors.

There are two metrics I like to use to track supply and demand within a market. The first is the vacancy rate:

I like how the center of the region (Rogers, Cave Springs, Lowell, and Springdale) has relatively low vacancy rates compared to their anchor city counterparts (Bentonville and Fayetteville).

Now, let’s analyze a metric called “net household growth.” This takes the five-year household growth and then subtracts the five-year supply growth. It’s meant to be a rule-of-thumb measurement to see if household growth is outpacing supply growth. 

In most markets, this measurement will be negative. But in general, the higher the number, the more household growth is occurring relative to supply.

It looks like Bentonville and Centerton are growing supply faster than household growth is occurring. This is usually the case for most markets and could mean more competition among investors and sellers. 

If you wanted to invest in a market near large employers, Rogers, Lowell, and Springdale may be a better bet due to supply and demand dynamics alone. However, you’ll still want to take other metrics into consideration, like income, price, and rent growth. 

Income growth by city

Now, let’s look at the current median income for each city:

The concentration of higher incomes around Benton County is not surprising. This is where Walmart HQ is, along with many other white-collar jobs. 

Let’s look at five-year growth now:

It’s nice to see places in Washington County, like Fayetteville and Springdale, whose median incomes are less than their Benton County counterparts (see income growth). But it appears that the residents of places like Bentonville, Rogers, Cave Springs, Centerton, and Bella Vista have a higher income on average.

Median price and rent growth by city

Let’s take a look at five-year price growth for each city:

Every “main city” saw strong price growth over a five-year period. I’d like to specifically point out Pea Ridge, whose median price grew 82%, yet still only has an affordable median price of $222,000 (as of 2022), and is only a 30-minute drive to Walmart HQ, and not too far from other employers as well.

Springdale and Rogers remain affordable cities with strong appreciation (while Centerton, Bentonville, and Fayetteville had even stronger appreciation rates).

Now let’s look at rent growth:

The thing about price and rent data from the U.S. Census is that their numbers are usually less than what they are in reality. So, expect the median price and median rent to actually be higher than what you see on these maps. 

So, what exactly should you be looking for? Just make sure the cities have relatively solid rent growth. For example, Springdale, Rogers, and Centerton are experiencing higher rent growth than Fayetteville. It doesn’t make Fayetteville a less attractive market overall, but it matters, especially since Rogers and Centerton already have higher appreciation rates than Fayetteville.

Let’s take a look at rent-to-price ratios (as of the 2022 Census ACS five-year survey):

The average rent-to-price ratio in the MSA is 0.29%, so anything above that is what I’d consider better than average for the NWA area.

It’s no surprise the towns immediately surrounding the anchor cities of Bentonville (0.28%) and Fayetteville (0.27%) have a higher rent-to-price ratio: They have a lower median price. 

You’ll also notice many outer towns appear to have even higher rent-to-price ratios, like Gravette (0.50%), Pea Ridge (0.48%), and Elkins (0.54%). In these cases, it’s always helpful to see what percentage of units are occupied by renters. Let’s take a look at what the Census data tells us:

Elkins, Pea Ridge, and Bella Vista, while having good rent-to-price ratios, don’t have as many tenants proportional to their size. However, Centerton has a good combination of both. So does Rogers and Springdale.

I’ll be putting all of this data together to calculate an “investment score” for each city in the NWA area, with an emphasis on affordability, cash flow, and future growth in population and home price appreciation.

But first, I think it’d be helpful for you to get opinions on each area from a boots-on-the-ground team. I’ve invited an investor-friendly real estate agent who helps out-of-state (and local) investors navigate each market, as well as two property managers who actively manage properties in the area, to give their take on the pros and cons of each city in the NWA area. I think you’ll find their insights extremely helpful and actionable.

An Investor-Friendly Real Estate Agent on NWA

Here’s what Zach Stanley, an investor-friendly agent featured on the BiggerPockets Agent Finder, has to say about the different markets in NWA:

“I have five to seven calls a week with investors all over the country, and even locally here, that all have different investing strategies. So I have seen the positives and negatives of the cities here locally. 

Below are my pros and cons for investors in each town:

Fayetteville

• Pros: Fayetteville is a cool/funky college town, with lots of growth. Fayetteville is surrounded by great cities that have tons of land and areas for development, so the potential is limitless at this point for the area. Fayetteville has seen great appreciation in home prices and rent in recent years, and any homes around the university within a 10-minute drive are able to ask for very high rents per room due to the University of Arkansas having a housing crisis and not having enough rooms for the students. This situation allows for deals to start making sense really quick. 
• Cons: Fayetteville has driven out a decent amount of local business in past years due to some left-leaning policies. Because of this, some businesses have packed their bags and moved to the Rogers and Bentonville area. 

Springdale 

• Pros: Springdale has a lot of money and development being poured into and around the downtown area. Because of this, we have seen home prices increase drastically around the downtown area, and I predict it will continue to rise in recent years. Springdale is also one of the most affordable places to buy homes in all of Northwest Arkansas.
• Cons: Springdale has always been the city that seems to be lagging behind the main cities here locally (Fayetteville, Rogers, and Bentonville being the others). A lot of this is due to a larger amount of some low B- and C-class neighborhoods that drag the areas around them down as well. 

Rogers

• Pros: Rogers is a powerhouse that invites businesses to settle down there and has some of the best homes and areas of entertainment in all of NWA. It is pretty central on the map, so you can shoot up to Bentonville pretty easily and also get south to Fayetteville if needed as well. Rogers has the Pinnacle Hills area, which is growing rapidly and is a very nice place to shop, live, have dinner, go to concerts, etc. People even really love the downtown Rogers area, as it offers a different vibe than the other four downtowns and has lots of fun things to do. I personally own three homes close to downtown Rogers, so I believe in the growth there.
• Cons: You can run into some C-class neighborhoods in Rogers as you make your way more east from the interstate. Housing prices in comparison with rents oftentimes make it tough to cash flow on rentals in these areas as well. 

Bentonville 

• Pros: There are so many pros about Bentonville, it’s hard to put in a few sentences. Bentonville is the home base of Walmart headquarters, which is one of the main powerhouses of this area. A few other powerhouses would be Tyson Foods, JB Hunt trucking, George’s Chicken, and Simmons Chicken.
• Bentonville is home to some amazing real estate, Crystal Bridges Art Museum, and a rapidly growing population that should be doubling in the next 10 to 15 years.  Bentonville is probably the reason why most people hear about NWA.
• There are some great subcommunities that are growing thanks to the growth of Bentonville that I think are great areas to invest in. One of those being Centerton, where a lot of my personal investing clients have been investing. Also, I really like the potential and the growth I am seeing from Highfill. Highfill is the town closest to our regional airport, and it doesn’t take a rocket scientist to know this area will be growing drastically in the coming years.
• Cons: With such a great area and so many eyeballs on one spot, the prices have shot up drastically, making it an area where a lot of real estate investing deals just don’t make sense anymore. Yes, you could park some cash in Bentonville real estate and hope for it to appreciate well for the next 10 to 15 years and even longer, but you will most likely be losing money monthly on cash flow in the meantime. 

Bella Vista

• Pros: Bella Vista is one of my favorite places in all of NWA. It is close to downtown Bentonville and a beautiful place to own a single-family residential home. STR homes can sometimes do well here if you have a great Realtor pointing you in the right direction (AKA the person writing this). This city is where I personally build a few homes a year as well, as it’s one of the last areas I feel in NWA where you can buy affordable land to build on if you don’t want to be a larger production builder.
• Walmart’s LLC Blue Crane recently bought 2,700 acres in South Bella Vista as well, and there are some great plans I have heard that have to do with biking that should be huge for the area as well. As far as appreciation goes, I think Bella Vista is a spot where home prices will increase dramatically in the coming years.
• Cons: Bella Vista primarily has homeowners and not renters, so there is not a ton of data for rentals, and the rent prices are often lower than the rest of the area. The commute from Bella Vista to other places in NWA is longer, and that can be a downside as well. 

If you’d like Zach Stanley’s help navigating the NWA market for your own investments, you can connect with him here.

A Property Manager on the Local NWA Market

I thought an out-of-state investor’s guide to NWA would be incomplete without hearing from a property manager (PM) as well. Here’s what Nick Slagle, an NWA-focused property manager featured on our BiggerPockets Property Manager Finder, has to say about the individual markets within NWA:

“There are four main ‘cities’ that makeup Northwest Arkansas, although, to outsiders, it will mostly appear as one continuous city. In order of population, largest to smallest, it goes Fayetteville, Springdale, Rogers, and Bentonville. 

Walmart, Tyson Foods, and JB Hunt are headquartered here in NWA, and each has an impact in the shape of the economy. Although JB Hunt and Tyson Foods are older companies than Walmart, the reality is that Walmart plays the biggest role in the economy of NWA. The Walton family also invests vast sums into the local art, leisure, education, and culture of the area. Crystal Bridges Museum of American Art, the vast network of bicycling trails (Razorback Greenway and OZ trails), and the Alice L. Walton School of Medicine are some of the obvious examples of the family’s investment in our area.

Fayetteville’s (pop. 100,000) economy and culture is centered around the University of Arkansas, which is its largest employer, as well as a big chunk of the population (33,000+ enrolled fall 2024). The median age in Fayetteville is under 30 years. It’s no surprise that more households are renters than in the other cities of NWA, but this is a double-edged sword. Younger tenants tend to be more mobile and often only stay for the initial lease term or the duration of their college years. Fayetteville rent demand cycles are heavily related to the school calendar, both because of students and also young professionals who have recently graduated.

Springdale’s (pop. 90,000) economy is heavily dependent on the poultry and food industry. Tyson Foods, Cargill, and others have a presence in Springdale, with Tyson having its world headquarters here. The workforce here could easily be described as predominantly blue collar. There are several food processing plants and factories in Springdale. A lot of tradesmen that work in the booming NWA construction call Springdale home. Residential rentals in Springdale generally catch slightly lower rent than the rest of NWA, but investors are rewarded with tenants who tend to stay in place for many years.

Rogers (pop. 75,000) is often overlooked, but is my personal favorite of the major four cities, both from an investing and a quality of life perspective. In many ways, Rogers is an economy that is married to Bentonville’s. Walmart’s first store was opened in the larger of the two Benton County cities back in 1962, and it has been a growing city ever since.

Rogers is a more established city with plenty of opportunities to buy 20-to-40-year-old houses and add value. Can you say BRRRR!? Rogers has a good mix of both blue- and white-collar residents. The Pinnacle Hills area of Rogers is home to shopping, dining, and entertainment, as well as numerous major corporate offices: PepsiCo, Nestle, General Mills, Reckitt Benckiser, and Johnson & Johnson, to name a few.

Rogers and Bentonville are basically one continuous community, with many people living in one and working in the other.  

Bentonville (pop. 60,000) has recently become the most well-known and investor-desired city in Northwest Arkansas. For this reason, I would suggest that out-of-state investors look elsewhere in NWA for a good mix of cash flow and appreciation. 

Cash flow is going to be difficult to find in Bentonville, but there is no denying the appreciation that we have seen over the last 15 years. Both Bentonville and Rogers have seen numerous high-end, large apartment complexes completed in the last three years. These seem to be absorbed well, but I have observed a softening in the single-family rental market in Bentonville recently as compared to the peak of a couple of years ago, when we had leases starting within days of the previous ending.

A couple of other notable towns worth considering:

Centerton (pop. 24,000) has been a bedroom community for quite a while now, but recently has seen a much-needed increase in commercial development. There are a few restaurants and shopping options, but still, for the most part, people who live in Centerton work in Bentonville. Centerton is basically an echo of the Bentonville market, with a marginally lower rent rate and home values. But no one can really tell the difference, except for who sends the water bill.

Pea Ridge (rough pop. guess 10,000) is an interesting opportunity for long-term hold investors. It’s a little out of the way right now, and people need to commute to Bentonville, Rogers, and beyond for work, but it appears when driving that there isn’t a cow pasture that hasn’t been divided into a subdivision. 

Really, though, there is a lot of vacant land still available for future development. Pea Ridge reminds me of the Centerton of 20 years ago. Two-lane Arkansas Highways 72 and 94 connect to Bentonville and Rogers, with lane-adding construction underway on Highway 72. First-time homebuyers and investors alike are beginning to flock to Pea Ridge. What was once a quiet little town has been found, and I predict big appreciation in the future for home prices here.”

If you skimmed Nick’s response, I urge you to go back and read it again. There are many insights here from a boots-on-the-ground expert property manager that you should pay attention to if you plan on investing in this market.

If you’d like to ask Nick Slagle more questions about any particular market and the rents you might be able to charge for a given property, you can reach him at [email protected].

Another Property Manager on NWA’s Local Markets

For the purpose of helping out-of-state investors navigate an unfamiliar market, I wanted to get a second opinion from another property manager in the NWA area. I reached out to Tyler Casey, who’s also featured on our BiggerPockets Property Manager Finder. I highly recommend reading what he had to say:

“I’m Tyler Casey with Pro X Property Management; we currently manage 1,900 rental units and service the Fayetteville-Bentonville Metro Area, often referred to as Northwest Arkansas, or NWA. We primarily manage single and multifamily residential homes, with a small portion being mixed-use commercial properties.

Fayetteville

While Fayetteville is very much a college market, it does still have a somewhat diverse tenant pool. Occupancy rates are strong across NWA, and Fayetteville is no different. The only drawback to this market is that there is some inherent seasonality with semester breaks. You can expect higher vacancy in the summer months and likely more turnover in general with a heavy student tenant pool.

Springdale 

This market, being the least glamorous of the major cities in the metro, may appear the most attractive from a cash flow perspective to investors. Springdale is much more of a working-class tenant pool, with Tyson Foods being headquartered here, as well as JB Hunt headquarters being situated in Lowell, an adjacent suburb just to the north. In my opinion, this market presents a unique opportunity for buy-and-hold investors looking for future appreciation potential without quite as daunting a price tag.

Rogers

Rogers’ proximity to both Bentonville and Springdale makes it an ideal spot to call home for employees of all three of the major employers in the area: Walmart, Tyson, and JB Hunt. Rogers is experiencing massive growth due to this ideal geographic location. There are also still plenty of older homes/multifamily in need of some renovation to take advantage of for the value-add-minded investor. 

Bentonville 

This city is likely considered the most glamorous of the markets in NWA, with the rapid growth being created by Walmart’s expansion. Walmart is building a massive new headquarters and promoting a major back-to-office initiative with its remote employees. Most people predict great appreciation in this market.  

All the major markets and many of the surrounding areas in NWA have really strong future growth/appreciation potential, all have very strong occupancy rates (in the mid-high 90% range), and I expect that to continue based on the trends I’m seeing in the market. I believe new construction, something we can also assist with, to be a huge opportunity in the metro with the expected population boom.”

Tyler Casey is yet another boots-on-the-ground expert that can help you navigate which rental markets might be best for you as an investor. You can reach out to him on his website here.

Putting It All Together: Investment Score

While I believe you should have enough information to pick which specific cities you’d like to invest in the NWA area, I created an algorithm to help rank each city by investability. I’ve put an emphasis on affordability and cash flow, while also keeping price and rent growth rates in mind.

Here are the results. Each city is ranked by its investment potential.

For agents, property managers, and fellow investors who disagree with this map, I’d love for you to explain why in the comments below. The algorithm is nowhere near perfect and can absolutely be improved. I welcome all feedback. It will help me refine the algorithm, which will help more investors navigate this market.

Final Thoughts

The overall NWA area is growing in population, and property values are appreciating at a healthy rate. As long as you are relatively close to employers (or the university in Fayetteville), there should be relatively good demand for rental units. 

If you absolutely must have cash flow, these are solid markets:

• Centerton
• Springdale

If you can afford it and want to invest for equity growth, these cities might be for you:

• Bentonville
• Fayetteville

And if you’d like a mix of both:

As a general disclaimer, good deals can be found in any market. If you’re ready to start looking for an investment property in the area, I recommend using the BiggerPockets Deal Finder (it’s how I found my investment property in Fayetteville).

I hope this breakdown of each city in the NWA helped. If you have any questions or feedback, please let me know in the comments below.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.