Deciding to become a property owner is a major step. To get a good return on your investment, it’s important to do thorough research on the real estate market. One of the most important factors to consider is the location of your property investment. If you need some guidance, here are the 10 best states to invest in real estate.
10 of the Best States to Invest in Real Estate
Location isn’t the only consideration when deciding to invest in real estate. However, it can help you narrow down the places where there is a good chance of real estate profitability. If you’re going to be a first-time property owner, here are some of the best states to invest in.
1. Indiana
Indiana is currently one of the best states for real estate. The median home cost is $142,600 with an 8.9% growth in the last 12 months. Compared to the U.S. average, the cost of living in Indiana is 17.9% lower. Among the population, 27.1% are renters. The average rent is $573 for a studio, $662 for a one-bedroom, $825 for a two-bedroom, $1084 for a three-bedroom, and $1221 for a four-bedroom. Indianapolis is one of the best cities to invest in Indiana.
Indiana is currently one of the best states for real estate.
2. Ohio
Ohio is also a good place to invest in property. The median home cost is $140,700 with a 6.5% growth in the last 12 months. Compared to the U.S. average, the cost of living in Ohio is 17.4% lower. Among the population, 29.5% are renters. The average rent is $551 for a studio, $636 for a one-bedroom, $811 for a two-bedroom, $1067 for a three-bedroom, and $1791 for a four-bedroom. Columbus and Cincinnati are two of the best cities to invest in Ohio.
3. North Carolina
One of the best states to buy rental property is North Carolina. The median home cost is $187,300 with a growth of 8.5% in the last 12 months. Compared to the U.S. average, the cost of living in North Carolina is 9.4% lower. Among the population, 29.2% are renters. The average rent is $697 for a studio, $731 for a one-bedroom, $875 for a two-bedroom, $1172 for a three-bedroom, and $1430 for a four-bedroom. Raleigh, Durham, and Charlotte are the top cities to invest in North Carolina.
One of the best states to buy rental property is North Carolina.
4. Tennessee
If you want a good return on your investment, consider buying rental property in Tennessee. The median home cost is $164,500 with an 8% growth in the last 12 months. Compared to the U.S. average, the cost of living in Tennessee is 12.4% lower. Among the population, 28.8% are renters. The average rent is $622 for a studio, $696 for a one-bedroom, $852 for a two-bedroom, $1134 for a three-bedroom, and $1332 for a four-bedroom. Nashville is one of the best cities to invest in Tennessee.
5. Missouri
Real estate is also a worthwhile investment in Missouri. The median home cost is $159,500 with a 6.7% growth in the last 12 months. Compared to the U.S. average, the cost of living in Missouri is 14.1% lower. Among the population, 27.8% are renters. The average rent is $569 for a studio, $650 for a one-bedroom, $827 for a two-bedroom, $1110 for a three-bedroom, and $1276 for a four-bedroom. Springfield and Kansas City are some of the best cities to invest in Missouri.
6. Idaho
Idaho is another state that is worth buying real estate. Compared to other states on this list, the median home cost is higher at $263,900. However, there has also been a 14% growth in the last 12 months. The cost of living in Idaho is 2.3% lower than the U.S. average. Among the population, 26.7% are renters. The average rent is $542 for a studio, $626 for a one-bedroom, $802 for a two-bedroom, $1129 for a three-bedroom, and $1338 for a four-bedroom. Boise is one of the best cities to invest in Idaho.
7. Georgia
Next on the list of the best states to invest in real estate is Georgia. The median home cost is $186,500 with a 9.1% growth in the last 12 months. Compared to the U.S. average, the cost of living in Georgia is 6.6% lower. Among the population, 30.8% are renters. The average rent is $790 for a studio, $821 for a one-bedroom, $958 for a two-bedroom, $1256 for a three-bedroom, and $ 1520 for a four-bedroom. Atlanta is one of the best cities to invest in Georgia.
8. Florida
Florida is one of the more expensive states on this list. However, as home to some of the most popular tourist destinations in the country, buying real estate in this state is still a good investment. The median home cost is $237,100 with a 7.8% growth in the last 12 months. Compared to the U.S. average, the cost of living in Florida is 2.8% higher. Among the population, 27% are renters. The average rent is $832 for a studio, $945 for a one-bedroom, $1174 for a two-bedroom, $1584 for a three-bedroom, and $1903 for a four-bedroom. Orlando, Jacksonville, and Tampa are the top cities to invest in Florida.
9. Alabama
Alabama is another best place to buy real estate. The median home cost is $120,300 with a 6.9% growth in the last 12 months. Compared to the U.S. average, the cost of living in Alabama is 17.7% lower. Among the population, 25.9% are renters. The average rent is $591 for a studio, $639 for a one-bedroom, $772 for a two-bedroom, $1021 for a three-bedroom, and $1191 for a four-bedroom. Huntsville is one of the best cities to invest in Alabama.
10. Texas
Last but not least on our list of best places to invest in real estate is Texas. The median home cost is $195,000 with a 6.7% growth in the last 12 months. Compared to the U.S. average, the cost of living in Texas is 6.1% lower. Among the population, 33% are renters. The average rent is $738 for a studio, $841 for a one-bedroom, $1036 for a two-bedroom, $1291 for a three-bedroom, and $1721 for a four-bedroom. Houston, Arlington, Austin, and San Antonio are the top cities to invest in Texas.
Other Considerations When Investing in Real Estate
Property Taxes
Investors should also consider the property tax rate of states when buying real estate. Alabama has the second-lowest property tax rate in the country. The effective property tax rate is 0.37%, so property owners pay about $543 in taxes each year. Idaho is also notable with an effective property tax rate of 0.72%, which means property owners pay about $1,246 in annual taxes. It’s worth noting that Texas has one of the highest property tax rates in the country at 1.62%. Property owners will pay about $2,578 in taxes each year.
Migration
Investors may also want to purchase real estate in states where there is high migration. Florida, Texas, North Carolina, Georgia, Tennessee, and Idaho have seen a high influx of people in the last year. Thus, there are greater housing demands in these states.
Valuation
Some investors may also want to consider the price-to-income ratio when deciding to purchase real estate in a particular state. Based on valuation, Texas, Tennessee, North Carolina, Florida, and Idaho are some of the best states to invest in real estate.
Money Magnets
It’s also worth investing in states that are money magnets since this helps drive up home prices. Some of the best money-magnet states are Florida, Texas, North Carolina, and Tennessee.
Jumping into real estate investment can be scary. Since you’re investing your money, you want to make sure that you are making the right choices. Given the unpredictability of the economy, it’s wise to invest in states that have the best real estate markets in the country. For a good return on investment, confidently consider the 10 best states to invest in real estate mentioned.
Once you’ve found the perfect property, feel free to browse our online directory of property management companies to help you manage your real estate investment.
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