Best States to Buy Rental Property in USA: It’s a huge step to begin your journey in deciding on an investment property. It’s crucial to conduct in-depth research on the real estate market to achieve a high return on your investment. The location of your property investment is one of the most crucial things to consider. For this reason, you must understand the best states to buy rental property in USA.
Housing demand, prices, and other common market patterns for each state should all be considered by wise investors. The profitability of real estate investments can also be impacted by a wide range of factors, including state legislation and house occupancy rates.
To assist you in choosing where to invest in real estate for your best interests, we look at key metrics and the best states to own investment property in the sections below.
10 Best States To Buy Rental Property in the USA
Here are some of the best states to buy rental property in if you’re a first-time home buyer.
1. Idaho
Idaho, a state northwest of the country, is renowned for its untainted wilderness areas and open spaces. It is one of the best states to buy rental property in USA.
It is a good option for property investors because it has the highest median home price and value appreciation over the past year on our list. Low mortgage rates and a cost of living that is 2% less than the national average contribute to the increase in real estate value.
- Home median value: $446,550
- 1.87 percent population growth
- Home values rose on average by 38.2 percent.
- Housing occupied: 87 percent
- Added jobs: 4.32 percent
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2. Florida
Florida is the eighth-most densely populated state in America, with a population of about 22 million. Despite being one of the nation’s most well-liked vacations and retirement spots, purchasing a home there is still rather reasonable as it’s one of the best states to buy rental property.
Geographically speaking, the state is a peninsula bordered by the Atlantic Ocean, the Straits of Florida, and the Gulf of Mexico. With an occupancy rate of 82 percent, its pleasant weather attracts both renters and homebuyers.
- Home median value: $328,576
- 0.84 percent population growth
- Added jobs: 2.57 percent
- The median increase in home value: 23.9 percent
- Housing that is occupied: 82%
3. North Carolina
North Carolina, in the Southeast of the country, has a warm Atlantic coastal plain to the east and a chilly mountainous region to the west.
The cost of living in the state is 9% lower than the national average. Additionally, there are plenty of work prospects for millennials and young professionals in towns like Durham, Charlotte, and Raleigh.
- The average cost of a home: is $254,625
- Increase in property value: 17.4%
- $54,600 is the median income.
- 10 percent population growth
4. Texas
Texas, which is in the South Central region of the country, is the biggest state in terms of both people and size. Due to its vastness, it is located in various climate zones, with milder winters along the Gulf Coast and colder winters in the Texas Panhandle.
The Lone Star State’s housing occupancy rate is over 88 percent in its real estate market. The Texas Apartment Association estimates that 20% of its residents are renters.
- Home median value: $267,523
- 1.02 percent population growth
- Added jobs: 2.97 percent
- The median increase in home value: 20.5 percent
- Housing occupied: 88 percent
5. Ohio
Ohio, also referred to as the Buckeye State, is another Midwest state that appeals to real estate investors. With 11.8 million people, it is the eighth-most populous state in the US. This populous state is one of the best states to bjuy rental property in terms of popularity.
Its diversified geography includes beaches along Lake Erie to the north and undulating hills and cornfields to the south. There are roughly 5 million people employed in Ohio; most of them are employed in the manufacturing, technological, steel-making, and medical fields.
- Home median value: $190,984
- Growth of the population: 0%
- Added jobs: 0.67 percent
- Increase in median home value: 16.4%
- 90% of dwelling units are occupied
6. Alabama
People in the state of Alabama value low-income taxes and effective property tax rates, respectively. Savings-minded investors may benefit from this. Hence, such investors will find it to be one of the best states to buy rental property.
Landlords are free to impose whatever late fees they see fit because Alabama law does not forbid them. Additionally, this state has the nation’s second-lowest average property tax rate at just 0.48 percent.
- Average property cost: $172,932
- An increase in property value of 13%
- $50,540 is the median salary.
- 2.6% annual rate of population growth
7. Illinois
Illinois has earned a reputation as one of the top landlord-friendly markets because of established regulations on security deposits and a sizable tenant pool. Assume Illinois allows landlords to determine their rental and security deposit prices.
Property owners have up to 45 days after moving out to inspect the home before returning the security deposit thoroughly. Also on our list of eviction-friendly states is Illinois, which needs a 10-day notice before going to court.
- Home median value: $243,355
- Population expansion: -0.54%
- Added jobs: 0.84 percent
- Median home value growth during the previous year: 13.6%
- 90% of dwelling units are occupied
8. Georgia
The median home price in the state is 16% less expensive than the national average. In addition, the World Population Review ranks it the ninth state with the lowest cost of living.
The Peach State has a total occupancy rate of 88 percent for housing and a renter-occupied percentage of 36%. Georgia also boasts a 2.25 percent job growth rate, primarily in the mining, agriculture, and tourist industries.
- Home median value: $269,441
- 0.93 percent population growth
- Added jobs: 1.17 percent
- Annual median home value growth: 22.4 percent
- Housing occupied: 88 percent
9. Texas
Texas is a well-liked area for real estate investors for various reasons. Even more than states like Florida or California, known for attracting interstate emigration, the state’s population surged by approximately 3.5 million in less than ten years. Despite recent increases in housing values, they remain much lower than those in other large economic centers.
Landlord-tenant laws typically favor landlords, despite Texas having a somewhat higher property tax rate of 1.80 percent. The Texas housing market policy benefits landlords of rental properties when lease commitments are broken. That’s why people find it to be one of the best states to own investment property due to its landlord-friendly features.
- Home median value: $267,523
- 1.02 percent population growth
- Added jobs: 2.97 percent
- Year-over-year median home value growth: 20.5 percent
- Housing occupied: 88 percent
10. Missouri
In Missouri, real estate is a successful investment as well. Even though the median home price has been progressively increasing over the past three years, the Midwest continues to have one of the most affordable housing markets in the nation.
The eastern part of Missouri, on the Mississippi floodplains, is largely flat, while the state’s northern region features hilly terrain. It has eight shared boundaries and is a landlocked state.
- Home median value: $206,274
- 0.18 percent population growth
- Added jobs: 0.66 percent
- Year-over-year median home value growth: 16.2%
- Housing occupied: 87 percent
Final Words
The out-of-state rental property might be a wise choice, whether buying your first rental property or expanding an existing portfolio. You can quickly expand and diversify your portfolio by picking a sector where you can get a better return on investment, but you must consider everything. The most crucial aspect is finding the best states to buy rental property.
You may reduce risks and ensure that your out-of-state rental property is a wise investment by conducting careful research, employing reliable property management, and constantly allowing the data to drive your decision-making.
