Real estate investing can be a lucrative business, but in order to make the most of your money, you need to be aware of the best areas to buy and sell property in.
The demand for housing, current prices, and other market trends that are prevalent in each state should all be taken into consideration by astute investors. Furthermore, the profitability of property investments in any given location can be affected by a wide variety of factors, such as the regulations imposed by the state and the percentage of occupied homes.
In the following section, we take a look at the states that offer the best potential returns on investments in real estate, as well as important metrics that can assist you in determining where you should put your money for the greatest return.
Putting together a ranking of the best states for real estate investments
Some key statistics can help you measure the viability of investing in a particular area. While there is no single set of criteria that can identify the states that offer the highest profitability for property investors, there are some key statistics that can do so.
A good example of this would be property prices that are still relatively affordable but are continuing to rise. In addition, factors such as a rising median income and an expanding population may result in a demand for housing that is both consistent and predictable.
We analyzed the most recent data made available by Zillow and the United States Census Bureau in order to compile this ranking of the top states in which to make real estate investments in 2021. We ranked them based on how much their median property prices have increased over the past year as well as how much their market values have increased.
1. Idaho
- The median price of a home is $414,890.
- Property value appreciation: 34.6%
- Median income: $55,800
- The growth rate of the population is 14%
The state of Idaho, which can be found in the northwest corner of the United States, is well-known for its natural beauty and extensive wilderness areas that are protected.
Because it has the highest median property price and value appreciation over the course of the previous year on this list, property investors may find it to be an attractive investment opportunity. The decrease in interest rates on mortgages and the lower cost of living, which is 2% lower than the national average, are contributing factors in the rise in the value of real estate.
With a population that is expanding at a rapid rate and an occupancy rate of 87% in existing homes, you can anticipate a consistent demand from buyers and renters throughout the entire year. In addition to this, the state is experiencing a job growth rate of 2.2%.
2. Florida
- The median price of a home is $305,266.
- The growth in value of the property was 18%.
- Median income: $55,660
- The growth rate of the population is 14.2% per year.
Florida is the state with the eighth highest population density in the United States, with a population of approximately 22 million people. Even though it is one of the most sought-after places in the United States in which to retire or take a vacation, the cost of real estate there is still competitively priced.
Although the cost of living in the Sunshine State is 2% higher than the national median, the typical home price in the state is approximately $6,000 more expensive than the national median.
In terms of its location, the state is located on a peninsula that is bounded on three sides by water: the Gulf of Mexico, the Straits of Florida, and the Atlantic Ocean. A high occupancy rate of 82% can be attributed to the region’s pleasant weather, which makes it appealing to homebuyers as well as renters.
3. North Carolina (US state)
- The median price of a home is $254,625
- Appreciation in property value equaling 17.4%
- Median income: $54,600
- The rate of population increase is 10% per year.
North Carolina, which can be found in the Southeastern part of the United States, is separated into two distinct climate zones by the Appalachian Mountains to the west and the Atlantic Coastal Plain to the east.
The cost of living in the state is 9% less expensive than the average cost of living across the country. In addition, cities such as Durham, Charlotte, and Raleigh are experiencing robust growth in terms of the number of employment opportunities available to millennials and young professionals.
In particular, Durham County is home to five new households and 11 new people every single day, which contributes to the county’s consistent demand for real estate.
Nearly one-third of the people living in North Carolina are renters, who shell out an average of $1,172 per month for three-bedroom apartments and $697 for studio apartments.
4. Georgia
- The median price of a home is $251,514
- Appreciation in property value equaling 17.1%
- Median income: $58,700
- The rate of growth in population is 9.6% per year.
The median price of a home in the state is 16% less than what it would be in the rest of the country. In addition, according to the World Population Review, it is the ninth state that has the lowest cost of living.
The Peach State has a total occupancy rate of 88 percent for its housing units, while the percentage of rental units that are occupied is 36 percent.
In addition, the job growth rate in Georgia is relatively high, coming in at 2.25 percent, primarily driven by the tourism, agriculture, and mining industries.
In particular, Atlanta, the state capital, has a population of over 500,000 people and a rate of job growth that is even higher than the average growth rate for the nation. Because the city is home to the headquarters of numerous major corporations, such as Coca-Cola and Delta Airlines, there is an increased demand for single-family rentals.
5. Texas
- The median price of a home is $252,422
- Growth in property values at a rate of 16.6%
- Median income: $61,870
- The growth rate of the population is 15.3% per year.
Texas, which can be found in the middle of the South Central United States, is the state with the most residents and the most land area. Because of its size, it spans multiple climate zones, with winters that are typically warmer near the Gulf Coast and winters that are typically more bitter in the Texas Panhandle.
In terms of its real estate sector, the state known as the Lone Star has a housing occupancy rate that is higher than 88 percent. The Texas Apartment Association estimates that approximately 20% of the state’s population is comprised of renters.
Additionally, as the state’s population of 29 million people continues to grow by 1.4% each year, there is a continuing rise in the demand for housing. Additionally, the job growth rate in Texas is quite high, coming in at 2.17%.
6. Tennessee
- The median price of a home is $236,323
- Growth in property values at a rate of 16.1%
- Median income: $53,320
- The rate of growth in population is 7.6% per year.
Tennessee is a state that cannot be reached by water and is encircled by nine other states. It has a topography that is extremely varied, consisting of mountainous regions close to Clingmans Dome and flat, low-lying areas closer to the Mississippi River.
Cities in this state are frequently overlooked in favor of their neighbors from 3 bedroom condo in playa del carmen such as St. Louis and Atlanta; however, Tennessee offers a stable foundation for real estate investments that can result in profitable profits.
For example, according to WalletHub, Nashville, the state capital and the city with the most residents, is home to the fourth-best real estate market in the entire country. The continuously improving job market and low unemployment rate attract a steady stream of inbound migration, which helps to maintain a robust local rental market.
7. Ohio
- The median price of a home is $184,247
- Growth in property values at a rate of 15.2%
- Median income: $56,600
- The growth rate of the population is 1.3%
Ohio, which is also commonly referred to as the Buckeye State, is yet another state in the Midwest that is appealing to real estate investors. With a total population of 11.8 million people, it is the seventh most populous state in the United States.
Its varied topography includes cornfields and rolling hills in the south, and beaches along Lake Erie along the northern border of the territory.
In terms of employment, Ohio is home to approximately 5 million people, the majority of whom are employed in the state’s thriving manufacturing, technological, and steel production sectors, as well as in the state’s medical professions.
8. Missouri
- The median price of a home is $196,746.
- A 14.7% increase in the value of the property
- Median income: $55,461
- The rate of growth in population is 2.5%
Additionally, real estate can be a lucrative investment in the state of Missouri. Despite the fact that the median price of a home has been on an upward trend for the past three years, it continues to be one of the housing markets with the lowest prices in both the Midwest and the rest of the country.
There are approximately 28% of people in the population who are renters, and the average rent for a studio is $570, while the average rent for a two-bedroom unit is $827. In addition, the state’s low fuel taxes and utility costs contribute to a cost of living that is approximately 14% lower than the average for the United States.
The northern regions of Missouri are hilly, while the eastern portion of the state, which is located on the floodplains of the Mississippi River, is relatively flat. It is not connected to any other states by water and has borders with eight other states.
9. Indiana
- The median price of a home is $188,505
- Appreciation in property value equaling 14.3%
- Median income: $56,300
- 3.8% annual increase in human population
The state of Indiana, which can be found in the middle of the United States’ northern region, has a varied topography and a warm continental climate. The south of the state is hilly and canyon-filled, in contrast to the relatively flat northern areas that are bounded to the northwest by Lake Michigan.
With a population of over 6.8 million people, Indiana is the 17th most populous state in the United States and the 38th largest state in terms of land area. Because of the relatively low cost of living in this state, it is one of the best places to make an investment.
For example, the average annual property tax in this state is only $1,214, making it one of the states with the lowest property taxes in the United States. The average cost of closing on a mortgage in Indiana is $2,627, which is significantly less than the national average.
10. Alabama
- The median price of a home is $172,932
- Appreciation in property value equaling 13%
- Median income: $50,540
- The rate of growth in population is 2.6% per year.
Alabama is a state located in the Southeastern region of the United States, and it shares borders with the states of Tennessee, Mississippi, Georgia, Florida, and the Gulf of Mexico. It has a tropical climate with high humidity and some of the country’s longest waterways that are navigable.
Another state that offers potential for profitable real estate investments is Alabama, which has almost five million people in its population and a varied economy. As a result of the state’s stable employment base, particularly in the fields of education and manufacturing, as well as government jobs, there is a growing demand for single-family homes and rentals.
In addition to that, the housing occupancy rate is quite high at 86%, and the median property value is the lowest it is on this list. Property taxes are also typically within reach, coming in at $800 or less on average.