The 20 Best States to Consider Investing in Real Estate in 2020

The word “best” is one of the most subjective in the English language. 

Best movie, best song, best actor, best car, best ice cream . . . best you name it, fill-in-the-blank. The truth is that everyone has a different opinion of what “best” really means.

Unless of course, you’re talking about the best U.S. states to invest in real estate in 2020. 

 

What Makes a State One of the Best?

Although not every investor will agree on the #1 best state, there are some key metrics rental property investors use to decide which states are the best to invest in:

  • Rising property prices and historical appreciation in market values
  • Affordable rental property can help keep your cash flow high and your equity growing, generating more profits over the long term
  • Population growth that creates a consistent and predictable demand for housing
  • Employment gains and job market growth give residents and businesses a reason to choose one state over another
  • High rental occupancy rates measure how much of the housing supply in a real estate market is vacant
  • Growing share of renter-occupied households indicate how attractive a housing market is for renters, due to factors such as housing affordability and lifestyle choices to rent rather than own, along with potential for future growth
  • States with low property taxes help keep the cost of living low and net cash flow from investment property high

 

20 Best States to Consider Invest in Real Estate in 2020

To compile this list of best states to invest in real estate, we’ve used the most recent data from ZillowCensus Reporter, and Data USA from Deloitte. There are pros and cons to each of these 20 best states depending on your specific investment strategy, so we’ve listed them in alphabetical order:

 

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1. Alabama

  • Median home value: $143,072
  • Median home value increase year-over-year: 5.5%
  • Occupied housing: 86%
  • Median rent: $1,088/month
  • Median rent increase year-over-year: 4.7%
  • Renter-occupied housing percentage: 32%
  • Population growth: 0.27%
  • Job growth: 1.59%
  • Property tax avg range (largest share of households): < $800

→View Alabama rental properties

 

2. Arkansas

  • Median home value: $139,907
  • Median home value increase year-over-year: 3.8%
  • Occupied housing: 84%
  • Median rent: $1,003/month
  • Median rent increase year-over-year: 1%
  • Renter-occupied housing percentage: 34%
  • Population growth: 0.32%
  • Job growth: - 0.25%
  • Property tax avg range (largest share of households): < $800

→View Arkansas rental properties

 

3. Florida

  • Median home value: $252,309
  • Median home value increase year-over-year: 3.6%
  • Occupied housing: 82%
  • Median rent: $1,716/month
  • Median rent increase year-over-year: 3.7%
  • Renter-occupied housing percentage: 34%
  • Population growth: 1.5%
  • Job growth: 2.71%
  • Property tax avg range (largest share of households): $3,000

→View Florida rental properties

 

4. Georgia

  • Median home value: $206,804
  • Median home value increase year-over-year: 4.9%
  • Occupied housing: 88%
  • Median rent: $1,434/month
  • Median rent increase year-over-year: 6.8%
  • Renter-occupied housing percentage: 36%
  • Population growth: 0.86%
  • Job growth: 2.45%
  • Property tax avg range (largest share of households): < $800

→View Georgia rental properties

 

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5. Idaho

  • Median home value: $298,257
  • Median home value increase: 9.5%
  • Occupied housing: 87%
  • Median rent: $1,418/month
  • Median rent increase year-over-year: 7.7%
  • Renter-occupied housing percentage: 29%
  • Population growth: 2.17%
  • Job growth: 2.23%
  • Property tax avg range (largest share of households): $800 - $1,499

 

6. Illinois

  • Median home value: $204,839
  • Median home value increase year-over-year: 1.2%
  • Occupied housing: 90%
  • Median rent: $1,613/month
  • Median rent increase year-over-year: 1.6%
  • Renter-occupied housing percentage: 34%
  • Population growth: - 0.48%
  • Job growth: 0.47%
  • Property tax avg range (largest share of households): + $3,000

→View Illinois rental properties

 

7. Indiana

  • Median home value: $159,690
  • Median home value increase year-over-year: 5.5%
  • Occupied housing: 90%
  • Median rent: $1,165/month
  • Median rent increase year-over-year: 4.7%
  • Renter-occupied housing percentage: 31%
  • Population growth: 0.38%
  • Job growth: 1.66%
  • Property tax avg range (largest share of households): < $800

→View Indiana rental properties

 

8. Iowa

  • Median home value price: $154,727
  • Median home value increase year-over-year: 2.8%
  • Occupied housing: 90%
  • Median rent: $1,041/month
  • Median rent increase year-over-year: - 1%
  • Renter-occupied housing percentage: 29%
  • Population growth: 0.33%
  • Job growth: 0.58%
  • Property tax avg range (largest share of households): + $3,000

→View Iowa rental properties

 

9. Kentucky

  • Median home value: $149,987
  • Median home value increase year-over-year: 5.2%
  • Occupied housing: 87%
  • Median rent: $1,089/month
  • Median rent increase year-over-year: 1.8%
  • Renter-occupied housing percentage: 33%
  • Population growth: 0.32%
  • Job growth: 1.19%
  • Property tax avg range (largest share of households): < $800

→View Kentucky rental properties

 

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10. Michigan

  • Median home value price: $176,977
  • Median home value increase year-over-year: 5.2%
  • Occupied housing: 86%
  • Median rent: $1,262/month
  • Median rent increase year-over-year: 2.2%
  • Renter-occupied housing percentage: 29%
  • Population growth: 0.34%
  • Job growth: 1.82%
  • Property tax avg range (largest share of households): + $3,000

→View Michigan rental properties

 

11. Mississippi

  • Median home value: $127,539
  • Median home value increase year-over-year: 3.8%
  • Occupied housing: 83%
  • Median rent: $1,101/month
  • Median rent increase year-over-year: 1.3%
  • Renter-occupied housing percentage: 32%
  • Population growth: 0.08%
  • Job growth: - 0.40%
  • Property tax avg range (largest share of households): < $800

→View Mississippi rental properties

 

12. Missouri

  • Median home value: $165,650
  • Median home value increase year-over-year: 3.9%
  • Occupied housing: 87%
  • Median rent: $1,042/month
  • Median rent increase year-over-year: 3.4%
  • Renter-occupied housing percentage: 33%
  • Population growth: 0.21%
  • Job growth: 0.28%
  • Property tax avg range (largest share of households): $800 - $1,499

→View Missouri rental properties

 

13. Nebraska

  • Median home value: $178,938
  • Median home value increase year-over-year: 5.0%
  • Occupied housing: 91%
  • Median rent: $1,203/month
  • Median rent increase year-over-year: 0%
  • Renter-occupied housing percentage: 34%
  • Population growth: 0.48%
  • Job growth: - 1.15%
  • Property tax avg range (largest share of households): + $3,000

 

14. Nevada

  • Median home value: $309,730
  • Median home value increase year-over-year: 2.3%
  • Occupied housing: 89%
  • Median rent: $1,561/month
  • Median rent increase year-over-year: 5.3%
  • Renter-occupied housing percentage: 43%
  • Population growth: 1.21%
  • Job growth: 0.3%
  • Property tax avg range (largest share of households): $800 - $1,499

 

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15. New Mexico

  • Median home value: $210,141
  • Median home value increase year-over-year: 5.8%
  • Occupied housing: 84%
  • Median rent: $1,270/month
  • Median rent increase year-over-year: 3.8%
  • Renter-occupied housing percentage: 34%
  • Population growth: 0.35%
  • Job growth: 0.57%
  • Property tax avg range (largest share of households): < $800

 

16. North Dakota

  • Median home value: $237,454
  • Median home value increase year-over-year: 1.8%
  • Occupied housing: 85%
  • Median rent: $1,355/month
  • Median rent increase year-over-year: - 1%
  • Renter-occupied housing percentage: 38%
  • Population growth: 0.62%
  • Job growth: - 1.51%
  • Property tax avg range (largest share of households): + $3,000

 

17. Ohio

  • Median home value: $153,593
  • Median home value increase year-over-year: 5.3%
  • Occupied housing: 90%
  • Median rent: $1,177/month
  • Median rent increase year-over-year: 4.2%
  • Renter-occupied housing percentage: 34%
  • Population growth: 0.26%
  • Job growth: 1.14%
  • Property tax avg range (largest share of households): + $3,000

→View Ohio rental properties

 

18. Pennsylvania

  • Median home value: $198,377
  • Median home value increase year-over-year: 4.0%
  • Occupied housing: 89%
  • Median rent: $1,349/month
  • Median rent increase year-over-year: 3.3%
  • Renter-occupied housing percentage: 31%
  • Population growth: 0.01%
  • Job growth: 1.63%
  • Property tax avg range (largest share of households): + $3,000

→View Pennsylvania rental properties

 

19. Texas

  • Median home value: $211,199
  • Median home value increase year-over-year: 3.0%
  • Occupied housing: 88%
  • Median rent: $1,575/month
  • Median rent increase year-over-year: 2.9%
  • Renter-occupied housing percentage: 38%
  • Population growth: 1.4%
  • Job growth: 2.17%
  • Property tax avg range (largest share of households): $3,000

→View Texas rental properties

 

20. West Virginia

  • Median home value: $107,136
  • Median home value increase year-over-year: 2.5%
  • Occupied housing: 82%
  • Median rent: $936/month
  • Median rent increase year-over-year: 1.8%
  • Renter-occupied housing percentage: 27%
  • Population growth: - 0.55%
  • Job growth: 3.03%
  • Property tax avg range (largest share of households): < $800

 

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How to Take the Next Step to Find Your Best State

Once you’ve identified the best states to invest in, the next step is to begin researching and investigating rental property on a local level. 

That’s because while a specific state may be good for investors on a macro level, cities and towns within each state may overperform (or underperform) the state averages. For example, many people today are moving to the suburbs and smaller secondary cities within the same state to escape from the high cost of living in bigger urban areas.

The fact is that nearly every state has places where real estate is good and some places where it is not. But by choosing the best states to invest in real estate in, then narrowing down your choice by city, you can exponentially increase your success as a real estate investor.

 

 

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Jeff Rohde

Author

Jeff Rohde

Jeff has over 25 years of experience in all segments of the real estate industry including investing, brokerage, residential, commercial, and property management. While his real estate business runs on autopilot, he writes articles to help other investors grow and manage their real estate portfolios.

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