Which are the best states to invest in real estate, today?

Investing in real estate is a great way to make money and secure your finances. But not every city or state in the United States offers the same chances for success. Before deciding where to buy property in the U.S., let’s consider factors such as population growth, job opportunities, affordability, and tax rates. Based on these, we’ll explore the best states to invest in real estate this year.

But first, let’s understand what it means to invest in real estate.

What does real estate investing mean?

Real estate investing involves buying properties to sell or rent for profit. Not just that, property investment offers numerous opportunities for individuals to build equity, diversify their investment portfolios, and achieve financial goals. However, it requires careful research, due diligence, and risk management to succeed in this dynamic and competitive market.

For instance, when selling, investors may renovate and sell at a higher price (in the form of house flipping), or wait for market conditions to improve for a profitable sale. 

Alternatively, they may rent out properties, to generate rental income to cover expenses or receive passive income. Investing can also involve buying shares in Real Estate Investment Trusts (REITs), that own and manage properties. 

Which factors help rate the best states to invest in real estate?

There are key metrics that help determine the best states for real estate investment. These include:

• Average home price: This gives an idea of property affordability and potential return on investment.
• Average household income: Higher incomes can indicate a stronger local economy and greater purchasing power for housing.
• Gross Domestic Product (GDP): It measures a state’s economic output. Higher GDP often correlates with a strong economy, attracting businesses and residents. Thus, increasing demand for real estate investment opportunities.
• Cost of living index: This measures the overall expenses for basic needs, affecting affordability and attractiveness for residents. The index compares living expenses across states. Higher values suggest higher living expenses.
• Home appreciation: Increasing property values can lead to higher returns for investors over time.
• Population growth: Growing populations often drive demand for housing, increasing property values and rental income potential.
• Job growth: A thriving job market attracts residents and businesses. And it contributes to housing demand and economic stability.
• Average property tax rate: Higher property taxes can impact affordability for homeowners and rental property investors. States with favorable tax policies, such as low property taxes or tax incentives for landlords can enhance overall ROI. 
• Rental vacancy rate: Low vacancy rates suggest high demand for rental properties, potentially leading to stable rental income. Moreover, landlord-friendly states with clear short term rental regulations make property management smoother and protect investors’ interests.

Read more: How much money do you need to buy a house?

Which are the best states to invest in real estate?

Keeping the above factors in mind, the states listed below have consistently demonstrated strong performance and present advantageous conditions for real estate investors. 

Please note that these states are presented in no specific order, neither ascending nor descending.

South Carolina

South Carolina exudes a quaint charm with its rich history and coastal beauty. It boasts cities such as Charleston and Columbia, renowned for their hospitality, excellent universities, and notably low crime rates. 

With property taxes at a mere 0.57%, and homes averaging $170,000, living costs are substantially lower compared to many other parts of the country, despite a recent 1% increase. The median household income stands at $54,800. All these reasons make South Carolina an attractive destination for both residents and potential investors.

Idaho

Idaho, known as the Gem State, offers a delightful living experience. With abundant state parks and a sparse population of under two million, Idaho maintains impressively low crime rates. The median household income is approximately $59,000. And it has shown an annual increase of over 8%, reflecting a robust economy and thriving job market. 

Property values are on the rise, averaging from $230,000 to over $250,000 in just a year. Rental costs are reasonable at $900 per month. Interestingly, the renters constitute 28.4% of the population, making Idaho a prime destination for real estate investment.

North Carolina

North Carolina presents a captivating blend of beachfront allure and mountainous landscapes, offering ample outdoor activities year-round. Cities such as Charlotte and Raleigh boast thriving job markets with numerous Fortune 500 companies. Yet, the median property values remain relatively affordable at approximately $183,200. With a median household income of $56,600, rising at nearly 7% annually, and property taxes around the national average, North Carolina offers an enticing prospect for both homeowners and renters alike.

Georgia

Georgia emerges as another promising state for property investment, with a median home cost of $186,500 and a remarkable 9.1% growth in the past year. 

The state’s cost of living is 6.6% lower than the national average, making it an appealing destination for prospective buyers. With Atlanta as a standout city, boasting diverse opportunities, Georgia continues to attract residents and investors.

Florida

Florida, with its abundant sunshine and diverse attractions, remains a sought-after destination for both residents and tourists. With a steadily growing population and a median property value of $245,000, Florida’s real estate market shows promise. 

Despite higher-than-average property taxes, the absence of state income tax and a burgeoning job market contribute to Florida’s appeal as an investment hub.

Alabama

Alabama emerges as a lucrative market for real estate investment, with a median home cost of $120,300 and a cost of living 17.7% lower than the national average. With cities such as Huntsville offering affordable rental options and a growing job market, Alabama presents compelling opportunities for investors.

Tennessee

Tennessee is a blend of scenic beauty, vibrant culture, and favorable tax policies, making it an attractive destination for real estate investment. With median property values at $191,500 and a low property tax rate of 0.71%, Tennessee provides affordable housing coupled with economic stability.

Colorado

Colorado’s stunning landscapes and thriving economy make it an appealing choice for real estate investment. Despite higher property values averaging around $394,000, the state’s flat income tax rate of 4.55% and robust job market contribute to its attractiveness.

Arizona

Arizona’s warm climate and robust job market position it as a promising destination for real estate investment. The average Arizona home price is approximately $426,680. It has gone up 2.4% over the past year. With median household incomes nearing the national average and property values on the rise, Arizona offers a compelling opportunity for investors.

California

California, with its diverse landscapes and vibrant culture, remains a prime destination for real estate investment despite its high cost of living. With median home values exceeding $530,000, the state’s bustling rental market provides long term opportunities for investors, albeit with higher rental costs.

Missouri

Missouri presents itself as an affordable option for real estate investment, with a median home cost of $159,500 and a cost of living 14.1% lower than the national average. With cities such as Springfield and Kansas City offering affordable rental options, Missouri appeals to both residents and investors.

Indiana

Indiana stands out as a budget-friendly option for real estate investment, with a low cost of living and steadily increasing property values. With median property values at $148,900 and a fixed income tax rate of 3.23%, Indiana offers affordability as well as economic stability.

Texas

Texas boasts a strong economy and favorable tax policies. All these make it an attractive destination for real estate investment. The median home price of a Texas house is approximately $342,400. However, the price fluctuates a lot depending on the specific city. With a median household income on par with the national average and a growing population, Texas presents compelling opportunities for investors despite higher property taxes.

Last thoughts

The top states for buying investment property offer everything potential home buyers and investors desire. They provide ample job opportunities to attract residents and maintain a satisfactory cost of living and quality of life to retain them. These states, with strong housing markets and diverse economies, may be poised to do well even in the future.

Written by Ramona Sinha. April 7, 2025

Ramona is the Senior Content Writer for Kukun. This experienced blogger uses simple and succinct words to decipher the complex phenomenon called life. She has written articles covering a broad range of topics, such as real estate, lending and mortgage, finance, business, taxation, home designs, home improvement projects, decor concepts, and more. An avid traveler, she’s a digital nomad at heart and an animal lover from the depth of her soul.