In this article, I will share the ten best states for rental property investment in the US with average rent and the reason for it. Plus, which states have the lowest rent and which has the highest? But know this, deciding to become a rental property owner is a big step toward your financial freedom.
Here you need a good return on investment (ROI) and a good opportunity for a stable cash flow. That is why just analyzing a state may not be enough for you. You have to check the local real estate market too.
Ten Best States for Rental Property in the US
Here are the three most important factors to consider when buying rental units in any state in the US.
- Housing Demand: Purchase a rental property where the demand is high and people are moving to that area. Places like Florida, Texas, Tennessee, North Carolina, and Georgia are continuously filling with new people around the country, increasing the housing demands.
- Total Valuation: Also consider the valuation or price-to-income ratio. Here, Texas, Tennessee, North Carolina, and Florida are some of the best states for valuation increment.
- Property Taxes: Taxes are the biggest expense in rental property investment, and you must reduce them. States like Alabama and Idaho have the second-lowest property tax rate in the country.
After analyzing these things, you will want to analyze the location and start your due diligence process. But first, analyze these three and then move on. Also, look at the Money Magnet places where the chance of profitability may increase for you.
Table of Contents
1. Florida
Florida is one of the most expensive places on the list of best states for rental property investment and the most demanding one. It is also one of the most popular tourist destinations in the US. Market research says about 30 percent of the population lives on rent, with an average rent of $950 per month for a one-bedroom unit.
- Average rent: $950
The city of Orlando, Jacksonville, and Tampa are the top places to buy rental properties in Florida. Yes, it’s expensive, but the demand is rising as more people are moving to the state for a better living.
Read also: The best type of rental properties to make money
2. Texas
In Texas, the population is rising, thanks to the recent pandemic and its after-effects. The mid-sized metro areas benefited the most as the trend for working from home was booming. As a result, the housing market saw a huge jump.
- Average rent: $840
Research says about 35 percent of the population lives on rent, with an average rent of $840 for a one-bedroom unit. The city of Houston, San Antonio, Arlington, and Austin are the best-performing places in Texas.
3. Georgia
In Georgia, about 30 percent of the population are renters, with an average rent of $825 for one bedroom unit. Atlanta is one of the best cities to buy rental units in Georgia.
- Average rent: $825
The best part is in Georgia, the living cost is low, about 7 percent lower than the average in the US, and the value appreciation is more than 10 percent, which makes it ideal to invest in properties.
4. North Carolina
North Carolina is a stable economy and attracts the most business and people to live there. Data sats about 29 percent of the population lives on rent in this state, with an average rent of $740 for one bedroom unit.
- Average rent: $740
The city of Raleigh, Charlotte, and Durham is the top place to buy rental units in North Carolina. The average ROI is also good, over 20 percent.
5. Tennessee
In Tennessee, the cost of living is 13 percent lower than the average, which makes it a wonderful place to live for rent and get a good ROI as a landlord. The average rent is $700 for a one-bedroom unit, and over 29 percent of people live on rent.
- Average rent: $700
The city of Nashville is one of the best for rental investments in Tennessee.
6. Indiana
Indiana is one of the best states for rental property investment. Most agents record this state to tenants for its amazing low living cost, about 18 percent lower than the average in the country. The average rent is $670 for one bedroom unit.
- Average rent: $670
Over 27 percent of the people live on rent. The city of Indianapolis is one of the best places to invest in rental units in Indiana.
7. Missouri
The average rent in Missouri is $660 for a one-bedroom unit, and over 27 percent of the people live on rent here, with a low living cost of about 14 percent lower than the rest.
- Average rent: $660
Kansas City and Springfield are some of the best cities in Missouri for rental property investment.
8. Alabama
Alabama is another low-cost living place in the US. The cost of living is 17 percent lower than the average. The average rent is $650 for one bedroom, and over 25 percent of people live son ren there.
- Average rent: $650
Huntsville is one of the best cities in Alabama for rental property investors. It’s best for both investment and living. Have a look.
9. Ohio
Yes, Ohio has swag, but that does not mean you swag like Ohio. Know the market first. The average rent for one bedroom unit is $640. About 30 percent of the population lives on rent, and the cost of living is 18 percent lower than in the rest of the country.
- Average rent: $640
Columbus and Cincinnati are two of the best cities in Ohio for you to invest in rental properties.
10. Idaho
The last one is Idaho on our list of best states for rental property investment. About 26 percent of people live on rent, with an average rent of $630 per unit. Boise is one of the best cities in Idaho for rental property investment.
- Average rent: $630
Now let’s learn the highest and the lowest rent in US states. Here is the list.
US States with the Highest Rent
- Washington
- Colorado
- New Jersey
- Hawaii
- California
- Massachusetts
- Maryland
- New York
- Virginia
- Florida
US States with the Lowest Rent
- Mississippi
- West Virginia
- Arkansas
- South Dakota
- Kentucky
- Iowa
- Alabama
- North Dakota
- Oklahoma
- Ohio
Last Words
So these are the best states for rental property investment in the US. First, understand the market, the supply and the demand, the housing market, and the valuation factor, and then go for the location. Keep the average cost of living in mind and then buy properties. You will get a good ROI. Thanks for making it to the end. See you soon.
