Many home buyers have found the real estate market difficult in recent years, but those who have been able to do so have seen a great return on their investment.
Homes are gaining at an unprecedented rate, with sale prices increasing by about 20% between 2021 and 2022.
Some investors are looking to rental homes as a source of prospective returns due to the significant rise in home values.
While big investors are the majority of those profiting from the current market situation, small-scale investors may also benefit from the current market conditions.
However, consider how quick changes in real estate values may influence investments in the short and long term.
Since the pandemic began, rising property prices have been a prominent topic, but they have demonstrated a lot of instability over time, especially when compared to rent.
For instance, during the early to mid-2000s real estate bubble, prices soared at a rapid pace before collapsing when the bubble burst.
Then, until the latest increase in 2020, home values had an inconsistent rebound. In the meanwhile, except of a dip during the Great Recession and the previous year or so, the pace of growth in rentals has remained consistent between 2% and 5% over the years.
Making the decision to become a property investor is a big step. It’s critical to conduct thorough research on the real estate market in order to achieve a high return on your investment.
The location of your property investment is one of the most significant elements to consider. Here are the 5 best states to invest in real estate if you need some help.
5 of the Best States for Real Estate Investing
When it comes to real estate, location isn’t the only factor to consider. It can, however, assist you to narrow down the areas where you have a decent possibility of making money with real estate.
Here are some of the greatest states to invest in if you are a first-time property investor.
- North Carolina
North Carolina is one of the greatest states to invest in property.
The median property price in the city is $187,300, up 8.5 percent in the last year. North Carolina’s cost of living is 9.4 percent cheaper than the national average.
Renters account for 29.2 percent of the population. A studio costs $697, a one-bedroom costs $731, a two-bedroom costs $875, a three-bedroom costs $1172, and a four-bedroom costs $1430. Raleigh, Durham, and Charlotte are the best cities in North Carolina to invest in.
Indiana is one of the top states for real estate right now.
The median property price in the city is $142,600, up 8.9% in the last year. The cost of living in Indiana is 17.9% lower than the national average.
Renters account for 27.1 percent of the population. A studio costs $573, a one-bedroom costs $662, a two-bedroom costs $825, a three-bedroom costs $1084, and a four-bedroom costs $1221. Indianapolis is one of Indiana’s greatest locations for investing.
Georgia is next on the list of the top states to invest in real estate. The median property price in the city is $186,500, up 9.1% in the last year. Georgia’s cost of living is 6.6 percent cheaper than the national average.
Renters account for 30.8 percent of the population. A studio costs $790, a one-bedroom costs $821, a two-bedroom costs $958, a three-bedroom costs $1256, and a four-bedroom costs $1520. Atlanta is one of Georgia’s greatest places for investment.
On this list, Florida is one of the most expensive states.
Buying real estate in this state, however, is still an excellent investment because it is home to some of the country’s most popular tourist spots.
The median property price in the city is $237,100, up 7.8% in the last year. The cost of living in Florida is 2.8 percent higher than the national average.
Renters account for 27% of the population. A studio costs $832, a one-bedroom costs $945, a two-bedroom costs $1174, a three-bedroom costs $1584, and a four-bedroom costs $1903. The top cities to invest in Florida are Orlando, Jacksonville, and Tampa.
Texas comes in last on our list of the greatest areas to invest in real estate.
The median property price in the city is $195,000, up 6.7 per cent in the last year. The cost of living in Texas is 6.1 per cent cheaper than the national average.
Renters account for 33% of the population. A studio costs $738, a one-bedroom costs $841, a two-bedroom costs $1036, a three-bedroom costs $1291, and a four-bedroom costs $1721. The top cities to invest in Texas include Houston, Arlington, Austin, and San Antonio.
Other Considerations When Investing in Real Estate
1. Property Taxes
When buying real estate, investors should also examine the state’s property tax rate. Atlanta has one of the country’s lowest property tax rates. Property owners pay roughly $950 in taxes each year because the effective property tax rate is 1.5 percent.
Georgia also has a 4 percent effective property tax rate, which implies that property owners pay around $1,246 in annual property taxes.
Investors may also be interested in buying real estate in states with a high migration rate. In the last year, a large number of people have moved to Florida, Texas, North Carolina, and Georgia. As a result, these states have higher housing demand.
When determining whether or not to buy real estate in a certain state, some investors may want to examine the price-to-income ratio. Texas, North Carolina, and Georgia are some of the top states in the United States to invest in real estate based on valuation.
4. Money Magnets
It’s also worthwhile to invest in states that attract large sums of money, as this helps to drive up housing prices. Florida, Texas, and North Carolina are among the best money-drawing states.
Choose with Confidence
Investing in real estate may be a risky business. Because you are investing your money, you want to make sure you are making the best decisions possible. Given the economy’s uncertainty, it’s prudent to invest in states with the strongest real estate markets.
Consider the 5 best states to invest in real estate listed above for a decent return on investment.
Once you have discovered the ideal property, check our Foreign Investors Program page for information on how to get started with your real estate investment.
As you can see, deciding where to buy an investment property isn’t a 15-minute process that you can quickly scroll through. Instead, it’s a time-consuming procedure that demands patience, commitment, and concentration.
We were able to compile a list of the most appealing places based on their locations and attractions for various groups of residents.
In 2022, you should concentrate your efforts on North Carolina, Charlotte, and other cities across the United States that provide a consistent rental income for potential investors.