Investing in rental property can be an attractive prospect, but potential investors should be aware of the differences in owning property between one state and another.
Property taxes, rental laws, population, job growth potential, and more — these can all affect your investment, for better or worse.
While “best” is an intensely subjective word and your criteria may differ from that of another investor, this article will offer ten of the best states to own property based on the advantages they offer to owners.
Florida
Bright and sunny Florida is an attractive option for aspiring landlords. There is a high demand from both residents and tourists, and there are a lot of tourists — it is the second-most visited state in the country.
It also has healthy growth in its population and GDP per capita, and is one of the states that charges no income tax. A downside, however, is that its property taxes are higher than the average.
- Median home value: $328,576
- Median home value increase year-over-year: 23.9%
- Occupied housing: 82%
- Average rent: $2,271/month
- Average rent increase year-over-year: 37.56%
- Renter-occupied housing percentage: 36%
- Population growth: 0.84%
- Job growth: 2.57%
- Property tax average range (largest share of households): $3,000
Colorado
Colorado is a good state to pick when investing in rental property. It is among the top ten states in both home value appreciation and population growth, and it also enjoys a decent income growth.
The state is also geographically diverse, with mountainous terrain, vast plains, desert lands, desert canyons, and mesas that attract many tourists. Its property tax rate is among the lowest in the country, at around 0.51%.
- Median home value: $394,600
- Median home value increase year-over-year: 20.82%
- Occupied housing: 91%
- Average rent: $1,884
- Average rent increase year-over-year: 11.45%
- Renter-occupied housing percentage: 34%
- Population growth: 1.11%
- Job growth: 1.81%
- Property tax average range (largest share of households): $1,113
Nevada
Nevada is one of the best states to own rental property because home prices in the state are rising at an extremely fast rate.
This means that property owners can expect to see quick returns from rentals after investing in property.
Nevada is a tourist hotspot and its population growth is among the top ten in the nation, so you can anticipate significant demand. It is also among the states with lower property taxes and no income tax.
- Median home value: $404,060
- Median home value increase year-over-year: 25.6%
- Occupied housing: 89%
- Average rent: $2,065/month
- Average rent increase year-over-year: 34.46%
- Renter-occupied housing percentage: 43%
- Population growth: 1.51%
- Job growth: 3.31%
- Property tax average range (largest share of households): $800–$1,499
Washington
Washington is another decently populous state with a good outlook for population growth, home value appreciation, and median household income.
While Seattle is one of the most expensive cities to buy property in, many areas of Washington still present an attractive option for investing in property.
Washington is another state with no income tax, but its property tax rate hovers around the average.
- Median home value: $387,600
- Median home value increase year-over-year: 21.02%
- Occupied housing: 92%
- Average rent: $2,001
- Average rent increase year-over-year: 27.49%
- Renter-occupied housing percentage: 37%
- Population growth: 1.05%
- Job growth: 2.61%
- Property tax average range (largest share of households): $2,134
Hawaii
Hawaii has a significant barrier to entry for property owners with a limited budget — it has the highest median home value in the country. In addition, it has a high income tax, which can cut into your earnings if you want to rent out your property.
However, to those that can afford buying property in the state, it offers two key benefits: it has the lowest property tax rate in the country and it is a prime tourist destination.
- Median home value: $669,200
- Median home value increase year-over-year: 18.5%
- Occupied housing: 85%
- Average rent: Insufficient data
- Average rent increase year-over-year: Insufficient data
- Renter-occupied housing percentage: 40%
- Population growth: -0.325%
- Job growth: 0.0413%
- Property tax average range (largest share of households): $606
Idaho
Idaho, well-known for its expansive protected wilderness, boasts an extremely high home value appreciation. It has the highest rate on this list, in fact.
This increase can be attributed to low mortgage rates and cost of living. As a property owner, you can expect a steady demand from buyers and renters.
- Median home value: $446,550
- Median home value increase year-over-year: 38.2%
- Occupied housing: 87%
- Average rent: $1,429/month
- Average rent increase year-over-year: 21.72%
- Renter-occupied housing percentage: 28%
- Population growth: 1.87%
- Job growth: 4.32%
- Property tax average range (largest share of households): $800–$1,499
Georgia
Georgia is a safe option for aspiring property owners, with a relatively low cost of living and a good job growth rate, especially in the sectors of tourism, agriculture, and mining.
You can expect demand from renters all year round, with the rate of occupied housing at 88%. Its property tax rate hovers around the middle, at around 0.92%.
- Median home value: $269,441
- Median home value increase year-over-year: 22.4%
- Occupied housing: 88%
- Average rent: $1,666/month
- Average rent increase year-over-year: 29.34%
- Renter-occupied housing percentage: 36%
- Population growth: 0.93%
- Job growth: 1.17%
- Property tax average range (largest share of households): < $800
Texas
Texas is the second-largest state by both land size and population. This means its residents experience a range of climate zones, and choosing where you’re investing in rental property can have an effect on the viability of your investment.
Cities like Austin, Corpus Christi, Dallas, El Paso, and San Antonio typically have a higher amount of tourists. However, demand is high for housing even among residents due to the high population and occupied housing rate of 88%.
- Median home value: $267,523
- Median home value increase year-over-year: 20.5%
- Occupied housing: 88%
- Average rent: $1,448/month
- Average rent increase year-over-year: 10.94%
- Renter-occupied housing percentage: 38%
- Population growth: 1.02%
- Job growth: 2.97%
- Property tax average range (largest share of households): + $3,000
Missouri
Investing in rental property in Missouri can be a profitable investment. While the rate of home appreciation may not be as high as other states, it is still a steady increase.
Missouri is one of the best states to own rental property for investors looking for an affordable housing market and a low cost of living, due to low fuel taxes and utility costs. Its property taxes fall into the middle range, at around 0.97%.
- Median home value: $206,274
- Median home value increase year-over-year: 16.2%
- Occupied housing: 87%
- Average rent: $1,235/month
- Average rent increase year-over-year: 3.3%
- Renter-occupied housing percentage: 33%
- Population growth: 0.18%
- Job growth: 0.66%
- Property tax average range (largest share of households): $800 – $1,499
Indiana
Indiana has an affordable median home value and a relatively low property tax average.
It has a high rate of occupied housing at 89% and renter-occupied housing at 31%, which means you can expect a good demand from renters if you are looking to be a landlord. It is also the 17th most populous state in the country, with varied geography and a warm continental climate.
- Median home value: $197,767
- Median home value increase year-over-year: 17.4%
- Occupied housing: 89%
- Average rent: $1,208/month
- Average rent increase year-over-year: 7.15%
- Renter-occupied housing percentage: 31%
- Population growth: 0.60%
- Job growth: 1.53%
- Property tax average range (largest share of households): < $800