Investing in real estate is all about location, location, location. But the most important question for real estate investors is, exactly what location is the BEST for investing?
There is no single best location to invest in real estate. If that were the case, every investor would be piling into the same place and quickly diminish the potential returns of investing there.
While not every investor will agree on the best states for 2022, there are some key metrics rental property investors use to decide which states will give them the most return.
- Rising property prices and historical appreciation in market values.
- Affordable rental properties can help keep your cash flow high and your equity growing, generating more profits over the long term.
- Population growth 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 indicates 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 the potential for future growth.
- States with low property taxes help keep the cost of living low and net cash flow from investment property high.
New Mexico
- Median home value: $259,771
- Median home value increase year-over-year: 18.7%
- Occupied housing: 84%
- Average rent: $1,351/month
- Average rent increase year-over-year: 5.9%
- Renter-occupied housing percentage: 32%
- Population growth: 0.07%
- Job growth: 5.59%
- Property tax avg. range: < $800
Massachusetts
- Median home value: $400,000
- Median home value increase year-over-year: 12.6%
- Occupied housing: 62.5%
- Average rent: $1,336
- Average rent increase year-over-year: 4.1%
- Renter-occupied housing percentage: 38%
- Population growth: -.6%
- Job growth: 5.52%
- Property tax avg. range: + $3,000+
Georgia
- Median home value: $186,500
- Median home value increase year-over-year: 9.1%
- 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 avg. range: < $800
Alabama
- Median home value: $120,300
- Median home value increase year-over-year: 6.9%
- Occupied housing: 69.2%
- Average rent: $811
- Average rent increase year-over-year: 7.8%
- Renter-occupied housing percentage: 25.9%
- Population growth: 0.3%
- Job growth: 3.3%
- Property tax avg. range: > $800
New Jersey
- Median home value: $430,000
- Median home value increase year-over-year: 17%
- Occupied housing: 93%
- Average rent: $1,800
- Average rent increase year-over-year: 27%
- Renter-occupied housing percentage: 64.69%
- Population growth: -.27
- Job growth: 4.6%
- Property tax avg. range: < $3,000+
There will always be markets outside of these top states that can offer cash-flowing rental property opportunities. It’s important to always perform your due diligence when purchasing a rental property to ensure that the numbers work for your particular situation and goals. Contact First Equity Funding today to turn your real estate investment dreams into reality.
