As the US housing market 2019 is booming, it’s getting harder for real estate investors to decide where to buy an investment property. This is because while there are many top locations for real estate investing across the nation, many of them don’t offer affordable opportunities for the average or beginner investor. And while experts predict a cool down in the US housing market this year, prices are not expected to drop any time soon – they’re just rising at a slower rate. According to Realtor.com, the national median price of homes listed for sale in the United States is $310,000 which is a 7% year-over-year growth.
If you’re among the many investors on a budget and don’t have the liberty to take risks on expensive real estate, don’t let this information discourage you from buying an investment property in 2019! In fact, it seems that rising home prices have done little to dampen investor demand as, according to The Wall Street Journal, real estate investors are buying more of the US housing market than ever before. This shows you that there are still money-making opportunities in real estate which you should not miss out on. You just need to know which the cheapest states to buy a house for investment are.
If you’re interested in learning where the cheapest places to buy a house in the US are, just keep reading. Based on research, we’ve listed the 20 most affordable real estate markets in 2019 with a brief description to help you decide where to invest.
What to Consider Before Investing in the Cheapest States to Buy a House
Before we start the list, we need to make one thing clear: while cheap real estate is attractive for getting into real estate investing, price alone does not guarantee high returns. When determining where to buy an investment property, investors must choose based on both affordability and profitability! Meaning, if you find a cheap house for sale but it’s not in a good location for making money in real estate, then forget about it. You should never sacrifice your return on investment for the sake of cheap properties!
You should only invest your money in locations where investment properties can generate a good cap rate and good cash on cash return. While these real estate analysis metrics depend on the property and how you buy it, the real estate market heavily influences them as well. Though it’s not the easiest task for an investor to find properties that are affordable and perform well at the same time, it’s definitely possible and worth the effort.
At Mashvisor, we make it easy for you to find such properties in the cheapest states to buy a house using the Property Finder tool. All you’ve got to do is set your investment criteria (including your budget) and the location you’re interested in. The tool will then give you a list of homes for sale in that location that best meet your criteria along with data that projects how well they would perform as investment properties. You can start using this tool right now with a free Mashvisor account!
Best States to Buy Affordable Real Estate Investment Property
Now that you know how to find affordable properties for sale, let’s discover where you should be looking for them. After thorough research, we have found 20 states in the US housing market that have a median house price below the national price. Using Mashvisor’s Airbnb Calculator, we list data and analytics regarding what kind of profit you can expect from investing in each of the cheapest states to buy a house. You’ll notice that Mashvisor’s data includes the estimated returns for both traditional and Airbnb rentals. This will help you choose the ideal investment strategy that will work for both the location and the property itself.
* Please note that ROI values are low because these are state-wide averages and you can find investment properties with higher values when searching on our platform! To learn more about us, click here.
1. West Virginia (Median Property Price: $210,173)
Wondering where the cheapest place to buy a house in the United States is? West Virginia is your answer. Beautiful natural areas and rich history are not the only things this state has to offer. Besides being the most affordable housing market in 2019, West Virginia has a property tax rate of 0.59% which is one the lowest in the country, according to WalletHub. Although it’s a seller’s market, real estate investors can still find local markets that are buyer-friendly. So, if you’re thinking of buying a cheap house for investment in West Virginia, you won’t be disappointed.
- Price Per Square Foot: $103
- Price-to-Rent Ratio: 16
- Traditional Rental Income: $1,116
- Airbnb Rental Income: $2,008
- Traditional Cash on Cash Return: 2.5%
- Airbnb Cash on Cash Return: 5.5%
- Airbnb Occupancy Rate: 41.6%
2. Iowa (Median Property Price: $213,032)
Despite being relatively small, Iowa is one of the best states to invest in real estate in 2019. Not only does it offer cheap investment opportunities, but it has a low unemployment rate of just 2.4% and a booming economy. Also, according to the Iowa Association of Realtors, “higher wages and favorable mortgage rates have been a terrific driver of housing stability in recent years. What is different about this year so far is that prices are not rising as quickly”. This further proves that if you’re looking to buy cheap investment properties in 2019, Iowa is one place to consider.
- Price Per Square Foot: $126
- Price-to-Rent Ratio: 15
- Traditional Rental Income: $1,166
- Airbnb Rental Income: $2,038
- Traditional Cash on Cash Return: 1.5%
- Airbnb Cash on Cash Return: 3.7%
- Airbnb Occupancy Rate: 43.0%
3. Ohio (Median Property Price: $217,130)
Ohio is the 7th most populous and the 10th most densely populated state in the country, meaning there’s definitely demand for housing. Nonetheless, Ohio is still considered one of the cheapest states to buy a house. What’s more, Realtor.com named Ohio as one of the hottest real estate markets in America earlier this year. Also, when comparing states based on Mashvisor’s data, you’ll notice that Ohio has the highest Airbnb cash on cash return. So, if you’re looking for where to invest in real estate for Airbnb in 2019, Ohio is definitely a top location to consider.
- Price Per Square Foot: $156
- Price-to-Rent Ratio: 15
- Traditional Rental Income: $1,242
- Airbnb Rental Income: $2,370
- Traditional Cash on Cash Return: 1.9%
- Airbnb Cash on Cash Return: 6.4%
- Airbnb Occupancy Rate: 49.7%
4. North Dakota (Median Property Price: $226,694)
Home prices in North Dakota have increased over the past couple of years, but the state is still one of the most affordable real estate markets in 2019. The average property tax rate of 1.01% is relatively low which is good news if you’re considering out-of-state real estate investing to reduce your tax costs and expenses. Furthermore, homes in North Dakota appreciated by 47.28% over the last 10 years, which is one of the highest appreciation rates in the country according to NeighborhoodScout.
- Price Per Square Foot: $127
- Price-to-Rent Ratio: 15
- Traditional Rental Income: $1,253
- Airbnb Rental Income: $2,311
- Traditional Cash on Cash Return: 1.9%
- Airbnb Cash on Cash Return: 4.3%
- Airbnb Occupancy Rate: 48.8%
5. Indiana (Median Property Price: $236,058)
According to the Indiana Association of Realtors, the median price of homes for sale in the state grew by 4.2% last year and is expected to keep growing in 2019 and outperform the national average. Some would think this means Indiana homes are expensive, but that’s not the case! Looking at the median price and comparing it to the national median, you’ll realize Indiana is actually among the cheapest states to buy a house for investment. Besides being an affordable market, Indiana is also one of the most landlord friendly states in 2019 and has a low property tax rate of 0.87%.
- Price Per Square Foot: $109
- Price-to-Rent Ratio: 18
- Traditional Rental Income: $1,106
- Airbnb Rental Income: $2,217
- Traditional Cash on Cash Return: 1.8%
- Airbnb Cash on Cash Return: 5.7%
- Airbnb Occupancy Rate: 48.2%
6. Kansas (Median Property Price: $237,388)
The Kansas housing market is doing well. Median prices have been rising steadily, but the increases aren’t as large as they are in other parts of the country. However, inventory in Kansas has been low so far in 2019 which is why competition is fierce in the market and home prices are expected to see another increase. So, if you’re looking to invest in real estate here, we suggest you start looking for an investment property for sale now!
- Price Per Square Foot: $113
- Price-to-Rent Ratio: 15
- Traditional Rental Income: $1,309
- Airbnb Rental Income: $2,089
- Traditional Cash on Cash Return: 2.0%
- Airbnb Cash on Cash Return: 4.2%
- Airbnb Occupancy Rate: 53.6%
7. Arkansas (Median Property Price: $243,907)
Next up on our list of the cheapest states to buy a house in 2019 is Arkansas. While it’s often a forgotten Southern state, it has a rich history, natural resources, and a steadily improving economy which makes buying real estate here a solid investment. Another good reason to invest in property here is that property taxes are among the lowest in the country – only 0.63% according to WalletHub! So, if you’re wondering where the best places to invest in real estate on a budget are, Arkansas should be on your list of locations to consider.
- Price Per Square Foot: $122
- Price-to-Rent Ratio: 18
- Traditional Rental Income: $1,153
- Airbnb Rental Income: $1,870
- Traditional Cash on Cash Return: 2.1%
- Airbnb Cash on Cash Return: 4.0%
- Airbnb Occupancy Rate: 42.4%
8. Kentucky (Median Property Price: $245,950)
The Kentucky real estate market has been seeing record-breaking numbers since 2017. And, according to Kentucky Realtors, the state is still running on strong sales activity and increasing home values. Moreover, the association also reported that even in the three largest metro areas in the state (Louisville, Lexington, and Northern Kentucky), median home prices are 30 to 35% lower than the US median. So, good news for those planning on investing here – Kentucky is not only a hot market but is also among the most affordable real estate markets as well!
- Price Per Square Foot: $115
- Price-to-Rent Ratio: 17
- Traditional Rental Income: $1,184
- Airbnb Rental Income: $1,862
- Traditional Cash on Cash Return: 2.0%
- Airbnb Cash on Cash Return: 4.1%
- Airbnb Occupancy Rate: 45.2%f
9. Nebraska (Median Property Price: $246,578)
Nebraska is one of the best states to invest in real estate for many reasons. Besides the fact that you’ll find cheap homes for sale here, the housing market has seen steady growth since the recession and is expected to keep growing at a sustainable pace. Nebraska is also one of the 10 best states to live in 2019 according to US News and World Report! The good economy, growing job market, and low unemployment rate are the main reasons why there’s an influx of people coming into Nebraska, increasing the demand for housing.
- Price Per Square Foot: $335
- Price-to-Rent Ratio: 18
- Traditional Rental Income: $1,167
- Airbnb Rental Income: $1,637
- Traditional Cash on Cash Return: 1.3%
- Airbnb Cash on Cash Return: 2.7%
- Airbnb Occupancy Rate: 49.5%
10. Mississippi (Median Property Price: $247,490)
Not only is Mississippi one of the cheapest states to buy a house in the US, but real estate investors here also enjoy a landlord-friendly environment. The cost of living and property tax rates in Mississippi are also some of the lowest in the country. It’s a quiet state that also thrives in terms of low crime rate and good medical care, making it one of the best places to retire in 2019. Yet, housing inventory throughout the state is low which means you may have limited options for investment properties. So, to find the best opportunities, start your property search now!
- Price Per Square Foot: $113
- Price-to-Rent Ratio: 17
- Traditional Rental Income: $1,241
- Airbnb Rental Income: $2,018
- Traditional Cash on Cash Return: 2.7%
- Airbnb Cash on Cash Return: 4.8%
- Airbnb Occupancy Rate: 46.3%
11. Missouri (Median Property Price: $250,429)
Next up on the cheapest places to buy a house for investment in the United States is Missouri. According to The Missouri Economic Research and Information Center, the state has the 4th lowest cost of living and an unemployment rate of 3.2% which is below the national average. Another reason for real estate investors to buy Missouri homes for sale is that the state is landlord-friendly and gives you the option to rent out your property traditionally or on Airbnb for a great return on investment.
- Price Per Square Foot: $697
- Price-to-Rent Ratio: 17
- Traditional Rental Income: $1,201
- Airbnb Rental Income: $1,828
- Traditional Cash on Cash Return: 1.8%
- Airbnb Cash on Cash Return: 3.4%
- Airbnb Occupancy Rate: 48.7%
12. Louisiana (Median Property Price: $259,741)
According to the Louisiana Economic Outlook, the state’s economy is looking better by the day with more jobs now being added at an impressive pace. In turn, this has a positive effect on the housing market. However, while data indicates that it’s a buyer’s market, real estate investors should be careful and do their research before buying a house in Louisiana as the state is known to experience unpredictable fluctuations. Use our Investment Property Calculator to analyze investment properties in Louisiana and see their projected returns to be safe in the long run.
- Price Per Square Foot: $126
- Price-to-Rent Ratio: 17
- Traditional Rental Income: $1,289
- Airbnb Rental Income: $2,245
- Traditional Cash on Cash Return: 2.9%
- Airbnb Cash on Cash Return: 4.9%
- Airbnb Occupancy Rate: 46.3%
13. Alabama (Median Property Price: $262,777)
When it comes to investing in the cheapest states to buy a house in 2019 for appreciation, Alabama is a good candidate. Alabama home values have gone up 4.2% over the past year and Zillow predicts they will rise another 2.0% this year. The state’s economy is also doing well with unemployment below the national average, at 3.7%. Moreover, the property tax rate in Alabama of 0.42% is the second lowest in the country!
- Price Per Square Foot: $125
- Price-to-Rent Ratio: 15
- Traditional Rental Income: $1,422
- Airbnb Rental Income: $2,641
- Traditional Cash on Cash Return: 3.8%
- Airbnb Cash on Cash Return: 6.1%
- Airbnb Occupancy Rate: 45.0%
14. South Dakota (Median Property Price: $263,003)
South Dakota’s housing market has been on the up and up and will likely continue this trend in 2019. Real estate prices here are among the most affordable in the country. Furthermore, the low cost of living, low home remodeling costs, and good quality of life are attractive variables to home flippers. So, if you’re interested in making money in real estate through flipping houses, South Dakota is not only one of the best states to buy real estate but to start a house flipping business as well.
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- Price Per Square Foot: $126
- Price-to-Rent Ratio: 19
- Traditional Rental Income: $1,152
- Airbnb Rental Income: $2,084
- Traditional Cash on Cash Return: 1.1%
- Airbnb Cash on Cash Return: 3.9%
- Airbnb Occupancy Rate: 40.9%
15. Oklahoma (Median Property Price: $267,535)
Due to its overall low cost of living, Oklahoma is currently one of the cheapest states to buy a house in the US. So, even though it’s a seller’s market, there are still excellent investment opportunities for buyers as well. The rental market is strong and the steadily growing home values translate into future appreciation. It’s also very landlord-friendly and quickly growing both in popularity and development. All of this shows us that Oklahoma is a top location for real estate investors looking for profitable investments over the long-term!
- Price Per Square Foot: $119
- Price-to-Rent Ratio: 19
- Traditional Rental Income: $1,186
- Airbnb Rental Income: $1,951
- Traditional Cash on Cash Return: 1.9%
- Airbnb Cash on Cash Return: 3.6%
- Airbnb Occupancy Rate: 48.6%
16. Alaska (Median Property Price: $268,730)
The current Alaska real estate market is neutral and shows a healthy supply vs demand which could be beneficial to both buyers and sellers alike. However, in the 2019 Housing and Mortgage Market Review, Alaska topped the lists as the second state with a high probability of home prices declining in the coming two years! The report shows that Alaska has a 24% likelihood of home price declines. This is good news for investors looking for the cheapest places to buy a house in the United States- specifically those that plan to implement the buy and hold strategy for immediate cash flow.
- Price Per Square Foot: $154
- Price-to-Rent Ratio: 14
- Traditional Rental Income: $1,607
- Airbnb Rental Income: $1,980
- Traditional Cash on Cash Return: 2.8%
- Airbnb Cash on Cash Return: 3.3%
- Airbnb Occupancy Rate: 48.1%
17. Wisconsin (Median Property Price: $279,020)
Wisconsin has one of the hottest housing markets in the country right now. An extended lack of inventory over the last three years has contributed to fewer homes bought in 2019. This tells real estate investors that the rental market in Wisconsin is doing well. Furthermore, Wisconsin home prices are expected to increase – but only slightly! Meaning, it’s still one of the most affordable real estate markets to buy a home for investment.
- Price Per Square Foot: $203
- Price-to-Rent Ratio: 19
- Traditional Rental Income: $1,225
- Airbnb Rental Income: $1,951
- Traditional Cash on Cash Return: 1.2%
- Airbnb Cash on Cash Return: 3.5%
- Airbnb Occupancy Rate: 44.8%
18. Illinois (Median Property Price: $281,610)
The Midwest real estate market has been experiencing an increase in interest among real estate investors. As more people are relocating to Illinois, investors are turning their eyes to this state as well. Around this time of the year, Illinois sees an increase in homes for sale and, in turn, sellers settle for lower offers. This makes Illinois among the cheapest states to buy a house for investment as buyers have multiple options to choose from and the upper hand in negotiation.
- Price Per Square Foot: $159
- Price-to-Rent Ratio: 14
- Traditional Rental Income: $1,642
- Airbnb Rental Income: $2,475
- Traditional Cash on Cash Return: 1.8%
- Airbnb Cash on Cash Return: 3.2%
- Airbnb Occupancy Rate: 51.4%
19. Michigan (Median Property Price: $282,033)
If you haven’t been following the state’s revitalization, then you probably didn’t expect to see Michigan on this list. But it’s true – many cities in Michigan, even large ones like Detroit, have a low cost of living as well as extremely affordable homes for sale! Michigan’s low median price has been attractive to flippers and, according to MichiganRadio.org, homes are flipping faster in the state relative to the rest of the US.
- Price Per Square Foot: $164
- Price-to-Rent Ratio: 17
- Traditional Rental Income: $1,359
- Airbnb Rental Income: $1,912
- Traditional Cash on Cash Return: 1.8%
- Airbnb Cash on Cash Return: 3.3%
- Airbnb Occupancy Rate: 41.7%
20. Tennessee (Median Property Price: $309,456)
The Tennessee real estate market has been a prime destination for investors for years. While investment properties here aren’t as cheap as other states on this list, the median price is below the national median. Many cities in Tennessee enjoy high appreciation rates and home values are expected to increase in 2019. Both the affordability and profitability of Tennessee investment properties make it an ideal location for any real estate investor, seller or buyer.
- Price Per Square Foot: $712
- Price-to-Rent Ratio: 21
- Traditional Rental Income: $1,234
- Airbnb Rental Income: $2,315
- Traditional Cash on Cash Return: 1.1%
- Airbnb Cash on Cash Return: 4.3%
- Airbnb Occupancy Rate: 51.8%
Do you know which of these cheapest states to buy a house for investment you want to invest in? If so, sign up to Mashvisor and use our tools to find and analyze profitable investment properties in your cities and neighborhoods of choice in a matter of minutes!
