Due to the coronavirus pandemic, people are now rethinking where and how to live. According to the recent Zillow’s 2021 Mover Report, 11% of Americans say they have moved in the past year. The top inbound states are Idaho, South Carolina, Arizona, North Carolina, and Tennessee.
In this article, we will explore the reasons why these are some of the best states to invest in real estate.
Related: Real Estate Location-Why It Makes For the Most Profitable Investments
Best States to Invest in Real Estate 2021
Looking for long-term rental properties? Here are some of the best states for real estate investment. The metrics for these best states to own rental property are derived from the latest Mashvisor data.
South Carolina Real Estate Market
Median Property Price: $ 375,540
Price per Square Foot: $ 568
Price to Rent Ratio: 23
Monthly Traditional Rental Income: $ 1,344
Traditional Cash on Cash Return: 2.37
South Carolina offers beautiful trails, sunny beaches, and cities with historic charm. Due to its booming economy, the state has become a popular destination for millennials and retirees alike. In addition, South Carolina has a low cost of living but offers a high quality of life. These are just a few of the reasons why investing in this state is a good idea.
North Carolina Real Estate Market
Median Property Price: $ 397,469
Price per Square Foot: $ 195
Price to Rent Ratio: 24
Monthly Traditional Rental Income: $ 1,394
Traditional Cash on Cash Return: 2.57
With its thriving job market, breathtaking climate, pleasant weather, and great neighborhoods, North Carolina continues to attract growing families, young professionals, and even retirees. The state is also known for its beautiful landscapes and low cost of living. The booming economy is driven by the financial, technology, and education industries and makes the North Carolina housing market an ideal place for real estate investing.
Arizona Real Estate Market
Median Property Price: $ 513,292
Price per Square Foot: $ 367
Price to Rent Ratio: 25
Monthly Traditional Rental Income: $ 1,703
Traditional Cash on Cash Return: 2.48
Favorable weather, specialty education options, reasonable cost of living, and prestigious restaurants are some of the factors attracting people to Arizona. The state is also close to hotspots like San Diego, Vegas, and Puerto Penasco. With the increasing number of people moving to the Arizona housing market, demand for rental property will remain high.
Idaho Real Estate Market
Median Property Price: $ 733,417
Price per Square Foot: $ 341
Price to Rent Ratio: 42
Monthly Traditional Rental Income: $ 1,463
Traditional Cash on Cash Return: 1.36
People are attracted to Idaho because of the beautiful mountains and outdoor activities like hunting, hiking, and skiing. The balanced and pleasant weather also makes it a great place to live. The cost of living and tax levels are lower than the national average. This means that people have disposable income to pay rent or buy investment property in the Idaho housing market.
Tennessee Real Estate Market
Median Property Price: $ 400,729
Price per Square Foot: $ 377
Price to Rent Ratio: 27
Monthly Traditional Rental Income: $ 1,230
Traditional Cash on Cash Return: 2.34
Its low cost of living, vibrant cities, and mild weather are some of the reasons why many people are moving to Tennessee. In addition, residents are not required to pay state income tax on wages or salaries. Hospitals in the state are top-notch and the education institutions are highly regarded. With all these amenities, real estate investors cannot go wrong buying property in the Tennessee housing market.
How to Find Traditional Rental Properties in The Best States to Invest in Real Estate
Knowing the best states to invest in real estate in 2021 is one thing, and knowing the right neighborhoods where to invest in real estate is another.
So, how do you go about identifying the best places to invest in real estate? By using Mashvisor tools. Here are some of the tools that will come in handy in your search for the best places to buy rental property:
Real Estate Heatmap
A very vital factor to consider when looking for the best real estate investments is location. The location of traditional rentals will determine the property prices, return on investment, rental income, occupancy rate, and even the kind of tenants you will get.
So, what is the best way to identify the best places to invest in real estate? One option is to gather and real estate data manually, which can be a very time-consuming and tiring process. A better way of finding the best locations is by using Mashvisor’s real estate heatmap.
The real estate heatmap is a revolutionary tool that provides visual cues that help you identify profitable neighborhoods in the best states to invest in real estate. This software uses red, yellow, orange, and green colors to represent the performance of different neighborhoods. Red shows areas with poor performance, while green shows neighborhoods with high performance.
Mashvisor’s real estate heatmap comes with the following filters which you can use to customize your search:
- Listing price
- Traditional rental income
- Airbnb rental income
- Traditional cash on cash return
- Airbnb cash on cash return
- Airbnb occupancy rate
Related: Real Estate Heat Map: A Revolutionary Tool for Neighborhood Analysis
Mashvisor Property Marketplace
After identifying the best-performing neighborhoods in the best states to invest in real estate, the next step is to find investment properties for sale. While you can find properties through agents or via real estate sites, the best place to get great deals is the Mashvisor Property Marketplace. This is a massive database of off-market properties all over the US housing market. This includes foreclosures, short sales, bank-owned homes, and auctioned homes. You can narrow down your search using the following filters:
- Location (allows you to search up to 5 cities simultaneously)
- Miles (distance from the city)
- Property type (condo, single-family home, multi-family home, townhouse, etc)
- Rental strategy (Airbnb or long-term)
- Listing type
- Number of bedrooms
- Number of bathrooms
- Desired cap rate
- Desired cash on cash return
Investment Property Calculator
Before buying an investment property in any of the landlord-friendly states, you need to analyze its profitability potential. This analysis will show you whether the rental property is capable of generating the return on investment you desire. The best tool for real estate data analysis is Mashvisor’s investment property calculator.
Also referred to as the rental property calculator, this tool uses the most up-to-date trends and data for its analysis. Within minutes, you will have the numbers you require to make an investment decision. The calculator provides an estimate of the following metrics:
- One-time startup costs
- Recurring monthly expenses
- Traditional and Airbnb occupancy rate
- Traditional and Airbnb rental income
- Traditional and Airbnb cash flow
- Traditional and Airbnb cap rate
- Traditional and Airbnb cash on cash return
The estimations are based on real estate data from sources like Zillow, Airbnb, and MLS. They are also based on rental comps of the specific neighborhood.
Related: Mashvisor’s Rental Property Calculator: A Guide for Beginner Real Estate Investors
Being aware of the best states to invest in real estate is a great starting point for anyone that wants to buy property in the US housing market. However, finding the cheapest states to buy a house or the best cities to invest in real estate is not enough. You need the right tools to identify the most profitable neighborhoods and long-term rentals in the US real estate market. You can never go wrong with Mashvisor’s real estate heatmap, Mashvisor’s property marketplace, and the investment property calculator.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.