The housing market is currently booming as COVID-19 rates lower across the country and vaccination rates increase. If you’re looking to build up your real estate investment portfolio while prices are lower, now is the best time to research the best states to buy rental property.
However, just because more people are looking to move, travel, and rent new spaces doesn’t mean that there’s not rental competition. Check out our 2021 guide to real estate marketing to help your property stand out.
The United States alone features many climates, catering to all sorts of renters and tourists.
The West Coast has sunny beaches and breathtaking landscapes; the Midwest has great sightseeing spectacles and exciting tourist attractions; the Southwest has terrific food and great nightlife; the Southeast has a calming presence and comfortable weather; and the Northeast has an assortment of shops and cultures.
Prospective buyers should look at the rate properties are expected to grow, the affordability of those properties, employment growth, and property tax rates, among other factors. Then, they can determine whether they should purchase a specific property.
Several factors come into play when deciding to purchase a property. First, you’ll want to consider if the state is landlord-friendly. Second, you’ll also want to consider the markets and the renter potential of each market.
The following four states have excellent potential for purchasing rental properties. They contain growing cities where renters are flocking for lower rents or are tourist hits—perfect for investing in short-term rentals.
Colorado has a multitude of tourism destinations, although most people rent properties in Denver.
Colorado draws visitors through its scenic landscapes, art museums, and its natural accommodation of outdoor activities. The price of homes is on the rise in Colorado, and they’re likely to sell for over listing value. This is something to look out for in a long-term investment.
Comparing 2020 with 2021, the number of active properties on the market has decreased, which signals more demand for existing properties on the market and greater rental prices.
Denver, the capital of Colorado, is experiencing similar housing demand, making it an excellent time to buy. Properties are selling faster than they’re being listed. That being the case, try this Denver area guide explaining the market potential in Denver by showing off top active properties in each significant neighborhood.
Other popular cities to visit are Boulder and Aspen. These two cities are known for their sports scenes. Boulder sits at the bottom of the Rocky Mountains and has a large rock climbing scene.
Aspen is one of the premier skiing cities in the United States. It hosts grand resorts at accommodating prices.
The moniker “Everything is bigger in Texas” is definitely true when speaking of the property market. Texas is the second-largest state by population and area. Many cities are growing within Texas, although the most popular cities to visit are Austin, Houston, and Dallas.
Texas is known to be business-friendly. Many prominent investors and corporations have been relocating facilities and practices to Texas cities over the past five years. Cities such as Frisco and Round Rock are mid-sized cities experiencing growth.
Texas’ lower-income housing market suffered a bit of a shock after the widespread power outages in February. Nevertheless, the upper-income housing market is still strong, and the lower-income market is expected to recover. There are also not many homes listed throughout the state, so the rental market is strong.
If you’re interested in purchasing a rental property in Texas, check out this simple explanation by UMoveFree.
- Austin is known to attract tourists with its fantastic barbeque and its famous music scene.
- Houston attracts many young professionals out of college. It has a great nightlife scene and generally affordable housing, most of which are rental properties.
- Dallas, also known as DFW or the Dallas-Fort Worth area, offers the best selection of properties for families.
Florida is known to attract a wide range of tourists seasonally. Children and families love to visit Orlando and go to Disney World, Universal Studios, and various water parks.
Young adults often party in Miami Beach during Spring Break and rent out large Airbnb properties for fraternities and sororities. Older adults often retire in South Florida and live seasonally, renting out their property for half of the year.
Demand for rental properties in Florida has been steadily increasing over the past fifteen years. The market has grown 2.7% over the past year. People look for beaches when they travel to Florida. Miami, Orlando, Jacksonville, and Tampa are the most popular cities to live in.
There are many nuances to each area of Florida, including susceptibility to extreme weather conditions over a more extended period of time, so it’s important to do extensive research before purchasing a rental property. More information about the Florida housing market can be found on Roofstock.com.
The state of Hawaii is well recognized for having one of the top rental markets in the United States. Warm beaches, rich culture, and a lively nightlife scene draw people to Hawaii from all around the world. Hawaii is one of the most expensive rental markets worldwide due to expensive import costs.
Being a small chain of islands in the Pacific Ocean, Hawaii has a fully established housing market with little space for development. A prospective buyer and possible landlord should know that this means that housing prices are inflated and costly.
Hawaii does incentive tourism and property buying, and it has the lowest state property tax rate.
The housing market has started to bounce back strong after the primary waves of the coronavirus pandemic. The overall housing market has experienced growth; high-income property purchases of over a million dollars have doubled since February 2020.
The cities of Honolulu, Maui, and O’ahu offer the most significant tourism experience. People are drawn to visit Hawaii due to its picturesque beaches, fantastic seafood, watersports, and to see its active volcanoes.
Best States to Buy Rental Property
When it comes to investing in real estate, you’ll want to make sure you’ve done your research on the housing, rental, and tourism markets. Right now, with renters and travelers on the move, investigating which states are best for purchasing rental property can help you decide where to buy properties to quickly turn investments into profitable properties.
While every state has pros and cons for investing in rental properties, Colorado, Texas, Florida, and Hawaii offer unique aspects that appeal to long-term renters and short-term tourists.