5 Best States To Invest In Real Estate In 2024
Table of Contents
Understanding Real Estate Investment
Real estate investment involves acquiring property with the intention of selling or renting it for profit. This could entail flipping a house by purchasing it at a lower price, renovating, and reselling at a higher value. Alternatively, investors may retain ownership until market conditions favor a profitable sale. Renting out residential or commercial properties is another avenue, generating steady rental income. Additionally, investors can participate in real estate investment trusts (REITs), publicly-traded companies managing real estate properties.
What Defines a State’s Appeal for Real Estate Investment in 2024?
For the scope of this article, we’ve identified five key metrics to determine the top five states for real estate investment:
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Affordable Home Prices:
Affordable prices facilitate market entry for investors, creating opportunities to acquire properties at lower costs and potentially sell them at higher values in the future. -
Population Growth:
A growing population drives housing demand, benefiting those interested in renting or selling properties for profit. -
Job Growth:
States with expanding employment opportunities attract more residents, fostering population growth and increased demand for housing. -
Low Property Tax Rates:
Reduced property tax rates decrease the overall cost of owning real estate, enhancing the potential return on investment for investors. -
Low Rental Vacancy Rates:
Low vacancy rates contribute to a stable rental market, amplifying the demand for rental properties.
Forbes recently compiled a list of the top states witnessing significant population influx. Interestingly, six out of the seven states on our list align with Forbes’ findings.
5 Best Cities To Invest in Real Estate Within the Top States in 2024
Zooming in on specific cities is crucial for targeted investment. Explore the standout cities within the top states, each offering unique opportunities and potential for growth. From metropolitan hubs to emerging urban centers, find the perfect fit for your real estate investment goals.
State #1: South Carolina
| Typical home value 2023 | $293k |
| Population growth July 2022-23 | 1.7% |
| Job growth February 2022-23 | 2.54% |
| Average property tax rate 2023 | 0.56% |
| Vacancy rate 2023 | 4.2% |
| Score | 144 points |
| Sources: Seidman Research Institute , WalletHub , U.S. Bureau of Labor Statistics , U.S. Census Bureau , and Zillow Home Values Index | |
Let’s kick off our list with the charming state of South Carolina, known for its mild climate and stunning 187 miles of coastline along the Atlantic Ocean. We believe it’s a promising spot for real estate investment in 2024.
In the previous year, the average home value in South Carolina was a reasonable $293,445, making it quite affordable when compared to other states. Keep in mind that specific cities and towns within the state may offer even more budget-friendly options.
What adds to South Carolina’s appeal is its favorable property tax rate, standing at an average of 0.56% in 2024. This means lower taxes for property owners, translating to better returns on investment. It’s a significant factor that makes the state even more enticing for potential real estate investors.
On the population front, South Carolina experienced a growth of 1.7% from July 2022 to July 2023. This uptick suggests a notable demand for housing, creating a favorable environment for those looking to invest in real estate. Additionally, the state’s rental vacancy rate was a mere 4.2% in the third quarter of 2023, indicating a healthy demand for rental properties.
One more feather in South Carolina’s cap is its robust job growth, boasting a 2.54% increase from February 2023 to February 2024. This uptrend signals a strong and growing economy, providing a solid foundation to support and enhance property investments.
So, if you’re considering real estate investment in 2024, South Carolina stands out as a promising option. With its affordable home prices, low property taxes, growing population, and flourishing job market, the Palmetto State offers a combination that savvy investors might find hard to resist.
State #2: Delaware
| Typical home value 2023 | $355k |
| Population growth July 2022-23 | 1.4% |
| Job growth February 2022-23 | 2.43% |
| Average property tax rate 2023 | 0.58% |
| Vacancy rate 2023 | 3.7% |
| Score | 129 points |
| Sources: Seidman Research Institute , WalletHub , U.S. Bureau of Labor Statistics , U.S. Census Bureau , and Zillow Home Values Index | |
Moving down our list, we find ourselves in the welcoming state of Delaware on the East Coast. While it might not boast the glitz and glamour of its neighbors like New Jersey and New York, Delaware has its own charm and plenty to offer savvy real estate investors.
One standout feature making Delaware an attractive state for real estate investment is its consistent population growth. From July 2022 to July 2023, Delaware’s resident population saw a steady increase of 1.4%. This growth sets a positive tone for the state’s real estate landscape.
Moreover, Delaware’s job market has been on a healthy upward trajectory. With a 2.43% increase in job growth from February 2022 to February 2023, the state showcases a promising indicator of economic strength, making it an appealing prospect for real estate investors.
Delaware also scores well in terms of property taxes. In 2023, the average property tax rate stood at a modest 0.58%, notably lower than the national average of 1.1%. This lower tax burden can be a boon for investors, allowing them to manage expenses effectively and potentially enhance their return on investment.
Another compelling reason to consider Delaware for real estate investment is its low rental vacancy rate. In the third quarter of 2023, the state’s rental vacancy rate was a mere 3.7%, indicating a robust demand for rental properties. For investors, this suggests a healthy market with ample opportunities for rental income.
Finally, let’s talk about home values. In 2023, the typical home value in Delaware was $355,181. While this figure is higher than some other states like Kentucky, it still represents a reasonable price point for real estate investors. When you factor in the economic growth, low property tax rate, and the overall real estate climate, Delaware emerges as a compelling choice for those looking to make wise investments in 2024.
State #3: Idaho
| Typical home value 2023 | $476k |
| Population growth July 2022-23 | 1.8% |
| Job growth February 2022-23 | 3.01% |
| Average property tax rate 2023 | 0.63% |
| Vacancy rate 2023 | 4.3% |
| Score | 128 points |
| Sources: Seidman Research Institute , WalletHub , U.S. Bureau of Labor Statistics , U.S. Census Bureau , and Zillow Home Values Index | |
Heading west to the Gem State, Idaho proves to be an excellent choice for those considering real estate investment. Idaho earned its nickname for a reason, and its population growth of 1.8% from 2022 to 2023, the second-highest in the nation, makes it a standout on our list.
Why is Idaho experiencing such growth? One key factor is its relatively low cost of living compared to other states. This affordability makes Idaho an attractive option for those looking for a place to call home without breaking the bank. Another contributor to Idaho’s rising population is the increasing trend of remote work, with more individuals choosing the tranquility of rural areas like Idaho over bustling urban centers.
Job growth in Idaho is also noteworthy, with a 3.01% increase from 2022 to 2023. Major metropolitan areas like Boise, the capital city, and Coeur d’Alene, a popular tourist destination, play pivotal roles in driving this economic expansion.
While the typical home value in Idaho sits at $476,198, surpassing the national average of $354,639, it remains an affordable state for investors. The higher home value is balanced by Idaho’s financial advantages, including an average property tax rate of 0.63%, which is lower than many other states, providing additional appeal for investors.
Adding to the investment allure is Idaho’s low rental vacancy rate, standing at 4.3% in the third quarter of 2022. This indicates a high demand for rental properties, suggesting that the state offers a thriving market for those interested in rental income.
In conclusion, Idaho, with its population growth, job opportunities, reasonable home values, low property tax rates, and high demand for rental properties, emerges as a gem for real estate investors seeking a blend of growth and affordability in 2024.
State #4: Kentucky
| Typical home value 2023 | $198k |
| Population growth July 2022-23 | 0.1% |
| Job growth February 2022-23 | 2.51% |
| Average property tax rate 2023 | 0.85% |
| Vacancy rate 2023 | 5.1% |
| Score | 128 points |
| Sources: Seidman Research Institute , WalletHub , U.S. Bureau of Labor Statistics , U.S. Census Bureau , and Zillow Home Values Index | |
Let’s shift our focus to Kentucky, a state that stands out not only for its job growth of 2.51% from 2022 to 2023 but also for its remarkable home affordability and enticingly low property tax rates.
What caught our attention is Kentucky’s outstanding affordability in real estate. With a typical home value of $197,644, it claims the title of having the lowest home values on our list. This makes Kentucky an exceptionally budget-friendly option for investors looking to dive into the property market.
Adding to its appeal, Kentucky boasts an average property tax rate of 0.85%, which is lower than the rates in many other states. This not only provides financial relief but also serves as a noteworthy tax advantage for savvy investors considering the Bluegrass State.
Looking at the rental market, Kentucky’s rental vacancy rate was at 5.1% in the third quarter of 2023. This statistic suggests a high demand for rental properties, creating a promising landscape for investors seeking opportunities in the rental market.
In summary, Kentucky may not lead the charts in job growth, but its extreme home affordability, low property tax rates, and the high demand for rental properties make it a compelling choice for investors aiming for a solid and affordable entry into the real estate market in 2024.
State #5: Nevada
| Typical home value 2023 | $485k |
| Population growth July 2022-23 | 1.0% |
| Job growth February 2022-23 | 5.19% |
| Average property tax rate 2023 | 0.55% |
| Vacancy rate 2023 | 5.9% |
| Score | 125 points |
| Sources: Seidman Research Institute , WalletHub , U.S. Bureau of Labor Statistics , U.S. Census Bureau , and Zillow Home Values Index | |
Let’s turn our attention to Nevada, a state that earned its spot on our list thanks to remarkable job growth and an exceptionally low property tax rate.
Nevada takes the lead with an impressive 5.19% surge in job growth from 2023 to 2024, making it the frontrunner in job creation nationwide. The vibrant cities of Las Vegas and Reno play a significant role in driving this growth, with their bustling tourism and entertainment industries leading the charge.
Despite the typical home value in Nevada reaching $484,530 in 2023, which is higher than the national average of $354,639, it remains affordable when compared to other states experiencing similar job growth rates. The dynamic job market helps balance the housing costs, making Nevada an appealing option for potential real estate investors.
Nevada’s average property tax rate of 0.55% stands as the fourth-lowest in the country, offering attractive tax benefits to investors. Furthermore, with a rental vacancy rate of 5.9% in the third quarter of 2023, it signals a high demand for rental properties. A noteworthy point is that 43% of households in Nevada are occupied by renters, making it relatively easy for investors to find tenants for their investment properties.
Beyond the impressive statistics, Nevada boasts stunning desert landscapes and numerous outdoor recreational areas, including the iconic Lake Tahoe and Red Rock Canyon. Additionally, the overall cost of living in Nevada is only 4.9% higher than the national average, adding to the state’s appeal for those seeking not only investment opportunities but also a lifestyle enriched by natural beauty and recreational activities.
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