Hottest states to invest in

Investor · Santa Clarita, CA · Member since 2015 · 40 posts · 34 votes

What are the hottest states to invest in rental property right now? People seem to moving out of California to Texas, Idaho, and Colorado. Are there any other states that are hot right now?

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Jon Schwartz

Realtor · Los Angeles, CA · Member since 2018 · 952 posts · 1k+ votes

Originally posted by @Michael Bell:

What are the hottest states to invest in rental property right now? People seem to moving out of California to Texas, Idaho, and Colorado. Are there any other states that are hot right now?

Californian here to defend my state!

It seems like Californians are flooding out of CA into Texas, etc., because there are SO MANY OF US! For example, anecdotally, Boise, ID is overrun with Californians. Do you know how big Boise is? 229K people! California's population is 39.5M. So a few Californians moving to Boise make it feel (to residents of Boise) like an exodus.

Another fun fact to illustrate my point: in 2018, 118K Californians left the state for other states. But 188K people moved into California from other countries (source: https://calmatters.org/explainers/california-population-migration-census-demographics-immigration/)

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Todd Atkinson
Rental Property Investor · Phoenix, AZ · Member since 2020 · 47 posts · 18 votes
6y
@Kaustubh Johri
Looking at the data, you’re on target
0 Reply
Todd Atkinson
Rental Property Investor · Phoenix, AZ · Member since 2020 · 47 posts · 18 votes
6y
@Jeff Piscioniere
Chattanooga is hot too....TN is booming ...need to look at the corridor and Huntsville too
2 Reply
Todd Atkinson
Rental Property Investor · Phoenix, AZ · Member since 2020 · 47 posts · 18 votes
6y
@John Farady
What areas of PHX are you finding these properties?
0 Reply
Jeff Piscioniere
Investor · Shelton, CT · Member since 2016 · 218 posts · 225 votes
6y
@Todd Atkinson Chattanooga is a great city! Sounds like some of these uppity up Californians would consider then “crappy” properties though. 🙄
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Jeff Piscioniere
Investor · Shelton, CT · Member since 2016 · 218 posts · 225 votes
6y
@Kunal Mishra where I live in CT, people are crazy to bet on appreciation as the cost of living is ridiculous and smart people who can are moving out so property values are stagnant. Therefore you have to shop in less expensive blue collar markets where cashflow is good, ex Torrington.
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Keaton Smith
Rental Property Investor · York, ME · Member since 2017 · 27 posts · 15 votes
6y
@David Bell
There are SO MANY COMMENTS with awesome advice. I don't know if it's been posted yet, but this Fortune article has a great collection of data. Listed the best and worst cities to invest in (given specific parameters).
https://fortune.com/2020/07/17/where-to-invest-real-estate-buy-sell-homes-best-worst-places-us-coronavirus-pandemic-housing-market/
If you don't have a subscription, the top 3 are Austin, TX, Fayetteville, NC, and Fargo, ND. Their criteria is based mostly on recent data that shows where the most promising prospects for new home buyers starting families are, considering the pandemic.
1 Reply
Brett Tvenge
Flipper/Rehabber · Phoenix, AZ · Member since 2018 · 269 posts · 152 votes
6y
@David Bell Phoenix, it’s 116 degrees outside.
1 Reply
Nathan SivaPro Member
Real Estate Agent · Jacksonville, FL · Member since 2015 · 40 posts · 3 votes
6y
Originally posted by @Ryan Kelly:
@David Bell I would take a look at sunbelt states from Texas to Florida. Lower overall taxes, warm weather, and markets with good job prospects.

I second David. I am a realtor in Jackosnville, Florida. Its been super hot here because of the affordability, weather, and job prospects. Since lot of them can work from home now. My clients are feeling why not be close to the beach.
1 Reply
Lynnette E.
Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
6y
Originally posted by @Michael Bell:
@Lynnette E. How’s Chattanooga doing as a rental market? My father was born and raised there.

I have not really looked at the major cities to invest, I stay in the rural areas.
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Sarah Msuya
Rental Property Investor · Portland, ME · Member since 2020 · 23 posts · 9 votes
6y
@Ryan Kelly I completely agree from the research I’ve done so far. I’ve been looking into Huntsville AL and Laurel MS. Do you have any particular markets or states you’re focusing on there?
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Account Closed
Specialist · OverTheRainbow · Member since 2020 · 607 posts · 909 votes
6y
Originally posted by @Todd Atkinson:
@John Farady
What areas of PHX are you finding these properties?

I just finished a flip in 85021 I bought for $186,000 (took over the loan and gave the seller $5,000) and sold for $325,000 before it was listed on the MLS. I bought one in 85033 for $168,000 (took over the loan and gave the seller $3,000) - that one is now worth $240,000 (had to put a roof on it though) cash flows about $800 mo - hanging on to that one as a lease option to a tenant buyer - the one I bought in 85027 I bought for $180,000 total by taking over the underlying loan of $150,000 +-, gave the seller $10,000 and he carried back $20,000 - I sold it for $265,000 on a lease option getting $25,000 option fee cash flows about $650 mo. So, various zip codes.

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Todd Atkinson
Rental Property Investor · Phoenix, AZ · Member since 2020 · 47 posts · 18 votes
6y
Thanks for the information....I was under the impression that it was difficult to assume the sellers loans - many banks prohibit the loan from being assumed...what’s been your experience beyond these deals?
0 Reply
Damon Gainey
Knoxville, TN · Member since 2020 · 13 posts · 0 votes
6y
@Jeff Piscioniere East TN has a lot of great places and growth. Gatlinburg is part of the Smokey Mountains National Park and has more visitors than any other national park in the country. Most of the cabins cash flow nicely! However, they do not have good appreciation from what I have seen.
Knoxville is up incoming and has great potential. Cost of living is low and we have a serious housing shortage. Loat of government jobs from the nuclear plants in Oak Ridge. Lots of properties that are distressed and have opportunity.
Chattanooga is boo,I gas well with new industry and surrounding areas are older homes.
I’m new to investing but will be buying soon. Looked at a couple properties over the weekend that showed promise.
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Ryan KellyBusiness Member
Real Estate Broker · Austin, TX · Member since 2018 · 1k+ posts · 1k+ votes
6y
@Sarah Msuya I personally invest in Austin, TX where I live and work. I also have clients with properties in Huntsville, AL and the west coast of Florida.
[email protected]512-674-5478
Ryan Kelly Group - Keller Williams5112 Reviews
Website View Page
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Ryan Wood
Rental Property Investor · Marysville Wa · Member since 2017 · 28 posts · 6 votes
6y
@Jon Schwartz
Home Run with the data!
1 Reply
Sheryl Sitman
Rental Property Investor · Philadelphia, PA · Member since 2015 · 483 posts · 362 votes
6y
Originally posted by @Kunal Mishra:
There are many other markets good for constant cash flow investments like, Cleveland OH, Rocky Mount NC, Fayetteville NC, Philadelphia PA, South NJ etc..
Appreciation in Philadelphia has been incredible the last years and astounding during COVID

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Jeff Piscioniere
Investor · Shelton, CT · Member since 2016 · 218 posts · 225 votes
6y
@Damon Gainey my cabin in Gatlinburg is valued 50% higher since I bought in 2016! So I think prices have appreciated enormously.
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Damon Gainey
Knoxville, TN · Member since 2020 · 13 posts · 0 votes
6y
@Jeff Piscioniere good to know.
0 Reply
Mario Jaramillo
Investor · Memphis, TN · Member since 2020 · 5 posts · 1 vote
6y
@David Bell
I’m from California and moving/ invest in Memphis TN. Jumping in with both feet! 💪🏽
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Vik J.
Redmond, WA · Member since 2017 · 134 posts · 65 votes
6y
Originally posted by @Kaustubh Johri:
I'd say a lot of CA money is coming into NC, GA, TN. With a dismal 3-4% cap rates, Californians are looking eastwards for a better cap rate.
Although Atlanta has become more expensive lately, I'd bet my money in Raleigh, Charlotte markets. Booming markets, still affordable, educated demographics and has a good potential for an upside.

Not anymore I'm afraid. Raleigh's (RTP) property prices have gone up whilst rents have remained flat. Not sure about Charlotte though..but I've heard the same
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Kaustubh Johri
Investor · Atlanta GA · Member since 2018 · 188 posts · 71 votes
6y
@Todd Atkinson - You are right about Chattanooga and Huntsville too. I like the latter more since geographically it is a smaller place (less supply) and highly educated workforce (ability to pay more rent or buy homes).

@Vik J. I am sure it has gone up over the years, however the affordability/cap rate is relative. You can still get very decent homes for 250K in the area. Way back in 2008, I rented a 3 bedroom aptt (1500 sq ft ) in a gated community in Burlington NC for $750..Very affordable area.

I like to use Neal Bawa's metrics while scouting for a market. Essentially, it comes down to population growth, Property price appreciation, Median income levels and crime rates. He allocates a certain threshold beyond which it is a deal breaker.

Originally posted by @Todd Atkinson:
@Jeff Piscioniere
Chattanooga is hot too....TN is booming ...need to look at the corridor and Huntsville too

1 Reply
Brian Geiger
Rental Property Investor · Phoenix, AZ · Member since 2018 · 141 posts · 165 votes
6y
States that are in the sunbelt (Arizona, Texas being the two leading), Florida, the Carolinas and Georgia (Atlanta to be exact)
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Craig Bellot
Property Manager · CT · Member since 2014 · 687 posts · 329 votes
6y
Hey David!
The first steps I would recommend when investing is to get a handle on analyzing the income, expenses and ROI of these properties in the states you are looking for.
That being said, if you are looking for a hot state, Connecticut is on fire right now due to the mass exodus out of New York. Connecticut in general is in a sellers market. You will need to be creative in negotiating to get the price / terms you need.

You can use the Bigger Pockets calculators to start. Right now rents are strong, you can get $800 for a 1 bed, $1100 for 2 bed, and up to $1300 for a 3 bedroom.

Let me know if you have any questions.
-Craig Bellot
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Corby GoadeBusiness Member
Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
6y
I am here in Boise, ID, which has been the fastest appreciating market in the country. I've continued to invest and work with other investors from out of state to make magic happen. It's been a pretty good ride!
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Billy Smith
Shawnee Mission, KS · Member since 2016 · 719 posts · 313 votes
6y
Kansas City/Midwest has seen a flood of investors from out of state, going for the cheaper inner part of the city.

My son rents a 1907 exterior stone, Oak floors and trim, near Westport from a person from CA.

That area has and is going through gentrification making some good returns.

I play the outer burbs on Ks side making great return in rent and capital appreciation.

It has become so hot on the KS side that finding deals is more luck with lots of sweat.
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