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Top 5 Best States to Invest in Real Estate in 2025

April 28, 2025 6 min read

The Best States For Real Estate Investment In 2025

The real estate market continues to evolve, and investors looking for long-term appreciation, high rental yields, and strong market demand need to be strategic about where they put their money.

The best states to invest in real estate offer a combination of job growth, population increases, landlord-friendly laws, and affordable housing markets. So, what are the best states for real estate investment in 2025?

While popular markets like California and New York often get the spotlight, some investors are turning their attention to more affordable, high-growth states where demand for rentals is booming. Based on factors such as property appreciation rates, rental demand, and economic growth, this article covers the top 5 best states to invest in real estate in 2025.

1. North Carolina – Strong Job Growth and Affordability

North Carolina has become a hot spot for real estate investing, thanks to its rapidly growing cities, strong job market, and relatively affordable housing prices. According to BiggerPockets, cities like Charlotte, Raleigh, and Durham are experiencing significant population growth due to a booming tech sector, financial institutions, and universities attracting young professionals.

Charlotte is home to major banking institutions, including Bank of America, and Raleigh is a major hub for technology and healthcare industries. Between 2022 and 2032, North Carolina’s job growth rate is estimated to stand at 0.96%, and it continues to outpace the national average of 0.28%.

The median home price in North Carolina remains below the national average, making it easier for investors to enter the market, and with thousands of new residents moving in each year, rental demand in major cities is strong, keeping vacancy rates low and rent prices competitive. In 2025, Raleigh’s median home price has risen by 14.5% to $435,000. There is a sustained house demand in North Carolina.

North Carolina’s economic strength and affordability make it one of the best states to invest in real estate, offering a mix of appreciation potential and steady rental income from an investment property.

2. Ohio – High Cash Flow and Affordable Entry Costs

Ohio has long been a favorite state among real estate investors due to its low cost of entry and high rental yields. Cities like Columbus, Cincinnati, and Cleveland have thriving job markets, making them attractive to renters. In 2025, Ohio’s median home price grew by 6%. In Cincinnati, median home prices increased by 6.3% to $255,000, and Cleveland’s homes sell within a quick timeframe of 33 days on the market.

With its diversity in industries ranging from healthcare to manufacturing, Ohio’s economy is notably stable, ensuring a continued and constant demand for housing within its major cities.

If you’re looking for high cash flow and affordable entry into owning rental property, Ohio is one of the best states to invest in real estate in 2025.

3. Arizona – Thriving Housing Market with High Appreciation

Arizona has seen massive growth in real estate demand, driven by an influx of new residents, a growing job market, and strong appreciation rates. Phoenix, in particular, has been one of the fastest-growing metro areas in the U.S., making Arizona an excellent choice for real estate investors.

Arizona continues to attract retirees, remote workers, and professionals seeking a lower cost of living compared to California. In 2025, the home prices in Arizona have been estimated to be increasing by 3.5% year-over-year.

Property appreciation in cities like Phoenix and Tucson has consistently outpaced the national average, making it a great state for long-term investments with rising property values. Phoenix as had a 2.7% median house sale price increase from 2024, up to $452,000. These homes typically sell after being on the market for less than two months.

Arizona is also an ideal location for Airbnb and vacation rentals, particularly in cities like Scottsdale, which attract tourists year-round. In Scottsdale, the median house sale price is at $867,000.

Arizona’s fast-growing market and high appreciation rates make it one of the best states to invest in real estate for long-term equity gains and short-term rental potential.

4. Georgia – Strong Rental Demand

Georgia, particularly Atlanta, has become a major hub for real estate investment due to its strong job market, high rental demand, and relatively low cost of living. The state’s business-friendly environment and growing tech sector are attracting new residents, creating significant demand for rental properties. Home prices in Georgia have increased by 1.9% year-over-year.

In Georgia, there’s a booming job market. Companies like Coca-Cola, Delta Airlines, and Home Depot have headquarters in Georgia, contributing to strong employment growth.

The median home price in Georgia remains lower than in many other major metro areas, standing at $385,250, making it easier for investors to acquire rental properties. This shows a 9.35% decrease from 2024.

With a large population of young professionals and students, rental demand remains high in cities like Atlanta, Savannah, and Augusta.

5. Pennsylvania – Stability and High Returns

Pennsylvania offers a mix of affordability, strong rental demand, and economic stability. Cities like Philadelphia and Pittsburgh provide great investment opportunities with relatively low home prices and strong rental markets.

Home prices in Pennsylvania are lower than in many neighboring states, making it an attractive option for investors. Additionally, Pennsylvania has some of the highest rental yield markets in the Northeast.

The average home value in Pittsburgh is $225,618, up 2.6% over the past year, with homes typically selling in around 37 days. Pittsburgh residents typically spend only 25.3% of their median household income on housing, making it a more affordable metropolitan area.

With a mix of healthcare, education, and technology industries, Pennsylvania’s economy also remains stable, supporting strong housing demand.

If you’re looking for stability and high cash flow, Pennsylvania is a best state for real estate investment in 2025.

How to Choose the Best State for Real Estate Investment

While these five states offer excellent investment opportunities, selecting the best state to invest in real estate depends on your investment goals. Consider the following factors before deciding:

1. Market Growth and Appreciation: Invest in states with strong population growth and rising home values to maximize long-term appreciation.
2. Rental Demand: High rental demand ensures steady cash flow and low vacancy rates, which is crucial for maintaining profitability.
3. Affordability: Look for states where property prices are reasonable and consider loan options available for real estate investors.
4. Landlord-Friendly Laws: Some states have more favorable landlord-tenant laws, making it easier to manage rental properties and enforce lease agreements.

Best States to Invest in Real Estate in 2025

The best states for real estate investment in 2025 will be those offering affordability, strong rental demand, and long-term appreciation potential. North Carolina, Ohio, Arizona, Georgia, and Pennsylvania all provide unique advantages for real estate investors, whether you’re looking for high cash flow, rapid appreciation, or steady rental income. By carefully selecting the best state to invest in real estate, you can maximize your returns and build a successful rental property portfolio in 2025 and beyond.