Investing in property can be a worthwhile venture, but knowing the best locations to invest in will help you maximize the returns.

Smart investors should consider factors such as housing demand, prices, and other prevalent market trends per state. Moreover, numerous variables like state regulations and home occupancy rates can influence the profitability of property investments in any given location.

Below, we take a look at the most profitable states for real estate investment and vital metrics to help you decide where to invest in property for your best interests.

Read more: These are the best cities to buy a rental property investment

Ranking the top states for property investment

While there’s no single set of criteria to identify the states with the highest profitability for property investors, some key statistics can help you measure the viability of investing in a particular area.

For instance, affordable but rising property prices can be a good indicator. Additionally, a growing population and high median income may create a predictable and consistent demand for housing.

To come up with this ranking, we looked at the latest data from Zillow and the US Census Bureau to find the best states for property investment in 2021. We ranked them according to market value appreciation over the last twelve months and current median property prices.

1. Idaho

• Median home price: $414,890
• Property value appreciation: 34.6%
• Median income:  $55,800
• Population growth rate: 14%

Located in the northwestern United States, Idaho is known for its pristine outdoors and protected wilderness landscapes.

It has the highest median property price and value appreciation over the past year on this list, making it a viable prospect for property investors. The increase in real estate value is partly due to low mortgage rates and cost of living which is 2% cheaper than the national average.

With a rapidly growing population and a housing occupancy rate of 87%, you can expect a continuous demand from buyers and renters all year round. The state also exhibits a job growth rate of 2.2%.

2. Florida

• Median home price: $305,266
• Property value appreciation: 18%
• Median income: $55,660
• Population growth rate: 14.2%

With a population of around 22 million, Florida is the eight-most densely populated state in America. It is one of the country’s most popular vacation and retirement destinations, but buying a property there is still relatively affordable.

The typical home price in the Sunshine State is about $6,000 more expensive than the national median, but the cost of living is 2% cheaper.

Regarding geography, the state is a peninsula surrounded by the Gulf of Mexico, the Straits of Florida, and the Atlantic Ocean. Its warm and sunny climate makes it attractive for homebuyers and renters alike with an occupancy rate of 82%.

Read more: Biden to abolish capital-gains tax loophole for real estate investors

3. North Carolina

• Median home price: $254,625
• Property value appreciation: 17.4%
• Median income: $54,600
• Population growth rate: 10%

Located in the Southeastern region of the United States, North Carolina has a cool mountainous region at the west and a warm Atlantic coastal plain at the east.

Compared to the national average, the cost of living in the state is 9% lower. Furthermore, cities like Durham, Charlotte, and Raleigh are thriving with job opportunities for millennials and young professionals.

In particular, Durham County gains five new households and 11 new residents each day, creating a constant demand for property.

Among North Carolina’s population, almost 30% are renters who pay an average of $1,172 for three-bedroom units and $697 for studios.

4. Georgia

• Median home price: $251,514
• Property value appreciation: 17.1%
• Median income: $58,700
• Population growth rate: 9.6%

The state’s median property price is 16% lower than the rest of the country. Moreover, it is the ninth state with the lowest cost of living according to the World Population Review.

Regarding housing occupancy, the Peach State has a total occupancy rate of 88% and a renter-occupied percentage of 36%.

Furthermore, Georgia has a relatively high job growth rate of 2.25% mostly in the sectors of tourism, agriculture, and mining.

In particular, the state capital of Atlanta has more than 500,000 residents and a job growth rate even higher than the national average. As the headquarters of large companies like Coca-Cola and Delta Airlines, the city creates a growing demand for single-family rentals.

5. Texas

• Median home price: $252,422
• Property value appreciation: 16.6%
• Median income: $61,870
• Population growth rate: 15.3%

Located in South Central United States, Texas is the largest state both by population and land area. Due to its size, it falls on multiple climate zones with milder winters near the Gulf Coast and colder temperatures at the Texas Panhandle.

Regarding its property market, the Lone Star State has a housing occupancy rate of more than 88%. About 20% of its population are renters, according to the Texas Apartment Association.

Additionally, demand for housing continues to rise as the state’s population of 29 million grows by 1.4% each year. Texas also has a high job growth rate of 2.17%.

Read more: The 10 best states for buying an affordable new home

6. Tennessee

• Median home price: $236,323
• Property value appreciation: 16.1%
• Median income: $53,320
• Population growth rate: 7.6%

Tennessee is a landlocked state surrounded by nine other states. It has a highly diverse topography with mountainous zones near the Clingmans Dome and flat, low-lying areas toward the Mississippi River.

Cities in this state are often overlooked for their neighbors like St. Louis and Atlanta, but Tennessee provides a solid foundation for profitable real property investments.

For instance, its capital and most populous city Nashville is ranked as the fourth-best real estate market in the country by WalletHub. The growing job market and low unemployment continuously attract inbound migration, keeping the local rental market robust.

7. Ohio

• Median home price: $184,247
• Property value appreciation: 15.2%
• Median income: $56,600
• Population growth rate: 1.3%

Also known as the Buckeye State, Ohio is another Midwest state that’s attractive to property investors. It is the seventh most populous state in the US with a population of 11.8 million.

Its varied topography features rolling hills and cornfields at the south and Lake Erie beaches along its northern border.

Regarding employment, Ohio has approximately 5 million workers that are mostly concentrated in the manufacturing industries, technology, steel production, and medical professions.

8. Missouri

• Median home price: $196,746
• Property value appreciation: 14.7%
• Median income: $55,461
• Population growth rate: 2.5%

Real estate is also a profitable investment in Missouri. The median home cost has been steadily rising over the past three years, but it still remains one of the most affordable housing markets in the Midwest and the entire country.

Among the population, about 28% are renters who pay an average rent of $570 for a studio and $827 for a two-bedroom unit. Moreover, the cost of living in the state is around 14% lower than the US average due to low fuel taxes and utility costs.

Missouri has hilly terrains in the north and a generally flat eastern portion on the Mississippi floodplains. It is landlocked and shares borders with eight other states.

Read more: Real estate investor headed to prison for "simply stunning" mortgage scam

9. Indiana

• Median home price: $188,505
• Property value appreciation: 14.3%
• Median income: $56,300
• Population growth rate: 3.8%

Located in the north-central United States, Indiana features a varied geography and a warm continental climate. Its flat northern areas are bounded by Lake Michigan to the northwest, while the south is full of hills and canyons.

Indiana is also the 38th largest state by area and the 17th most populous in the country with more than 6.8 million people. It is one of the best states to invest in due to its low cost of living.

For instance, it has one of the lowest annual property taxes in the US with an average of $1,214. Indiana’s mean mortgage closing cost of $2,627 is also much lower than the national average.

10. Alabama

• Median home price: $172,932
• Property value appreciation: 13%
• Median income: $50,540
• Population growth rate: 2.6%

Alabama is a Southeastern state bordered by Tennessee, Mississippi, Georgia, Florida, and the Gulf of Mexico. It features a warm humid climate and the longest navigable waterways in the country.

With a population of almost five million and a diverse economy, Alabama is another promising prospect for property investors. With a stable employment base in education, manufacturing, and government jobs, the state has an increasing demand for homes and single-family rentals.

Moreover, it has a high housing occupancy rate of 86% and the cheapest median property value on this list. Property taxes are also generally affordable at $800 and below.