Top 10 Best States to Consider Commercial Investment Property
Updated: Mar 22
Monumental - Today we are going to dive into the best states that we recommend buying your first, or next investment along with a few options we have for you to consider along the way. Whether it be a fix and flip, rental, or office we are going to point out the biggest pros and cons of purchasing in some of the most flourishing states. There are still several good options for secured working capital should you want to go that route.
Real Estate will always be the best investment you can make and the current market is returning great margins for those who own property.
What makes a state the top prospect to grow your portfolio? The top prospective candidates to invest, at the moment, considering the following characteristics:
Median Purchase Price (MPP) - The Median Purchase price of a state is based on the median sales price of homes in the state during the previous or current market, depending one what data is available.
Population Growth Rate (PGR) - The average rate of change of population size. This is based on a yearly basis.
Employment Gains (EG) - Employment growth or decline.
1. Florida - With a population of around 22 million people Florida boasts the eigth-most populated state in America. It is also a top destination for retirement and vacation, but property prices have not gotten out of control, yet. You can still purchase a property here for about $6,000 above the national median-price. The cost of living is 2% cheaper than national average.
Median Purchase Price - $403,800
Property Value Appreciation - 24.1%
Population Growth Rate - 1.9% increase (1st)
Employment Gains - 5.2%
2. Texas - Located in the south-central United States, Texas is the largest of the 48 contiguous states. As of 2022, Texas has joined California as the only two states that hold populations of more than 30 million people. Due to its size, it also falls on multiple climate zones with milder winters along the southern border and colder temperatures in the pan handle. The Lone Star State boasts a housing occupancy rate of 88% and about 20% of the population are renters, according to the Texas Apartment Association. The job rate and population growth rate has shown an upward trend consistently and currently sits at 3.7% and 1.8%, respectively. Texas was 3rd in the nation in population growth behind only Florida and Idaho.
Median Purchase Price - $351,000
Property Value Appreciation - 20.5%
Population Growth Rate - 1.8% increase (3rd)
Employment Gains - 3.7%
3. Arkansas - Known for it's abundant park and wilderness area, Arkansas terrain encompasses mountains, caves, rivers, and hot springs. There is plenty of opportunity for Real Estate investors with low median purchase prices to appreciating home prices at 15.3% yearly. Arkansas has much to offer in terms of jobs; As greater Little Rock, Northeast, and Northwest Arkansas continue to develop, professionals are needed to fill positions in a wide-range of fields, including technology and agriculture.
Median Purchase Price - $254,100
Property Value Appreciation - 15.3%
Population Growth Rate - .6% increase (17th)
Employment Gains - 1.1%
4. Idaho - Located in the Northwestern United States, Idaho is known for its mountainous landscapes, and vast swaths of protected wilderness and outdoor recreational areas. With a strong state economy and growing population, Idaho, is a great place to consider acquiring your next investment property. Top markets in Idaho include Boise, Twin Falls, Eagle, Coeur d`Alene and Idaho Falls.
Median Purchase Price - $398,900
Property Value Appreciation - 38.2%
Population Growth Rate - 1.8 increase (2nd)
Employment Gains - 3.03%
5. Georgia - A Southwestern U.S. State whose terrain spans coastal beaches, farmland, and mountains. Atlanta has been on the top 20 national list of best cities to invest for years and the growth rate is consistently greater than the national average. Top Markets in Georgia include; The West End, Midtown, Castleberry Hill, Old Fourth Ward, Clayton.
Median Purchase Price - $246,000
Property Value Appreciation - 22.4%
Population Growth Rate - .43% decline
Employment Gains - 3.72%
6. Indiana - In the Midwestern United States, Indiana, is the 38th largest state by area and 17th most populous among the 50. Indiana is an economic powerhouse state in the Great Lakes region. Top markets in the state include; Indianapolis, Fort Wayne, Evansville, South Bend, and Bloomington.
Median Purchase Price - $186,000
Property Value Appreciation 17.4%
Population Growth Rate - .29% increase
Employment Gains - 2.4%
7. Illinois - A Midwestern state bordering Indiana, Illinoise, the "Prairie State", has a bustling real estate market. The top markets in the state of illinoise are suggested as follows: Naperville, Chicago, Near West Side, Ottawa, and Forest Lake.
Median Purchase Price - $240,000
Property Value Appreciation - 13.6%
Population Growth Rate - .08% increase
Employment Gains - 3.18%
8. California - A western US state, California stretches all the way from Mexico's northern border and up the Pacific coast about 900 miles. Successful investors recommend Strip Malls, Rental Complexes, and Single Condominiums as those fit to fatten your wallet and your portfolio.
Median Purchase Price - $685,000
Property Value Appreciation - 21%
Population Growth Rate - .3% decline
Employment Gains - 3.85%
9. Iowa - Sitting between Missouri and the Mississippi River and known for it's rolling hills and corn fields Iowa's growing population and real estate market offer a great opportunity for large returns on the proper investments.
Median Purchase Price - $162,000
Property Value Appreciation - 11%
Population Growth Rate - .3% decline
Employment Gains - 2.8%
10. Alabama - A southeastern state bordered by Tennessee (north); Georgia (east); Florida and the Gulf of Mexico (south) and Mississippi (west). Over the last decade Alabama has averaged around 0.24 in growth rate for homes while the national annual home value appreciation rate was 0.13 during that same period.
Median Purchase Price - $165,000
Property Value Appreciation - 4.7%
Population Growth Rate - .5% increase
Employment Gains - 2%
In our opinion, these states lead the Nation in regards to property investment, due to the positive indicators and recent market trends showing a good rate of return for investors while the employment gains continue to grow to pre-Covid levels. Investors in these states are more likely to see higher returns from their portfolio of properties but all investments are individual transactions and you should seek professional advise to be made well aware of any associated risk with your investment. As you may notice these states all have a very different formula for success and there is no right and wrong formula but with the combination of success in the right markets drive profit and most importantly, confidence for your investments.
All buyers are not built the same either, just like the landscapes on this list you may be looking for something specific and considering if the state you have been researching fits the bill of a "good investment". Real estate investment is generally considered a long-term investment but there are short term strategies that also work in successful real estate markets such as fix and flip, wholesale and others that you should speak to someone in the local market about that is knowledgeable on what direction the market may be heading.
While there is no right or wrong formula for your next investment, this list we have composed is exactly what we feel is highly should be considered and serve as a great place to get started when considering your next investment move. Before investing, do your research!
By Monumental Solutions 1/12/2023
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