Summary: Narrowing down where to invest next? We can help! Let’s look at how different states have different rules and perks for investors to help you hone in on the best location for your investment.
Location reeeeally does matter.
It matters when you’re deciding:
Where to go on vacation,
Where to park your car,
Where to mount your TV (preferably WITHOUT hitting pipes 😆),
Aaaand…
Where you choose to invest in apartment syndication properties.
Deciding on the location of your investment is an important step for any investor looking to create passive income and grow their wealth.
So, let’s zoom out from the actual property for a moment. Should you just pick a place on a map and away you go?
That would be a biiiiig NO from us.
There are lots of things to consider when it comes to choosing a location. But let’s focus on the specific state of your next investment property today. Did you know that states have alllll different rules and regulations when it comes to owning or investing in real estate properties?
It’s true!
And, while we don’t like to play favorites (okay yes, we totally do), this info is all based on facts and figures. This has nothing to do with what states we like the best but has eeeeverything to do with what’s best for your investment. Choosing the right state can help you narrow down your location into smaller cities and neighborhoods.
So, picking your state isn’t the ONLY thing to do when finding your location, but it is a super helpful starting point. 👌
Let’s walk through some of the key metrics for choosing the best state for you. Then we’ll get into examples of some of the top states, and what makes them favorable for investors.
Here’s what’s in store:
- What are we looking for when choosing the best state?
- Our picks for the best states for passive investors
What are we looking for when choosing the best state?
There are a few reasons why some states make better locations for investment properties than others. Let’s look a bit more in depth at the metrics investors should look at when deciding on a certain state.
It’s important to note that you may not find ALL of these ideal conditions in one state. But you can pick and choose what’s most important to you and your investing goals. It’s all about where you can get the best return on your investment.
Job growth rate
Where there are jobs…people will come. Places that have new businesses opening consistently offer people stability and income with the prospect of new jobs. It’s one of the main reasons why anyone moves anywhere new these days.
States with high job growth rate will attract more people who will need somewhere to live. And where there is high demand for housing, apartment syndication investors can thrive. 🤩
High occupancy rates
If you’re considering investing in an apartment building, it’s a good idea to check on the occupancy rate of apartments across the state. If apartments tend to be vacant across the board, this mayyyy not be the right spot to invest.
High occupancy rates (good old CA comes to mind right away on this one) shows that apartments in the state are consistently bringing in income.
Lower property taxes
States with lower property taxes put more money in the pockets of property owners and investors. It’s simple math…any income a property produces will have deductions for the cost of living. The lower the property taxes are, the less deductions you will have for your share of the return, AKA: more money for you!
And we loooove to hear that. 😏
Increasing property prices
Property prices on the rise mean you’re looking at a profitable real estate market. Some states continue to increase property prices, even in the uncertain times we’ve seen the past few years. That’s a good sign for investors because there’s less risk involved in these areas.
Plus, when it comes time to sell your apartment syndication property, you will benefit a TON from the high property prices.
Population growth
A growing population is one where more people are moving into a state than those moving out. A steady rise in population keeps the housing demand high, which you already know is GREAT for investors. If people are continuously moving out of the state, it becomes difficult to both find renters and sell the property.
Landlord-friendly laws
There are many laws and regulations for both landlords and tenants that vary from state to state. Even if you are not the landlord for a rental property personally, you do want to consider how these regulations affect your investment bottom line.
For example, states with rent control laws can make it tricky to charge market-rate rent. With inflation rates going up, rent control can potentially stifle landlords and investors from increasing rent with a growing market.
Eviction laws are also good to become familiar with. Some states will ONLY protect tenants in evictions. So, investing in a state where landlords also have protection is key. The freedom to evict terrible tenants is important to sustain income from rental properties.
Let’s face it…nooooo one wants to be stuck with renters who won’t pay or cause damage! That’s just plain bad for biz. 😩😩
Our picks for the best states for passive investors
Based on everything we just discussed, let’s look at some state-by-state examples. This will give you a better idea of how all of the above metrics are actually taken into account.
To recap…we’re looking for a landlord-friendly state, with moderate to high property prices, a growing population, incoming jobs, and low property taxes.
No biggie, right? 😅
Not every state has alllll the things we’re looking for, but it’s still good to get an idea for what’s most important for your specific needs.
First up, Texas
Texas has lots of laws favoring landlords and property owners, making it a good spot for investors. It’s easier to have peace of mind in a state that takes lease violations pretty seriously. As long as you have a well-crafted lease in place, Texas usually sides with landlords when leases are broken.
Factor this in with the hugely growing population and job market of Texas. Many California companies have relocated to the Lone Star State, creating tons of new growth and high housing demand.
Sweet home Alabama
We don’t just love it because of our love for Reese Witherspoon and chick flicks…
Buttt we can’t mention Alabama without thinking of them. 😂😂
Alabama offers suuuuper low property tax rates, making it extra appealing for investors. Without rent control, landlords are allowed to raise rent as long as they give a 30-day notice, and can determine their own fees for late rent. The state also favors property owners in the eviction process.
The sunshine state, Florida
People have been flocking to Florida for some time now (especially millennials). We can see why, with lots of job opportunities, warm weather, and nice beaches. Florida has a high occupancy rate, making it a prime investment location.
Plus, the laws around landlords and tenants are relatively vague, meaning there’s plenty of room for creating lease and rental property guidelines.
Georgia, she’s such a peach
Property taxes remain low in Georgia, while the population continues to increase. The housing market in Georgia is expected to keep getting better with lots of immigration and growth. The laws here are also vague for tenants and landlords, giving more freedom for property owners across the state.
Last but not least, today, North Carolina
Low cost of living and income tax makes North Carolina a rapidly growing market. Landlords are supported by the freedom to evict without giving notice, and no obligation for lease renewals.
One final note…
Well, there you have it! This list does notttt mean that you can ONLY invest in these states. ➡️ We just wanted to give you an idea of what we look for in our own investments, and the ones we sponsor. That brings us to our final thought in deciding where to invest…
By connecting with apartment syndication sponsors, you don’t have to know everything about a state’s laws and regulations for owning properties. Why? Because that’s literally our job. We can do the behind-the-scenes of getting you set up, and you can start earning passive income sooner!
Sound good? Simply send us a message!
We can’t wait to help you find the right investments for you. ✨
GET ME ON THE KITTI FREEDOM CLUB
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