Best places to invest in rental properties 2025

⚠️ Disclaimer: The information provided in this article is for educational and informational purposes only and should not be considered financial, legal, or investment advice. Real estate investing involves risks, including the potential loss of capital, and individual results may vary. Market trends, rental demand, and landlord laws can change over time, and past performance is not indicative of future results. Before making any investment decisions, you should consult with a licensed real estate professional, attorney, or financial advisor. All strategies, locations, and recommendations discussed are based on personal opinion and experience and may not be suitable for every investor.

There are states in 2025 that I wouldn’t touch with a 10-foot pole. I don’t care how good the deals look on paper. They’re traps for landlords. But at the same time, there are places in this country that are some of the best to invest in rental properties right now, and they are quietly becoming gold mines for rental property investors. I’m talking cash flow, appreciation, and stability all rolled into one. So today, I’m going to tell you exactly the best places I’ll invest in rental properties in 2025. And just as importantly, where I’m avoiding buying. Knowing where to avoid is where the real money is saved.

Why Location Matters Now More Than Ever

Here’s the thing. Market timing is tough. Nobody, and I mean nobody, has a crystal ball. But we have clear data, have migration trends, have job growth numbers. We have hard facts about landlord laws that are changing in some states and becoming much more favorable in others. And right now, there’s a massive divide across the country between landlord-friendly states and landlord-unfriendly states. And it’s getting wider by the day. If you want to build steady cash flow and avoid nightmare tenants, and if you want to sleep at night knowing that your property is working for you, you need to be strategic about where you buy. And location has never mattered more.

The Hidden Risk Investors Overlook

Now, here’s the risk I see a lot of investors taking. You get a property with a great number on paper. It has solid rent, a reasonable purchase price, and it even looks like a slam-dunk cash flow, but it’s in a state where the laws are getting tougher and tougher against landlords. You get a bad tenant, suddenly you’re stuck in court for a month. Your cash flow turns into cash bleeding. And if enough investors get squeezed like that, property values in the area start to fall because everyone’s trying to offload their headache properties at the same time.

Let’s talk about the best places to actually invest in rental properties in 2025 because once you understand this framework, you’ll be able to find winning markets in the country no matter what’s happening in the economy.

The Three Questions I Ask Before Investing

Everytime, when i look up at the market, three questions rise in front of me.

1. Is my choosing a state landlord-friendly?

As i know well if things go one way, one day they will and i want the law on my side.

2. Are people moving here?

Migration tells you everything about future demand. If people are moving out of an area in large numbers, you’re really going to struggle to find tenants. But if people are moving consistently, you’ll have no problem finding tenants to fill your properties for years to come.

3. Job growth

Jobs bring in tenants. It’s that simple. No jobs, no rent checks. If the market checks all three boxes, we’re in business. Now that you have the framework, let’s get into the details.

States You Should Invest In for 2025

Okay, now let’s take a look at the best places I’m considering to invest in rental properties in 2025. These are the states I’m actively looking at and in some cases already investing in because they check off almost all the boxes.

Texas

Texas’ population growth is off the charts. People are moving to Texas in droves for jobs. They also get lower taxes and a better quality of life. Texas laws are extremely landlord-friendly and that’s exactly what you want. There’s also no state income tax which is a huge bonus. And the economy is diverse. You have tech, oil, healthcare, you name it. All the industries are there. And even though prices in Texas have gone up a lot, there are still opportunities in the secondary markets if you know where to look. The biggest issue there though is property taxes. So be careful. Property tax rates are high and they reassess their property values every year. Meaning if property values are going up, so is your property tax bill. But if you can get a great deal with cash flow, it’s otherwise a great area to invest.

Florida

Then there’s Florida. Florida has seen massive inbound migration, making it one of the top markets for investing in Florida rental properties. People from all over the country, especially states like New York, are relocating here. Every age group—from young professionals to retirees and remote workers—is coming to Florida. In Florida, you enjoy the sunshine and tax benefits, including no state income tax. Rental demand is strong, especially in the suburbs and coastal cities. Insurance costs can be high, but if you run your numbers carefully and get a good deal, cash flow can still work

Tennessee

Let’s move on to Tennessee. And that’s my favorite. No state income tax, great landlord laws, and really amazing growth in cities like Nashville, Chattanooga, and even Memphis, where I live and invest. Property prices are still pretty reasonable in a lot of areas, especially in middle Tennessee and west Tennessee. The cost of living in the best weather is also what draws residents to the state of Tennessee every year. It’s been an interesting market for me personally. And property taxes only go up every four years, unlike Texas, which goes up every 1 year.

North Carolina

Next up, North Carolina. Cities like Charlotte and Raleigh are really booming. You’ve got job growth, population growth, and relatively affordable property prices. The only problem is that these areas are in such high demand. Property prices have gone up a lot. So if you’re looking for cash flow, you’re going to need to put down a good amount of money. If you’re looking for something ready to rent, like you would in Florida or Texas, but if you find a property that needs some work or you can build some extra value or even put down a little more money, you could be in one of these great appreciation markets. The economy in North Carolina is very strong and more importantly, the landlord laws are favorable.

Indiana

Finally, we have Indiana. Now, Indiana may not look flashy, but it’s a solid play for cash flow, and the entry points are affordable, just like Tennessee, especially in cities like Indianapolis. The population is stable, and you can find cash flow right out of the gate on homes in Indianapolis. It’s not the most attractive market, but cash flow comes out on the flashy side every time. If you want to cash flow on a rental-ready property with no more than 25% down, you will want to look in cities like Memphis and Indianapolis as these are the easiest places to find success.

Do Your Homework

Now let me be clear. Just because these states are good for investment, doesn’t mean that everywhere and every major metro market and every submarket are good areas for investment. You still need to do your homework, choose quality neighborhoods, and focus on adding value and keeping them long-term.

Don’t just buy any house or put too much down. Think about it. Any house will be cash flow if you put 100% down. But smart investors don’t do that. The goal is to have cash flow with the least amount of money out of pocket possible, yet still be in an appreciable neighborhood that attracts A+ renters.

What Smart Investors Want

You want properties to cash flow today and give you appreciation for tomorrow and want predictable returns. You don’t want to gamble on your down payment—you want smart, steady, safe growth.

I would love to know where you’re investing in today’s economy. So, put that down in the comments below.