The five states that hold up best for buy and hold rental investing right now are Texas, North Carolina, South Carolina, Georgia, and Tennessee. All five combine population growth above the national rate, median home values that individual investors can still reach, and legal frameworks that let a landlord recover possession without a year of court. None of them is a secret, and that is fine: the point of a ranking is to show the criteria, not to find an undiscovered market.
The figures below come from Census Bureau population estimates and American Community Survey data for 2020 to 2024, plus each state’s revenue department. Rates change annually. Treat this as a method you can rerun rather than a fixed answer.
The criteria, spelled out
A state ranking is only useful if you can see what it weights. Here is what this one uses, in order of importance:
- Population growth. Rent is a function of demand, and demand is a function of people arriving. Anything below the national growth rate of 0.5 percent in the year to July 2025 is a headwind you have to overcome with something else.
- Rent to price ratio. Gross annual rent divided by purchase price. Computed here from statewide medians, which is crude but comparable across states. Anything under about 5 percent leans on appreciation rather than cash flow.
- Landlord law. How long an eviction takes, whether rent control exists, and how tightly deposits are regulated. This is where a bad month becomes a bad year.
- Property tax. The largest fixed cost after debt service, and the one most likely to reset upward after a purchase.
- Insurance. The fastest moving line item in the Southeast and Gulf regions, and the one most likely to break a model built three years ago.
Notice what is not on the list: appreciation forecasts, “hot market” rankings, and anything that requires predicting interest rates. Those are guesses. The five criteria above are measurable today.
The five states compared
| State | Growth to July 2025 | Median home value | Median gross rent | Gross yield | State income tax |
|---|---|---|---|---|---|
| Texas | +391,243 (1.2 percent) | $283,800 | $1,403 | About 5.9 percent | None |
| North Carolina | +145,907 (1.3 percent) | $288,900 | $1,228 | About 5.1 percent | 3.99 percent for 2026 |
| South Carolina | +79,958 (1.5 percent) | $259,000 | $1,180 | About 5.5 percent | Top rate 6 percent for 2025 |
| Georgia | +98,540 (about 0.9 percent) | $303,300 | $1,393 | About 5.5 percent | Flat 5.19 percent for 2026 |
| Tennessee | +63,785 (about 0.9 percent) | $286,700 | $1,189 | About 5.0 percent | No tax on wage income |
Yields here are gross: annual median rent divided by median home value, with no allowance for tax, insurance, vacancy, or management. Real net yields land several points lower. The number is useful for ranking states against each other, not for underwriting a deal.
1. Texas
Texas added 391,243 people in the year to July 2025, more than any other state, reaching 31.7 million. It also posts the best gross yield of the five at roughly 5.9 percent, because home prices have stayed moderate relative to rents across most of the state. Four large metros, Dallas and Fort Worth, Houston, San Antonio, and Austin, give you genuine market choice, and eviction proceedings move quickly through justice courts.
The offset is property tax. Texas has no state income tax and funds local government heavily through property tax, which produces effective rates near the top of the national range. The general residence homestead exemption for school district taxes is $140,000 under Tax Code Section 11.13(b), per the Texas Comptroller, but that applies to a principal residence only. Your rental gets none of it. Model the full unexempted bill and reassess after purchase, because Texas appraisal districts do.
2. North Carolina
North Carolina grew 1.3 percent in the year to July 2025, adding 145,907 people to reach 11.2 million. The Research Triangle and Charlotte drive most of it, and both have diversified employment bases rather than one dominant employer. The state income tax is flat and falling: 4.25 percent for tax year 2025 and 3.99 percent for 2026 and after, per the North Carolina Department of Revenue.
The weakness is yield. At about 5.1 percent gross, North Carolina is the thinnest of the five, because prices have moved faster than rents in the growth corridors. It is an appreciation leaning market. That is fine if you have the reserves to carry a property through a soft patch and not fine if you need it to cash flow from month one.
3. South Carolina
South Carolina posted the fastest percentage growth of any state in the year to July 2025 at 1.5 percent, adding 79,958 residents to reach 5.57 million. What makes that number credible is its composition: net domestic migration accounted for 66,622 of it, meaning Americans are actively choosing to move there rather than the growth coming from births alone.
Entry prices are the lowest of the five at a $259,000 median, and gross yield lands around 5.5 percent. Charleston, Greenville, and the Myrtle Beach corridor each behave differently. Coastal insurance is the constraint, and premiums there have risen substantially. Inland Greenville and Columbia avoid most of that exposure.
4. Georgia
Georgia reached 11.3 million by July 2025, adding 98,540 residents. Gross yield sits around 5.5 percent, property is assessed at 40 percent of fair market value with millage set locally, and the state income tax is a flat 5.19 percent for 2026. The eviction process runs through magistrate court with a seven day window for the tenant to answer.
The caution is submarket specific rather than statewide. Several metro Atlanta submarkets have absorbed heavy multifamily delivery, which has pressured effective rents and increased concessions. Savannah and Augusta behave differently. We cover the county level detail in our full look at investing in Georgia real estate.
5. Tennessee
Tennessee added 63,785 people to reach 7.3 million. It has no state tax on wage income, which matters for a resident investor’s net return on rental profit. Nashville, Knoxville, and Chattanooga each have distinct economies, and Memphis remains one of the higher gross yield metros in the country for buyers who understand its submarkets.
Gross yield statewide is the lowest of the five at about 5.0 percent, largely because Nashville pricing drags the median up. That makes Tennessee a market where the state number understates what a careful buyer can do outside the Nashville core.
What did not make the list, and why
Florida has strong growth, adding 196,680 people in the year to July 2025, and no income tax. It is off this list on insurance alone. Premium volatility in coastal Florida has been severe enough that models built even a few years ago no longer hold, and that risk is difficult for an individual investor to price.
Ohio and Indiana deliver better gross yields than any state above, with median home values well under $250,000. They are excluded because population growth is flat to slightly negative in much of each state, which means you are buying cash flow without demand growth behind it. That is a legitimate strategy, just a different one.
California, New York, and New Jersey are excluded on the combination of entry price, yield, and tenant protections that extend eviction timelines considerably. Our comparison of Texas and California walks through that contrast in more detail, and Virginia against Florida covers another pairing.
How to apply the criteria yourself
Pull the county population estimate from the Census Bureau rather than the state total. A state can grow while a county shrinks, and you are buying in a county. Then pull the actual assessed value and millage from the county assessor for three comparable properties, not the state average. Then get real insurance quotes. Then read the state’s landlord and tenant statute or handbook and write down the deposit return deadline and the eviction timeline.
Those four steps take an afternoon and they eliminate most bad purchases. Our earlier guide to picking an investment state covers the underwriting spreadsheet in more depth.
This article is general information about public data, not legal, tax, or investment advice. Entity structure, depreciation, passive activity rules, and the tax treatment of a sale all depend on your circumstances. Talk to a licensed CPA, attorney, or investment adviser before buying property in any state.
Frequently asked questions
Which state has the best rent to price ratio?
Of these five, Texas at roughly 5.9 percent gross yield on statewide medians. Outside this list, Ohio, Indiana, and parts of the industrial Midwest deliver higher gross yields, but with flat or declining population, so you gain cash flow and give up demand growth.
Is no state income tax a real advantage for a landlord?
It helps but it is rarely decisive. Texas and Tennessee charge no tax on wage income, but Texas funds local government through some of the highest property tax rates in the country. Property tax hits every year regardless of profitability. Income tax only applies to profit.
How do I compare eviction timelines between states?
Read each state’s official landlord and tenant handbook or statute and note three things: how many days a tenant has to answer a filing, how long after a judgment a writ of possession issues, and how long the tenant has after that. Court backlogs then add real time on top of the statutory clock.
Should I invest out of state?
Only with a property manager you have vetted in person and a reserve fund sized for at least six months of full carrying cost. The states above are common targets for out of state buyers precisely because the numbers work on paper. Execution risk is what actually determines returns.
Do these rankings change year to year?
The criteria do not, but the inputs do. Population estimates are released annually, income tax rates in North Carolina, South Carolina, and Georgia are all on scheduled reduction paths, and insurance repricing has been the biggest mover. Rerun the numbers before you buy rather than trusting last year’s ranking.
The bottom line
Texas, North Carolina, South Carolina, Georgia, and Tennessee all pass the same test: more people arriving than the national average, prices an individual can reach, and courts that resolve possession in weeks rather than seasons. Texas leads on scale and yield, South Carolina on growth rate, Georgia and Tennessee on balance, and North Carolina on the strength of its employment base.
The ranking matters far less than the method. Population growth, rent to price, landlord law, property tax, and insurance are the five inputs that decide whether a rental works. Apply them at the county level, get real quotes rather than rules of thumb, and the state you start from becomes a much smaller part of the outcome.
