The Absolute Cheapest State To Buy A House Is…

Investing in real estate can be a great way to boost your portfolio. Buy and hold real estate not only increases your portfolio with its appreciation and increase in equity, but you also receive monthly cash flow.

But real estate can be expensive, so where is the absolute cheapest state to buy a house? Check out our guide below.

The Cheapest State To Buy A House

If you have only a little money to invest in real estate, yet you want to jump on the bandwagon because you know it’s a great investment, look no further than West Virginia. It’s probably not a state you would have thought of right away, but it’s a charming state with plenty of homes to invest in and a median home price of $113,500.

With cheaper homes comes cheaper rent, but your lower operating costs will make the profits worth it in the end. West Virginia is a great place for new investors to start their portfolio, even if you live halfway across the country.

Using a platform like Roofstock Marketplace, you can browse homes anywhere in the US, view them in 3D photos, and videos, see all the analytics, and make an informed investment decision. 

If you buy a home in West Virginia, yet you don’t live there, Roofstock helps you find the right property management company, allowing you to have a truly passive investment in your portfolio.

Other Affordable States To Buy A House

If you can’t find homes you want to buy in West Virginia, there are plenty of other ‘cheap’ states to buy a house and earn passive income. 

Mississippi

Homes in Mississippi sell for a median price of $138,000. Mississippi is for the farm-lover as a majority of its land is beautiful farms. With warm summers and incredible views, it’s easy to see why many people settle here. 

Investing in a home in Mississippi will earn you average rent of $780 a month, but the operating expenses usually remain affordable here.

Arkansas

Arkansas has a robust economy, making it a great place for real estate investors to purchase rental properties as many people flock to Arkansas when looking for a career change, including working for one of the largest retailers - Walmart. Today Arkansas is home to 3 million people, and homes sell for a median price of $142,000. 

Oklahoma

Oklahoma is a beautiful state that almost 4 million people call home. Its median home price is $143,100 and average rent of $810 a month. With its incredible mountain ranges, forests, and beautiful weather, there are plenty of reasons to consider Oklahoma for your real estate portfolios. 

Iowa

Iowa is a state of many possibilities, including one with many business ventures, giving real estate investors a nice pool of renters for their properties. While it’s known for its farmland, Iowa is a bustling state with affordable real estate. Investors can buy homes in Iowa for a median price of $161,290 and make an average of $789 in monthly rent.

Alabama

Alabama is a gorgeous southern state with low median housing prices of just $161,300. Landlords make an average of $792 a month in rent, and residents reap the benefits of the fantastic food, landscape, and business opportunities the state offers. Healthcare is a prominent industry in Alabama, as is automobile exporting. 

Kentucky

Kentucky homes sell for a median price of $162,000 and bring in people from all walks of life. Farmers, healthcare professionals, and people working in manufacturing all find a plethora of jobs in the Kentucky area. Kentucky is filled with incredible views, fabulous horses, and plenty of recreational activity, making it a place 4.5 million people love to live. 

Ohio

Ohio is a midwestern state with one of the lowest costs of living. It boasts beautiful weather and plenty of recreation. There is plenty of land for farmers as well as urban land for other business ventures and opportunities. Ohio homes sell for a median price of $170,400, which is actually high for the area, as Ohio has experienced exponential growth this year.

Kansas

Homes in Kansas have a median price of $169,300 and with a population of 2.9 million, there are plenty of renters to target with your investment home. Kansas landlords charge slightly higher average rent than surrounding states, with an average rent of $850 per month. Kansas has four great seasons, low traffic levels, and a low crime rate, making it a great place to find amazing renters. 

Indiana

Indiana is another state you can buy a home for less than $200,000, which is often a target for first-time investors. Indiana homes sell for a median price of $174,000, and landlords earn around $826 a month in rent. Indiana has a diverse culture and many industries, making it easy to find renters for your investment home. 

Missouri

Missouri rounds out our places to rent for less than $200,000. With a much larger population of 6.1 million people, Missouri is a great place to start your real estate investment journey. With a median home price of $183,000 and average rent of $830 a month, new and experienced real estate investors can make a good living in Missouri, the state of incredible scenery and little traffic.

How To Buy A Home In The Cheapest States 

Once you figure out where you want to invest in real estate, the next step is figuring out how to invest in homes in the cheapest states. Fortunately, platforms like Roofstock Marketplace have you covered. 

Here’s how it works.

Browse The Marketplace

Anyone can browse the Roofstock Marketplace for free. You’ll see all the homes for sale on the platform. Each house on Roofstock is meant for investors - they are sold by other investors, often with tenants in them with a lease in place.

If you decide Roofstock is for you, it’s free to sign up for an account. With an account, you get access to all the valuable information Roofstock provides, including financial analyses, rent analyses, and potential cash flow for any investor.

Place A Bid

Once you’re a Roofstock member, you can place bids on properties. This, too, is free until the seller accepts your bid.

This makes it easy to test the waters and see what options you have. Roofstock does a fantastic job at analyzing properties to make sure their sales price is in line with their value, so you don’t need to worry that you’re getting ‘ripped off.’ 

If you’re using mortgage financing (which we recommend) to buy the property, you can rest assured that your loan will go through as far as the home’s value is concerned since Roofstock appraiser ensures the home is worth at least as much as the seller is asking.

Negotiate The Price And Terms

Just like in a regular sales transaction, the seller can negotiate the sales price and terms you offered. They can also decline the offer, but most counter offer in the hopes of meeting in the middle.

If you negotiate the terms, you’ll do so through the Roofstock platform. They make it easy to handle the situation while feeling supported.

If the seller accepts your bid, that’s when you’d pay a 0.5% of the sales price transaction fee to Roofstock. Until that point, the platform is 100% free.

Get Financing And Close The Loan

The final steps work like any other real estate investment purchase. You solidify your financing with the lender. You should already have a lender in place and a pre-approval from the lender, so you are halfway through the process already.

Follow the lender’s instructions to finalize financing. This will include securing appraisals and, if you want (it’s not required), another inspection, although Roofstock does a thorough inspection for you before listing the property.

Once you close the loan, you are the proud owner of a real estate investment property that may even earn you cash flow right away. 

Managing The Property

If you’ve bought a property that already has tenants in it - you are an instant landlord. You probably won't have to worry about fixing up the home or making any changes. Instead, you’ll follow the current lease (which you should have analyzed) and take care of your tenants.

If you’ve invested in a home in another state, Roofstock can help match you up with a property management company that can handle managing the property for you. This may include collecting rent, maintaining the property, dealing with emergencies, and filling any vacancies.

The Benefits Of Using An Investment Platform

Investing in real estate is a great way to diversify your portfolio, but there’s a lot more work involved in finding the perfect property than there is picking a stock, for example. That’s why using an investment platform like Roofstock Marketplace often makes sense. 

Here’s how an investment platform may help:

• You’ll have access to the hottest investment real estate listings all in one place. You don’t have to filter through the MLS or work with a real estate agent to find a property - everything is there for you.
• Roofstock does all the work for you. The preliminary work of analyzing the house, its financials, the neighborhood, school, and other important factors are done for you. There’s no wasted time researching a property and potentially missing out on it because another investor bought it. 
• Professionals in the real estate industry have your back. You need a solid real estate team when you invest in real estate, and having a platform like Roofstock on your side is imperative. Not only do they do the preliminary work, but they see you through to the end of the transaction when you become a real estate investor.
• Roofstock provides access to licensed professionals. Roofstock partners with many professionals to help make the real estate investment process simple. Whether you need property management, an inspector, or to find financing, Roofstock can help you.

• Are You Ready To Invest In Real Estate?

If you’ve decided real estate investments are right for you, there are plenty of ways to start. You don’t need a lot of money since you can leverage your investment with mortgage financing. With 20% - 30% of the purchase price and decent credit, you could find yourself able to invest in real estate, diversifying your portfolio.

If you are looking for the cheapest state to invest in real estate, start in West Virginia, but there are many other states with low real estate prices making it easy to jump into real estate investing when you're ready. 

Image by Emmanuel Puzynin from Pixabay