Top U.S. States for International Real Estate Investment: A Deeper Dive into Opportunities

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In my last article, I highlighted the impressive surge in foreign investment in U.S. residential real estate, reaching $56 billion. This rebound isn’t just a broad trend; it’s concentrated in specific regions. For international real estate investors, understanding these key destinations is vital. Sometimes, it’s definitely not worth following the crowd. Each state offers unique advantages, drawing global capital for distinct reasons. Let’s take a closer look at the top U.S. states attracting international buyers and what makes them prime investment opportunities.

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The Dominant Destinations: Where International Investors Are Buying

The latest data from the National Association of Realtors® 2025 International Transactions in U.S. Residential Real Estate report clearly shows where international capital has been flowing. While the U.S. market as a whole is attractive, a select few states consistently capture the lion’s share of foreign purchases.

These five states combined account for a substantial portion of all international transactions, highlighting their enduring appeal and the diverse opportunities they present for property investors.

Related: The Best U.S. Real Estate Markets for Foreigners Seeking Cashflow and Equity Growth in 2025

Florida: The Unrivalled Investment Magnet

Year after year, Florida holds its position as the top destination for international property investors. With 21% of all foreign buyers choosing the Sunshine State, its appeal is undeniable. As Lawrence Yun, NAR Chief Economist, noted, “Florida remained the top destination for foreign home buyers, extending a streak of at least 15 years.” This consistent popularity is fuelled by several factors:

• Tourism and Vacation Homes: Florida’s world-renowned beaches, theme parks, and warm climate make it a prime location for vacation homes and short-term rentals, offering attractive income potential.
• Diverse Economy: Beyond tourism, Florida boasts growing sectors in technology, finance, and healthcare, drawing permanent residents and creating robust demand.
• No State Income Tax: This is a significant draw for high-net-worth individuals and businesses, contributing to strong population growth.
• Increasing Inventory: Yun also pointed out that a “significant increase in the state’s housing inventory” has boosted Florida’s appeal, providing more options for eager buyers.

California: High Value, High Appeal

Capturing 15% of international buyers, California continues to be a powerhouse market. Its draw isn’t about affordability, but about opportunity and prestige. Properties in California, particularly in major metropolitan areas, command some of the highest prices globally, yet they remain attractive to international investors looking for long-term appreciation and a stable, high-demand market.

• Economic Engine: Home to Silicon Valley, Hollywood, and diverse industries, California’s economy is a global leader, supporting strong job growth and demand for housing.
• Diverse Lifestyles: From bustling cities to serene coastal towns and mountain retreats, California offers a vast range of lifestyles, catering to varied investor preferences.
• Prestige and Status: Owning property in California is often seen as a mark of status and a secure long-term investment, especially for high-net-worth individuals.

Texas: Growth, Affordability, and Opportunity

Texas has emerged as a significant player, drawing 10% of international buyers. Its appeal lies in its dynamic growth, relative affordability compared to coastal states, and a pro-business environment.

• Economic Boom: Texas has experienced substantial population and job growth, driven by its energy sector, burgeoning tech industry, and corporate relocations.
• Affordability: While prices are rising, Texas offers more accessible entry points for investors compared to markets in California or New York, providing better rental yields in many areas.
• No State Income Tax: Similar to Florida, this tax advantage makes Texas an attractive place for both residents and investors.

New York & Arizona: Niche and Emerging Appeal

Rounding out the top five are New York (7%) and Arizona (5%), each offering distinct reasons for international investment:

• New York: The global financial capital, New York draws investors seeking luxury urban properties, particularly in New York City. Its cultural vibrancy, status as a business hub, and stable demand continue to attract those looking for prime, high-value assets.
• Arizona: This state is gaining traction due to its attractive climate, growing retirement communities, and relatively more affordable real estate compared to its West Coast neighbor, California. It offers strong potential for both seasonal rental income and long-term appreciation in burgeoning metropolitan areas like Phoenix.

Related: The 7 Best U.S. Real Estate Markets to Buy Rental Properties in 2025

Key Investment Considerations Across These States

Regardless of the specific state, several factors underpin successful international real estate investment in the U.S.:

• All-Cash Advantage: As we saw in our previous article, 47% of international buyers use all-cash purchases. This gives them a significant edge, particularly in competitive markets or when navigating higher U.S. mortgage rates. As Lawrence Yun noted, this trend is partly “due to stubbornly high mortgage rates.”
• Property Type Preference: International investors show a clear preference for suburban areas (44% of purchases) and single-family homes or townhomes (77%). These property types often offer better long-term appreciation and rental income potential.
• Investment Purpose: A large share of international buyers (47%) purchase properties for vacation homes or rentals. This highlights a strategic, long-term approach focused on either personal use combined with income generation, or purely as an investment vehicle.
• Protection of Private Property Rights: A foundational draw for international investors, the U.S. provides strong legal protections for property owners. As Lawrence Yun emphasized, “Foreign buyers are drawn to investing in American real estate, in part, by our country’s strong protection of private property rights.” This legal stability provides peace of mind for global capital.

The U.S. real estate market, especially in these top states, continues to offer compelling opportunities for international property investors. By understanding the unique strengths of each region and aligning them with your investment goals, you can strategically navigate the market and unlock significant value.

Related: U.S. Real Estate Market Forecast and Expert Predictions for the Next 5 Years to 2030

My Two Cents…

While this data is interesting – and not at all surprising to me – most of the transactions we’ve been party to for foreign investors have been in the Midwest and South. For me as a rental property investor, I’m interested in cashflow, housing affordability, and a strong jobs market. Experience tells me that these are the topline metrics that prove most useful when we’re looking for an investment opportunity that’s going to pay for itself with cashflow, and grow in value over time.

That said, most of the enquiries we get are from buyers who already have a market in mind, and those initial thoughts tend to correlate with the data in this report. However, once we weigh those markets against other more affordable – and perhaps less glamorous – options, it’s pretty clear where the winners are. If we want to own a rental property that generates enough cashflow to pay for the financing and operational costs, we focus on secondary markets with excellent rent-to-price ratios, and where local residents can comfortably afford to rent and buy their own home.

This is why we’re seeing house prices fall in Texas, Florida and California. Prices in those markets skyrocketed in the past 5 years. Some Florida markets saw prices rise 50% between 2020 and 2022 alone. That’s just pushed affordability out of range of most buyers, so now prices in those markets are falling. Anyone who bought there in the last 2 years would likely lose money if they sold today. Meanwhile, secondary markets like Cleveland and Kansas City – where we’ve been quietly buying rental properties since 2022, are thriving.

Previous Article: Foreign Investment in U.S. Real Estate up 33.2% in 2025

Frequently Asked Questions (FAQs)

Which U.S. states are most popular among international real estate investors?

The top five U.S. states for international real estate buyers from April 2024 to March 2025 were Florida (21% of foreign buyers), California (15%), Texas (10%), New York (7%), and Arizona (5%). These states consistently attract global capital due to their diverse economies, lifestyle attractions, and investment potential.

Why is Florida a top destination for foreign buyers?

Florida has maintained its position as the leading state for international property investors for at least 15 consecutive years. Its appeal stems from a strong tourism industry, attractive climate, diverse real estate offerings including vacation homes and investment properties, and a business-friendly environment without state income tax. NAR Chief Economist Lawrence Yun also noted that Florida’s increasing housing inventory has helped boost its appeal.

What makes California attractive to international property investors?

California draws international investors due to its robust economy, particularly in the tech and entertainment sectors, and its prestigious real estate markets. Despite higher median prices, the state’s long-term appreciation potential, diverse metropolitan areas, and desirable lifestyle continue to attract global capital, especially from buyers looking for high-value properties.

What should international investors consider when choosing a U.S. state for real estate?

International investors should consider factors such as local market dynamics, property appreciation potential, rental income opportunities, tax implications, and lifestyle preferences. The strong protection of private property rights in the U.S. is a consistent draw. Additionally, understanding the breakdown of resident vs. non-resident foreign buyers and the prevalence of all-cash purchases can inform strategy in competitive markets.