Best States for Rental Property Investment: Highest Tenant Retention Rates 2025

You know that feeling when a great tenant gives notice after just 18 months? There goes your cash flow for the next 2-3 months while you clean, market, and screen new tenants. Now multiply that frustration by however many units you own, and you'll understand why tenant retention is the secret weapon of successful multifamily investors.

Here's what most investors get wrong: they focus on finding markets with the highest rents instead of finding markets where tenants actually want to stay. The best states for rental property investment aren't necessarily the ones making headlines for rent growth—they're the ones where tenants put down roots and stick around.

Smart investors know that tenant retention rates directly impact your bottom line more than almost any other factor. A tenant who stays three years instead of 18 months can add $3,000-5,000 to your NOI per unit when you factor in avoided turnover costs, lost rent, and marketing expenses.

Let me show you which states are delivering the highest tenant retention rates in 2025 and why this should drive your investment decisions.

1. The Mountain West: Where Lifestyle Keeps Tenants Long-Term

Top Performers: Utah, Colorado, Idaho

The Mountain West consistently delivers some of the highest tenant retention rates in the country, and it's not hard to understand why. These states combine strong job markets with outdoor lifestyle amenities that create genuine quality of life—the kind that makes people want to stay put.

Utah leads the pack with average tenant retention rates exceeding 75%, driven primarily by the Salt Lake City and Provo metros. The state's diverse economy, from tech companies to financial services, provides job stability while the outdoor recreation access creates lifestyle satisfaction that translates to longer tenancy.

Colorado follows closely, particularly in Denver and Boulder markets, where retention rates hover around 72%. Despite higher living costs, tenants value the combination of career opportunities and mountain access enough to stay long-term. Idaho's Boise market has emerged as a retention champion, with rates approaching 70% as the city attracts relocating professionals who view it as a permanent lifestyle upgrade.

Why it works: These markets attract intentional relocators—people who moved there for specific lifestyle or career reasons rather than temporary economic opportunities. When someone chooses to live in Denver for the mountains or Salt Lake for the tech scene, they're making a lifestyle decision that supports longer tenancy.

Investor advantage: Lower turnover means higher NOI and more predictable cash flow. You can underwrite these markets with confidence in longer average tenancy periods.

2. The Southeast: Economic Growth Meets Housing Affordability

Top Performers: North Carolina, Tennessee, Georgia

The Southeast is delivering impressive tenant retention rates by combining job growth with relative housing affordability—a powerful combination that keeps renters both employed and satisfied with their housing costs.

North Carolina's Research Triangle and Charlotte markets are seeing retention rates around 68-70%, driven by the state's continued attraction of corporate relocations and university research activities. When companies like Apple invest $1 billion in new facilities, it creates long-term employment stability that translates to tenant retention.

Tennessee, particularly the Nashville and Memphis markets, is achieving similar retention rates around 67-69%. The state's no income tax policy attracts both businesses and workers, while relatively affordable rent-to-income ratios keep tenants from feeling rent-burdened.

Georgia's Atlanta metro consistently delivers 65-67% retention rates, benefiting from the region's position as a major logistics and corporate hub. The combination of job diversity and reasonable living costs creates an environment where tenants can both afford their rent and see career advancement opportunities.

Why it works: These markets hit the sweet spot of employment growth without the extreme cost pressures seen in places like California or New York. Tenants can build careers and lives without feeling financially squeezed, leading to longer-term residency patterns.

Investor advantage: Growing employment bases provide tenant pipeline security while reasonable rent levels reduce affordability-driven turnover.

3. Texas: The Retention Surprise in High-Growth Markets

Top Performers: Austin, Dallas-Fort Worth, Houston

Here's something that might surprise you: despite Texas's reputation for rapid growth and constant population churn, the state's major metros are actually delivering strong tenant retention rates—but you need to understand the nuances.

Austin leads Texas markets with retention rates around 66-68%, despite the city's explosive growth. The key is tenant demographics: the tech workers and professionals drawn to Austin tend to be career-focused relocators who view the move as long-term, not transient opportunity-seekers.

Dallas-Fort Worth achieves similar retention rates (65-67%) across its diverse submarkets, benefiting from the metro's economic diversity. Unlike single-industry boom towns, DFW's mix of corporate headquarters, logistics, and technology creates employment stability that supports longer tenancy.

Houston's retention rates (63-65%) reflect the metro's economic maturation beyond oil and gas. The growth in healthcare, aerospace, and technology sectors has created a more stable employment base that's less subject to commodity price volatility.

Why it works: Texas markets that historically struggled with retention due to economic volatility have diversified their employment bases. Today's Texas tenant is more likely to be a relocated professional building a career than a transient worker following short-term opportunities.

Investor advantage: These markets offer both growth potential and retention stability—a combination that's increasingly rare in today's market.

4. The Midwest: Steady Economics Drive Consistent Retention

Top Performers: Wisconsin, Minnesota, Ohio

Don't sleep on the Midwest when it comes to tenant retention. These markets might not generate flashy headlines, but they deliver some of the most consistent retention rates in the country through economic stability and affordable living costs.

Wisconsin's Madison and Milwaukee markets consistently achieve 70-72% retention rates, driven by the state's diverse economy and relatively affordable rent-to-income ratios. The presence of major universities and healthcare systems creates employment anchors that support longer-term residency.

Minnesota, particularly the Twin Cities metro, delivers retention rates around 69-71% through a combination of corporate headquarters concentration and quality of life factors. Companies like Target, 3M, and General Mills provide employment stability while the region's cultural amenities encourage longer-term residency.

Ohio's Columbus and Cincinnati markets are achieving 67-69% retention rates, benefiting from the state's business-friendly environment and affordable living costs. The presence of major universities and logistics companies creates steady employment demand while keeping rent burdens manageable.

Why it works: These markets offer economic stability without the extreme cost pressures or volatility seen in coastal or high-growth markets. Tenants can build stable lives and careers without constantly evaluating whether they can afford to stay.

Investor advantage: Predictable, consistent returns with lower risk profiles. These markets reward long-term buy-and-hold strategies focused on steady cash flow growth.

5. Strategic Factors That Drive High Retention Across All Markets

Beyond specific states, certain market characteristics consistently correlate with higher tenant retention rates regardless of geography:

Employment diversity: Markets dominated by a single industry (like oil towns or seasonal tourism areas) typically see higher turnover as economic cycles drive population movement. Look for metros with at least three major employment sectors.

Rent-to-income ratios below 30%: When tenants spend more than 30% of income on rent, they become more likely to move for any cost savings opportunity. Markets maintaining reasonable rent burdens see consistently higher retention.

University presence: Major universities create employment anchors through direct hiring and spinoff businesses while contributing to cultural amenities that improve quality of life and encourage longer residency.

Infrastructure investment: Markets receiving significant transportation or development investment tend to see improving retention rates as quality of life and employment opportunities expand.

Regulatory stability: States and cities with predictable landlord-tenant laws and stable tax policies create environments where both tenants and landlords can plan long-term.

Investor Takeaway

The best states for rental property investment in 2025 aren't necessarily the ones with the highest rent growth—they're the ones where tenants want to stay long enough for you to build meaningful cash flow and wealth. High tenant retention rates translate directly to higher NOI, more predictable returns, and lower operational headaches.

Focus your investment research on markets that combine employment stability, reasonable rent-to-income ratios, and quality of life factors that encourage longer-term residency. These characteristics create the foundation for sustainable rental property investment success.

The markets delivering the highest retention rates today—Utah, Colorado, North Carolina, Tennessee, and select Texas metros—offer the sweet spot of growth potential with operational stability. They attract tenants who view their relocation as a lifestyle improvement, not just a temporary economic opportunity.

Your competitive advantage comes from recognizing that turnover is one of your largest controllable expenses. Investing in high-retention markets isn't just about easier property management—it's about fundamentally better investment economics.

Sources & Data References

This analysis draws from:

• National Multifamily Housing Council (NMHC) Retention Studies - State and metro-level retention rate tracking

• U.S. Census Bureau American Community Survey - Migration and tenure length data

• Bureau of Labor Statistics Regional Employment Data - Employment diversity and stability metrics

• RentData.org Annual Retention Report - Apartment retention rates by market and property type

• CoStar Market Analytics - Rent-to-income ratios and market fundamentals

Learn The 5 Step Process Hundreds of Investors Have Used To Close Multifamily Deals In 90 Days With As Little As $18k Out Of Pocket.

LIVE Q&A TRAINING WITH JUSTIN THIS WEEK! 6PM PST

🙏🏼 Thanks for reading!

You can also find us on Facebook, and YouTube. 

Join our Facebook Group here!

Click here to join our WhatsApp Community.

Here's how I can help: 

1. Book a strategy call with Justin and his team to get "eureka moment" clarity about where you're at and where you want to go with real estate investing and plan.

2. Get investing tools and learning by starting with The Multifamily Schooled Courses.  

—Justin Brennan