U.S. citizens are waving goodbye to high tax states, such as California, Hawaii, and Oregon and are opting for cheaper alternatives, according to Fox Business. America is currently home to seven states which don’t tax their resident’s income. However, these states typically have higher property taxes in the country. Therefore, before you go filling up your real estate portfolio with properties in the low-income tax band, it’s important that you take into consideration these factors.
Are locals flocking the state?
In general, the Northeast of America is seeing more residents pack their bags than in any other area. Massachusetts saw 55.7% outbound moves last year, while 62% said goodbye to Connecticut. But, secondary states, including Washington, Texas, Colorado, Nevada, and Idaho are thriving, according to Lawrence Yun, the chief economist of the National Association of Realtors. Individuals are choosing these states as taxes are lower, meaning they can afford to spend more investing in their properties. However, before actually putting in an offer, many home buyers rely on a home loan calculator to estimate their monthly mortgage, which needless to say, is a smart and very important move before making such a big decision.
Flourishing job prospects
Low tax states have also become more appealing to the nation due to the job opportunities that they present. Forbes reports that since the federal tax overhaul was introduced, private sector job growth has moved 70.5% faster in low tax states than in high tax states. As 46% of people who moved last year cited their job as the reason behind their move, it’s essential that you take note of the areas where job prospects are high. By adding housing from these areas to your portfolio, you’ll ensure that your properties are constantly occupied and that you have tenants in them with a reliable source of income.
What do property prices look like?
New research has revealed that it’s cheaper to rent in 59% of America’s markets. Meanwhile, it’s also more cost-effective to rent in all 18 of the most populated U.S. counties, such as Roane County, Peoria County, and Green County. Therefore, as a property investor, you should suss out these markets as you can be sure that locals will be looking to rent in these locations.
Americans are shunning high tax states in favor of cheaper alternatives. Additionally, they’re also seeking out homes in areas where job prospects are high. So, as a property investor, you should use this knowledge to your advantage.
