ATLANTA, GA
All you Need to Know for
U. S. Property Investment
Location, Location, Location
BY RJ PALANO
The one constant in life is change and we sure have that in the U. S. with President Trump! As business entrepreneurs, we must adapt to what’ s happening around us by looking into the future to make assumptions and projections based on the constant stream of new information coming our way.
To this end, there is a terrific new book out that I highly recommend you read – Big Shift Ahead, by John Burns and Chris Porter. These are real estate guys and the book is about demographic clarity for business in the U. S. The first few chapters provide some great insights, so I’ ve included some of the highlights here:
“ Sweeping demographic and generational shifts are quickly transforming America. Every individual and business feels the impact of government policies, the sharing economy, new technologies and rapidly changing societal norms. Many of the shifts make life better for some and worse for others. The game has changed dramatically.”
Population growth shifts For all our investor friends in Atlanta, you will be as delighted to read the following excerpt as I am:“ Low State government income tax policies have shifted population growth south.”
This is so clearly seen as the‘ high income tax’ states in the Northeast, like New York and Massachusetts, continue to lose business and population as the people follow the jobs. Florida and Georgia continue to have an inflow of retirees and people looking for work.
Why would anyone on a fixed income live in New York – with a personal state income tax that tops 10 % – when they can have a higher quality of life in low to no income tax states? Look, I live in Tampa, FL. No way am I leaving. As I write this article, it’ s 72 degrees and I pay no state income taxes.
By the way, California tops out at 13.2 % on individual income taxes.
Burns’ and Porter’ s book goes on to state that:“ Growth will continue to flow south toward the affordable sunshine states. California, the Northeast and Midwest will continue to grow more slowly. The Southern regions where 42 % of Americans currently live will welcome 62 % of U. S household growth. State tax and growth policies determine where America lives.”
As a real estate investor, this is a clear sign where to buy investment properties in the U. S. If you want house appreciation, buy where people are moving to, not from where they are moving.
Homeowners versus renters Burns and Porter add:“ Owning( homes) has clearly declined in importance. People rent, borrow and share more than in the past. The homeownership rate has already declined to the lowest level in more than 40 years. Homeownership should decline further – to less than 61 % by 2025. The housing crisis in the late 2000s highlighted the risk of homeownership to a younger population, now in adulthood. They know the risks. They lack enough confidence in their jobs to take on a 30-year mortgage commitment. Both the number of homeowners and renters will increase. By 2025, we expect 5.2 million more homeowner households and 7.3 million more rental households.”
That is good information we can all use when deciding what to invest our money in and where to buy houses.
Location, location, location The January report by Attom Data Solutions in the U. S. had seven economists give their economic outlook for 2017. They each generally concluded
44 FEBRUARY 2017 SA Real Estate Investor www. reimag. co. za