I came across a short article on the Washington Post today that maps out the net migration patterns between states in the US and shows us this map:

Net Migration Map Among US States

Net Migration Among US States from https://www.washingtonpost.com/news/wonk/wp/2015/12/28/the-states-that-are-seeing-a-boom-in-population-and-the-states-that-arent/

And opportunity to talk about the importance of demographic trends when picking investments.

If we look at the map, we see that some of the most attractive states in the country are Texas, Georgia and Florida. It’s worth going through the thought experiment to try to figure out why that is.

All three of the states are in the South. That means that they have warmer weather, then places like the Northeast. But that’s not really a sufficient explanation as to why these places more attractive. California, New Mexico, and Arizona all have warm weather and they do not have the humidity that the American South does.

So what else might be attractive about these places?

For one, taxes. Both Texas and Florida do not have a state income tax. Georgia does have an income tax, but it’s middle-of-the-road as far as state taxes go. It’s about half the level of California, for example.

Another factor that goes hand-in-hand with taxes is the overall business climate. These three states, Texas, Florida, and Georgia are all very business friendly. Texas and Georgia. For example, are the two most landlord friendly states in the country. In Georgia, you can have a nonpaying tenant out and evicted in four weeks and in Texas, you can do it in three. In this regard, Florida is not as business friendly as the other two.

For whatever combination of reasons, people are moving towards Texas, Georgia, and Florida. So what the design mean for your business?

There’s a saying out there that says demographics is destiny. If you do any kind of business or any kind of investing, you need other people to buy your products, services or your investment’s production. So it’s a matter of basic sense that you want to put your money into places where people are going towards rather than where people are leaving from.

The great thing about a map like this is that it shows us the overall effect of attractiveness for state. It would be even more useful if it was broken down on the city or county level. But this is a good first approximation.

So let’s say you want to start building your rental real estate empire. Where do you go?

Fortune for me, I have home bases in both Georgia and Florida. So when I buy rental houses, that’s where I go.

You might be interested more in Texas. Texas is an attractive state as receiver in the map, it’s got a great job situation overall. The oil refining business that is centered in Texas along the Gulf Coast is fairly robust even with the dramatic swings in the price of oil. So a stable and growing jobs base is always good for providing tenants for you.

You might be interested in real estate or you might not. If you’re reading this, you are most likely interested in business development in some way, whether it’s actively being an entrepreneur or investing in already established companies. By tailoring your business activities into positive demographic trends, you maximize your chances for success. It really is that simple.

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