Want to learn why almost 1,000 people are moving to Florida every day and why it’s arguably the #1 state to invest in real estate?
I recently had the pleasure to speak with John Casmon on his podcast, Multifamily Insights, where one of the topics we discussed was why I decided to focus our efforts in Florida 15 years ago.
Nowadays, it seems like everyone knows at least one person that has either moved to Florida, is planning to move, or has dreams of moving in the future. In fact, the Sunshine State is becoming such a hot place to live (no pun intended) that if you Google:
“Why are so many people moving to…”
It’ll autosuggest that you complete your search query with the word “Florida”. We took notice of the growing trend relatively early and decided to make the switch before other investors could even realize the opportunity.
Today I’m going to share with you a few characteristics unique to the state that helped make our decision easier, as well as the returns we’ve managed to earn since our transition.
So without further ado, let’s get started.
Florida Residents Enjoy a Generous 0% State Income Tax
In a world where inflation is sky-high and the cost of living is gradually increasing year after year, the last thing people want to worry about is yet another tax on their money.
That’s why one of the most significant reasons so many people call Florida home is because of their 0% state income tax. Think about it… if you’re making $75,000 and live in New York, roughly 11.7% of that ($8,775) is going directly to the state.
Things get even worse if we start talking about places like California. If we make that same $75,000 income in California, a whopping 14.63% ($10,972) will be due come tax season. Just in STATE tax!
In other words, Americans are sort of getting paid to move to Florida… but this isn’t just unique to them. Seven other states also boast a 0% state income tax including Wyoming, Washington, Texas, Tennessee, South Dakota, Nevada, and Alaska.
So why is Florida the one getting most of the love?
This leads me to my next point…
Sunny Skies, Warm Weather & Beautiful Beaches
With sunny skies and warm weather year-round, it’s no wonder why Florida is commonly referred to as the Sunshine State. Heck—even the winters here are very comfortable!
The coldest month in Florida is typically January, which has an average low of 59°F and an average high of 76°F. If you live practically anywhere else in the United States, I can bet your jaw dropped to the floor when you read that the LOWS are nearly 60 degrees in the middle of winter!
You know, every now and again I see people who absolutely refuse to move out of places like California (regardless of the insane taxes) for one reason… the beautiful weather.
Sure, the weather in the Golden State is referred to by many as “perfect,” but is it really worth spending an extra 14.63% in state income tax to live there? Especially when you can get just as good weather in Florida (if not better) AND not have to worry about ridiculously high taxes?
I don’t think so.
Not only that, but Florida is famous for its gorgeous, crystal-clear beaches that feature long boardwalks, delicious food, and raving nightlife. It’s no wonder why Miami Beach is consistently rated as the #1 Spring Break destination!
Florida’s Job Market is Sizzling HOT In 2022
If I had to describe Florida’s job market in one word… it would be BOOMING! At the time of writing, Florida’s unemployment rate is sitting at a mere 2.7% and is slowly approaching the all-time low of 2.4% that we saw back in 2006.
In comparison, the United States’ current unemployment rate is a full percentage point higher at 3.7%. In fact, the Sunshine State’s unemployment rate has been lower than the national rate for nearly 24 consecutive months!
This is due to a variety of factors. For one, Florida was the state that was most hesitant to lock down during the COVID-19 outbreak. This meant more businesses stayed open and more people kept their jobs.
Another reason is because of the abstinence of personal income tax and the lower-than-average corporate tax rate, which encourages more people to start their own businesses and ultimately results in more jobs being created.
So, you now know a few of the main reasons why so many people are moving to the Sunshine State. But now the question is…
Did KRI find success after making the switch from Ohio to Florida?
Short answer: YES!
Long(er) answer: We’ve done a ton of deals ever since we shifted our focus to the Florida market, which resulted in our investors earning impressively high annual rates of return.
We typically aim for an annual return of 15% to play it safe, but as you could imagine we’ve overshot that target on numerous occasions. Here are just a few examples:
Belle Rive Club Apartments: 23.4% Realized IRR
Coachman Club Apartments: 32.71% Realized IRR
Whispering Oaks Apartments: 38.49% Realized IRR
With returns like those, I think it’s safe to say our decision was not only justified but ultimately became very profitable for us in the long run.
To learn more about how our multi-family real estate investing strategies can help you reach your investment goals, click here to listen to the full podcast with me and John Casmon.
Disclaimer: This is not an offer to buy or sell any security.
All investments involve risk and may result in partial or total loss. Past performance is not indicative of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. Prospective investors should carefully consider their investment objectives, risks, charges and expenses, and should consult with a tax, legal and/or financial adviser before making any investment decision.