Bottom line—demographic trends are changing significantly. Sunbelt states now benefit from migration that formerly populated the West Coast. The gap between pro-landlord and anti-landlord states is wider than ever. Good weather and beach proximity may no longer compensate for
systemic economic shortcomings. Favorable tax and business regulations lead to job growth, which in turn drives demand for housing. It is not safe to assume that the best markets of the last 20 years will be the best markets for the future.
RICHARD D. GANN, JD Managing Partner 1031 Capital Solutions (800) 445-5908 1031CapitalSolutions.com
Richard (Rick) Gann is an attorney, licensed real-estate broker, and general securities principal specializing in 1031 exchange solutions and he is co-author of the book “How to Retire from Being a Landlord”. Before transitioning to financial services, Rick practiced law for nine years in the fields of real-estate taxation and estate planning. Rick has proudly helped numerous clients manage taxes on their real- estate holdings and investments.
1. https://www.ppic.org/publication/californias-population/#:~:text=California’s%20population%20growth%20has%20slowed,rest%20of%20the%20United%20 States 2. https://www.usnews.com/news/best-states/articles/2021-04-27/census-shows-california-population-growth-at-a-record-low 3. https://www.usnews.com/news/best-states/california/articles/2021-04-26/california-losing-congressional-seat-for-first-time 4. https://www.rand.org/pubs/research_briefs/RB7511.html 5. https://www.sandiegouniontribune.com/business/sdut-aerospace-jobs-fall-2016mar01-story.html 6. https://www.forbes.com/sites/adamandrzejewski/2020/05/19/why-california-is-in-trouble--340000-public-employees-with-100000-paychecks-cost-taxpayers- 45-billion/?sh=352ef3065fb8 7. https://www.thebalance.com/california-state-taxes-amongst-the-highest-in-the-nation-3193244 https://en.wikipedia.org/wiki/Fuel_taxes_in_the_United_States https://howtostartanllc.com/taxes/llc-taxes/business-taxes 8. https://www.thumbtack.com/survey#/2019/1/states 9. https://www.calgold.ca.gov/ 10. https://www.usnews.com/news/best-states/articles/2020-11-03/which-state-has-the-most-regulations 11. https://www.jdsupra.com/legalnews/california-is-the-first-to-bring-44889/ 12. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB1482 13. https://www.labormarketinfo.edd.ca.gov/data/employment-projections.html 14. https://www.marcusmillichap.com/research 15. According to the Pew Trusts, approximately 93% of state and local government workers suffering a job loss reported their layoff was temporary in a May 2020 survey. https://www.pewtrusts.org/en/research-and-analysis/articles/2020/06/16/how-covid-19-is-driving-big-job-losses-in-state-and-local-government 16. https://www.zippia.com/advice/states-with-highest-lowest-tax-burden/ 17. https://files.taxfoundation.org/20200625094716/Table-2-of-Civilian-Workforce-6-25-01.png 18. https://www.bizjournals.com/phoenix/news/2021/09/01/arizona-leads-nation-again-small-business-growth.html 19. https://www.glassdoor.com/ 20. https://www.marcusmillichap.com/research/market-report/phoenix/phoenix-3q21-multifamily-market-report 21. Ibid. 22. https://www.nytimes.com/interactive/2021/us/texas-covid-cases.html DISCLAIMER: There are material risks associated with investing in DST properties and real estate securities including liquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, returns and appreciation are not guaranteed. IRC Section 1031 is a complex tax concept; consult your legal or tax professional regarding the specifics of your particular situation. This is not a solicitation or an offer to sell any securities. DST 1031 properties are only available to accredited investors (typically have a $1 million net worth excluding primary residence or $200,000 income individually/$300,000 jointly of the last three years) and accredited entities only. If you are unsure if you are an accredited investor and/or an accredited entity please verify with your CPA and attorney. Because investor situations and objectives vary, this information is not intended to indicate suitability for any particular investor. Securities offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Advisory services offered through Concorde Asset Management, LLC (CAM). 1031 Capital Solutions is independent of CIS and CAM. 23. https://worldpopulationreview.com/us-city-rankings/fastest-growing-cities-in-the-us 24. https://www.nmhc.org/research-insight/analysis-and-guidance/rent-control-laws-by-state 25. https://www.marcusmillichap.com/research/market-report/dallas-fort-worth/dallas-fort-worth-3q21-multifamily-market-report 26. https://www.marcusmillichap.com/research/market-report/austin/austin-3q21-multifamily-market-report 27. https://www.marcusmillichap.com/research/market-report/san-antonio/san-antonio-3q21-multifamily-market-report
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