Topic: The Sun Belt States

The Sun Belt States

The sun belt states are of critical importance in the world of commercial and residential real estate investing; hence, why we include this article as a resource in your passive income investment journey.

Who Coined the Phrase Sun Belt?

The term “Sun Belt” was coined by writer and political analyst Kevin Phillips in his 1969 book “The Emerging Republican Majority”. It describes the southern region of the United States that includes 18 states stretching from California to Florida.

States in the Sun Belt

States that are entirely within the sunbelt include: Arizona, New Mexico, Texas, Louisiana, Mississippi, Alabama, Georgia, Florida, and South Carolina.

States that have their southern portion within the sunbelt include: California, Nevada, Utah, Colorado, Kansas, Oklahoma, Arkansas, Tennessee, and North Carolina.

This expansive area, named for its abundant sunshine has attracted industries such as oil, military, and aerospace, which brings jobs. The warm and sunny climate has also made it a big area for many retirement communities (think Arizona and Florida historically). Most recently, due to many business-friendly policies, the sun belt has also attracted industries such as finance which was traditionally on the East Coast as well as semiconductor, crypto, and green energy industries (solar and wind).

Why Investors Love the Sun Belt

In addition to the warm climate, there are other factors that make the sun belt particularly appealing.

Job Growth: Robust job markets in the sun belt lead to more people relocating to these states. Cities like Dallas-Fort Worth, Houston, Atlanta, and Phoenix consistently rank high in job creation. As employment opportunities increase, so does the demand for housing, including apartments and multi-family units.

Affordability: Unlike many non-sun belt states, the region offers either low or no corporate taxes or state income tax for residents on earnings (Florida, Nevada, Tennessee, Texas). This affordability, coupled with economic opportunity, attracts both individuals and corporations.

Live-Work-Play: The abundance of land and population growth in the sun belt states creates a virtuous cycle where more people move to this area, which leads to newer and more exotic forms of entertainment that are started in these states. From Disneyworld in Florida, to Universal Studios Kids Resort in Texas, the southern states always have something bigger and better - not to mention all the master planned communities with their own water parks.

The Future of the Sun Belt

The sun belt includes seven of the ten largest U.S. cities and numerous mid-size metropolitan statistical areas (MSAs). Over the past decade, this area accounted for 75% of the total U.S. population increase. By 2030, it is projected that the sun belt will hold approximately 55% of the national population.

Popular Cities of Major Growth in the Sun Belt

Dallas-Fort Worth, Texas: Leading the pack, DFW experiences explosive population growth. Features a diverse economy and job opportunities including finance and manufacturing. Several big companies call Dallas home included AT&T, Dr. Pepper, JC Penney, and Toyota North America.

Houston, Texas: Houston’s thriving energy sector, cultural diversity, and strong job market contribute to its multi-family property demand. The city’s resilience after natural disasters underscores its attractiveness to investors.

Austin, Texas: Known for its tech scene, Austin attracts young professionals and entrepreneurs, and now they have Elon Musk with Tesla. AMD which build chips like NVIDIA is also based in Austin.

San Antonio, Texas: San Antonio’s affordability, historic charm, and steady job growth create a favorable environment for multi-family investments. The city’s cultural appeal and quality of life enhance its allure.

Orlando, Florida: Orlando has a huge tourism industry due to its warm climate.

Tampa, Florida: Tampa offers waterfront lifestyle, business-friendly policies, and job opportunities.

Jacksonville, Florida: Jacksonville offers affordability, port access, and economic diversification.

Atlanta, Georgia: Atlanta’s robust economy, cultural scene, and transportation infrastructure make it a hotspot for multi-family investments. It is home to one of the biggest brands in the world, Coca-Cola.

Phoenix, Arizona: Phoenix’s sunny climate, job growth, and affordability position it as an attractive market for multi-family properties including retirement communities. It is now becoming a hot spot for the chips manufacturing industry.

Charlotte, North Carolina: Charlotte’s financial sector, quality of life, and population influx has contributed to its real estate boom.