The top ten states Americans are flocking to in droves to benefit from a much lower cost of living – and then ten they are leaving

Americans battling the crippling cost of living crisis are fleeing to the South to more affordable states where there are favorable tax rates. 

Tens and thousands of people are moving across the country to escape higher expenses which have put the squeeze on residents to areas with lower overall costs. 

Florida is the most popular state people are relocating to with 16,259 looking to make the move this year, according to data from ConsumerAffairs.

While eight of the 10 states with the largest influx of new residents are in the south due to their cheaper cost of living and lower tax rates. 

California is the state with the most people moving out this year with 17,824 followed by New York with 5,997 and Washington with 5,004.

Americans battling the crippling cost of living crisis are fleeing to the South to more affordable states where there are favorable tax rates

Florida remains the most popular state to move to as it boasts a better quality of life, lower cost of living and has no income taxes. 

The Sunshine State does not tax earned income or investment income which attracts those looking for financial advantages.

Texas is the second most popular relocation destination with 10,602 people looking to live there this year. 

Its thriving economy, strong job market, affordable cost of living and good weather makes it an attractive place to live. 

The state gained over nine million residents between 2000 and 2022, according to census data. 

More than 160 companies including Tesla, AT&T and Toyota have relocated to Texas in the last three years to make the most of a combination of unique competitive business advantages.

It also has no state income tax and simplifies taxes for businesses which helps them increase profits. 

North Carolina is third on the list of states people are moving to this year with 7,970 people contemplating the move. 

The state’s lower cost of living and housing is attractive to Americans priced out of other markets and it is one of the most affordable places in the country. 

It boasts a strong economy and has low tax rates which attracts both individuals and businesses.

The state offers scenic views and easy access to the outdoors as well as a mild climate which provides enjoyable weather all year round.

Wilmington in North Carolina had the highest amount of people moving in last year. 

Arizona and South Carolina also make up the top five states Americans are flocking to with 5,614 and 5,585 considering the move this year. 

Arizona has been increasing in popularity in recent years with more and more retirees moving to the state.

The cost of living is lower than most areas with cheaper housing, utilities and taxes compared to nearby California. 

It has no estate or inheritance taxes which are popular policies among elderly Americans. 

An increasing number of people are moving to South Carolina to take advantage of its lower cost of living which is six percent lower than the national average. 

It has lower housing, transportation and healthcare costs compared to other states. 

South Carolina also boasts a comfortable climate and easy access to outdoor activities as it is close to the Atlantic ocean and blue ridge mountains.  

California is the state people are leaving the most as almost 18,000 residents signified their intention to leave this year. 

They are leaving the Golden State in droves, citing the high cost of living and poor quality of life as driving factors.

People have also citied politics, safety concerns and traffic as their reasons for leaving the state.

The mass exodus began in 2019 and California’s state population only rose again for the first time last year by 0.17 percent. 

New York was second on the list of US states seeing the most residents leave with 5,997. 

Its population has been declining in recent years with over 100,000 people leaving between July 2022 and July 2023.

The state has some of the highest costs of living in the country and many are priced out of housing.

Residents are put off by New York’s high taxes while others are choosing to leave due to crime, safety concerns and wanting a slower pace of life. 

Washington came in third as 5,000 people signaled their intention to leave the state this year. 

High cost of living, unaffordable housing and public safety are some of the reasons why people are fleeing. 

More than 250,000 people moved out of Washington state between 2021 and 2022, according to census data. Inconvenient traffic and miserable weather are other reasons why people are looking to move out. 

Colorado and Illinois rounded up the top five states which are seeing the most people move out this year. 

People in Colorado have stated that they are looking for more affordable housing, lower taxes and all round higher quality of life. 

They also pointed to the high cost of living as well as high levels of crime and homelessness as their reasons for leaving.

While Illinois has seen a population decline for 10 consecutive years as people continue to move out in their droves. 

Residents have complained about taxes, housing and crime in the state while others mainly cited better job opportunities or retirement as their reason for leaving.

source: https://www.dailymail.co.uk/yourmoney/housing-market/article-13517869/The-ten-states-Americans-flocking-droves-benefit-lower-cost-living-ten-leaving.html

The Changing Economy and Its Impact on Rent Collection

Rents are stagnant, as indicated by Radix data showing that rents are down 1.5% on a year-over-year basis, nationally. Combine that with the more than 400,000 new units that came online in 2023 and another half million anticipated for 2024, and economic conditions will continue to be challenging.

To combat stagnant rent as well as supply issues, many operators implement traditional concessions, which can be  short-sighted and more costly in the long-term. While measures such as offering free rent may fill apartment homes faster and bolster occupancy, concessions can ultimately be a slippery slope and detrimental to the bottom line and overall property performance.

In today’s economic landscape, it is crucial to sidestep traditional concessions and get residents on board with technologies that align with multiple business objectives.

Concessions versus Rewards

One of the most effective strategies operators can deploy at their communities involves digitizing the collections process and rewarding residents for positive behavior.

In doing so, they are providing the perception of concessions without having to incorporate large discounts. Instead, operators allow residents to earn discounts through acts such as making timely digital payments or posting community reviews, which helps them retain the market value of apartment homes.

By definition, the word concession means to give something up. For operators, offering concessions equates to giving up revenue in order to drive occupancy. On the flip side, by rewarding positive renter behavior, both operators and residents can benefit.

The rewards given are nominal in comparison to costs associated with concessions. Residents are able to earn points that add up to a dollar amount that is significantly less than offering free rent. For instance, 400 points earned in rewards may feel like 400 dollars to a resident even though it isn’t. Those points are of tremendous value when residents redeem them and see a discount on their next month’s rent.

Embracing Technology: A Digital Approach

The implementation of digital payment platforms embedded with a rewards program is also modernizing the rent collection process.

Via a mobile app, residents can pay monthly obligations in a convenient, secure and contactless environment that enhances efficiency and optimizes on-time payments. This type of platform simplifies the process with features such as access to payment history, upcoming payment reminders and the ability to sign up for autopay or schedule one-time payments. For residents who still prefer traditional methods of paying rent, the platform also provides access to a mobile check-pay service.

“Having access to multiple payment options is something that our residents really love, and the rapid adoption rate of digital payments at our communities speaks volumes,” said Chris Gray, president at Moss & Company. “They appreciate the flexibility in how they can pay their rent every month. With more residents using the platform, we’re seeing a more stable income stream and even increased associate efficiency.”

In addition to providing a more seamless experience when paying rent, operators that combine rewards with digital payments can realize even greater returns. Offering points for cash-back rewards for such positive renter behavior as posting online reviews, referring new residents or participating in community events can motivate residents to pay their rent on time each month. Moreover, offering resident rewards costs operators less than offering eight weeks of concessions.

According to internal data from Domuso, offering rewards for on-time payments plus the option for autopay reduces late payments by 5% annually. In terms of cash-flow, that can potentially add up to $800,000 per year.

Long-term Benefits, Sustainable Economic Success

“The rent collection process is one of the most crucial aspects of ensuring successful operations,” said Ron Klein, VP of Product for Domuso.

“In a financial climate where many factors are beyond our control, it’s essential to see the bigger picture and be proactive when possible. By streamlining the process for residents and offering rewards for positive behavior, operators can improve community satisfaction and maintain optimal occupancy rates in any economic landscape.”

Beyond increased occupancy rates and greater resident satisfaction, operators using an intuitive payment platform can drastically diminish financial risks by having 100% chargeback protection, as well as by offering certified payment options, including credit, debit and ACH transfers.

“With certified funds, we reduce our exposure to potential fraud because we know the money is there,” Gray said. “By using a platform that doesn’t charge for ACH payments, we are realizing almost $9,000 in savings every month. The platform has renewed our financial confidence, knowing that not only are rent payments more consistent and on time, but there are safeguards in place to protect both residents and ourselves.”

Although economic challenges are inevitable, they do not have to hinder rent-collection processes or damage the bottom line.

Embracing modern solutions such as digital payment platforms that streamline the process while incentivizing timely payments is one of the most effective strategies in mitigating the negative financial impacts of late payments and delinquencies. By leveraging technology and resident rewards in the rent-collection process as opposed to offering traditional concessions, operators can better navigate economic struggles, maintain occupancy rates, position their communities for long-term success and bolster NOI.

Source: Rental Housing Journal

White House Seeks Higher Taxes From Landlords

White House Seeks Higher Taxes from Landlords

In a significant move aimed ostensibly at addressing income “inequality” and generating additional revenue for government spending initiatives, President Biden recently proposed an increase in the capital gains tax as well as the Net Investment Income Tax (NIIT). This proposal is part of a broader economic strategy to ensure that America’s economic contributors pay an even higher share of their already disproportionate tax burden.

Massive Capital Gains Tax Increase*

Currently, long-term capital gains—profits from the sale of assets held for more than a year—are taxed at a maximum rate of 20%. President Biden’s proposal seeks to raise this rate to 39.6% for individuals earning over $1 million annually. This change aligns the capital gains tax rate with the top marginal income tax rate, under the misguided notion that gains should be taxed similarly to wages and salaries.

Critics note that the capital gains tax unfairly taxes assets that have merely increased in value due to inflation, rather than actual economic gains. For example, if an individual purchases a piece of property or a stock and holds it for many years, the nominal increase in its value might largely reflect inflation rather than a true increase in purchasing power. As a result, when the asset is sold, the capital gains tax is applied to the entire nominal gain, effectively taxing inflation.

This issue underscores a fundamental challenge with the capital gains tax: it does not differentiate between real gains and inflationary gains. Consequently, taxpayers can end up paying taxes on increases in asset value that do not actually represent an improvement in their economic situation. Indexing capital gains to inflation could address this problem.

Medicare Income Tax Increase*

In addition to the capital gains tax increase, President Biden proposes to raise the Medicare Income Tax (which currently stands at 3.8%) to 5.0% for anyone earning at least $400,000. Further, the president proposes an expansion of the Net Investment Income tax to cover active income from S-corporations and other pass-through entities that are currently not subject to NIIT.

Economic and Political Implications

Economically, the Biden administration argues that these tax changes will promote greater fiscal responsibility and reduce the deficit without hindering economic growth. By focusing on high-income earners, the proposal aims to redistribute wealth more effectively and fund initiatives that benefit a broader segment of the population, such as expanded child care, elder care, and infrastructure improvements.

However, opposition is strong among Republicans and some business groups, who contend that higher taxes on investments could discourage capital formation, reduce economic growth, and negatively impact the financial markets. They argue that the proposal could lead to decreased investment, job losses, and slower economic recovery, particularly in a post-pandemic landscape.

Source: https://www.forbes.com/sites/robertwood/2024/04/29/president-biden-has-proposed-tax-increases-here-are-six-of-them/?sh=681f444e168c

Source: Zumper National Rent Report and Brian Holt at https://thelogangroupnc.com/

Gen Z Is Paying More To Rent Than Millennials Did at Same Age, Study Shows

KEY TAKEAWAYS

• Gen Zers will pay about $145,000 on rent by the time they’re 30, $18,000 more than the adjusted cost for Millennials at the same age.
• However, homeownership is slightly less expensive for Gen Z than for Millennials.
• Housing costs have ballooned since the pandemic, and high interest rates will play a factor in renting and buying moving forward.

Renting is more costly for members of Generation Z than for their predecessors, but buying a home may be more affordable, according to a new study.

Members of Generation Z, defined by this study as those born between 1994 and 2000, will spend $144,557 on rent by the time they’re 30, according to a survey from RentCafe, a rental market research site. That’s about $18,000 more than the adjusted costs for Millennials, who were born starting in 1981, when they were the same age.

However, it’s not all bad for Gen Z, as the study showed they would face lower costs for home ownership, totaling $165,206, about $7,000 less than what Millenials paid to own a home. Gen Z is also expected to do better on pay than their Millennial predecessors, earning 14% more on average by age 30.

“The good news for Gen Z is that the gap between renting and owning is smaller than it was for Millennials while incomes are higher,” the report found. 

Inflation has pushed up costs for both renting and buying housing since the economy has rebounded from the pandemic. Stubborn inflation has been blamed on housing costs, which economists believe have already come down some and will be reflected in official data in the coming months.

The RentCafe study found California was the worst state for rental affordability for either generation, led by San Jose and San Francisco. Meanwhile, Ann Arbor, Mich., and Bloomington, Ind. were among the cities where homeownership costs were lowest.

Source: https://www.investopedia.com/gen-z-is-paying-more-to-rent-than-millennials-did-at-same-age-8623683