Why Texas Is The Place To Invest
Popular comedian, UFC commentator, and podcaster Joe Rogan recently made headlines when he announced he would be moving from L.A. to Texas and taking his podcast with him.
His Podcast, The Joe Rogan Experience, has consistently ranked as the #1 or #2 Podcast on Apple and YouTube, raking in $30 million/year in revenue. He recently signed a multi-year $100 million contract with Spotify for exclusive rights to his broadcast beginning sometime this month – taking a big bite out of revenue for both Apple and YouTube.
Taxes may be a big factor in his decision, but Rogan has other reasons for fleeing California.
By moving to Texas, Rogan would save roughly $13 million in taxes on his deal with Spotify. That’s because, in California, the deal would be subject to a 13.3 percent income tax rate, but in Texas, which has no individual state income tax, Rogan’s state tax bill would be ZERO.
When asked why he was moving to Texas, Rogan stated, “I just want to go somewhere in the center of the country…somewhere it’s easier to travel to both places and somewhere we have a little bit more freedom. I think that where we live right here in Los Angeles is overcrowded…”
Rogan is not alone in his sentiments.
A recent article on Yahoo! Finance put a spotlight on the mass migration happening right now from overcrowded, high-tax, regulatory-heavy states like New York to low-tax, business-friendly states like Texas that offer plenty of affordable housing in suburban and rural locations and more “freedom” as Rogan puts it.
In the same Yahoo! article, Ari Rastegar, founder of Rastegar Property Company, an Austin-based real estate investment firm, joked that “New York and California are the lands of the flee, and Texas is the land of the free.” The statistics that back up this proposition are no joke, however.
Since March, many city-dwellers who saw their incomes pinched due to the pandemic started looking for more affordable, spacious living arrangements in suburbs and small cities in states with more favorable taxes like Texas and Florida.
Many workers whose jobs were converted to work-from-home positions were no longer confined geographically and saw no need to stay in high-rent New York, L.A., and other coastal towns, when they could receive an instant 13% raise by moving to Texas or Florida with less overcrowding and where housing is more affordable.
This shift to small-town living has radically changed real estate values in the U.S.
According to Zumper, a San Francisco-based rental listing website, San Francisco asking rent dropped 3.3% from March to July, and New York asking rent dropped 2.8% from March to July, according to Zumper.
At the same time, rents are rising and inventory is dwindling in small towns. For example, in Henderson, Nevada, asking rent for a one-bedroom climbed 5.4% in July from June, and in Tulsa, Okla. one-bedroom asking rent increased 5.1% in July.
It’s not just workers fleeing New York and L.A. for Texas. Big companies are moving massive operations to the Lonestar state as well. Less burdensome corporate taxes and regulations in Texas drew huge tech companies like Tesla, Oracle, Facebook, Apple, and Google – along with their employees – to Austin, Texas.
Many independent contractors from California who saw their livelihoods killed by the gig economy destroying Assembly Bill 5 (AB5) are also relocating to Texas. Californians are fleeing not only fleeing physical fires but also the economic and political dumpster fires from business-unfriendly policies.
It’s always good to get in on the ground floor of a business about to boom.
Think Tesla, Oracle, Facebook, Apple, and Google. Besides being on the forefront of technology, these companies are now on the forefront of another movement – a profound real estate shift in this country – one that is moving away from the glitz and crowds of the big cities to a state that offers more open space, more individual and corporate freedoms and one that leaves more disposable income in the pockets of its citizens by waiving individual state income taxes.
That state is Texas and it is poised to be a hot commodity for years to come.
Ask me about the current ways you can invest in Texas today.