Florida, Texas, Atlanta or Tempe, AZ and how much do property taxes matter?

[Fred Conway]

So a little about myself, I'm a younger guy, have a good amount of cash saved up and looking to invest into rental property within the next few years. My biggest problem is I'm not sure where I want to settle down and begin investing. There's great job opportunities for me in Texas (Dallas, Austin, Houston) and Atlanta, GA, I enjoy Dallas, but can't see myself investing in property here. I also enjoy Atlanta, but not sure of the rental income possibilities, along with the 7% state income tax. My ideal situation would be to own real estate near Arizona State University (where i went to school) because i know the area very well and the property tax is next to nothing.Which makes the monthly note on a home very manageable, as well as the constant stream of students coming in every year. Problem is, there aren't many good paying jobs there for what I do. I would take about a 20%-30% pay cut to move to Arizona.

So what i'm looking for I guess is how much do property taxes factor into your decision of where to own and which market do you think is best for investing in monthly rental income.

Thanks

[Bruce Edlund]

Fred,

You're correct to at least take a look at the prop. tax situation. I live in AZ but own a rental in Austin, TX. Since there is no state income tax in Texas, prop taxes are a killer. That single cost could wreck your otherwise nice cash flow. Take a close look. Some states charge higher property taxes to investors than they do to owner-occ, so I would recommend finding out about that, too. AZ is one, although the difference is not much. Rental market in the Phx area is good since so many lost their homes. You can check out rental rates in various parts of the city at www.rentrange.com

Good luck!