Red Vs. Blue States real estate investing

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Red Vs. Blue States real estate investing

Logan M.
Investor 路 Provo, UT 路 Member since 2016 路 759 posts 路 626 votes

You have to take this post with a grain of salt but I have a lot of people that ask me where I buy and where I don't buy.


For the most part, I invest in Red states, meaning states that tend to vote for Republican candidates but let me add a few layers to this:

1. Demographics are more important than any other factor at a macro level.

2. Some Red states like Mississippi have terrible trends when it comes to housing and an incredible amount of poverty. I avoid states like this.

3. Some states have bad weather, being a MHP investor I avoid Florida, Texas, and Louisiana. I have lived in Texas and Louisiana. 

4. The ideal climate is dry with few weather extremes.

5. If you invest in areas utilizing government funding Blue states will outperform Red states because they typically have more funding for low-income housing available.

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Scott TrenchPro Member
Rental Property Investor 路 Denver, CO 路 Member since 2014 路 2k+ posts 路 6k+ votes
2y

I don't think ownership has anything to do with forum moderation.

I'm following the thread and watching. 

My stance, again having nothing to do with ownership, is that politics and real estate are intertwined. BiggerPockets is not a place to discuss the merits of one political party or school of thought over the other. But, it is a place where certain discussion about how political policy has and potentially will impact real estate prices, values, and investor returns. 

Discussion like this is something to watch closely. 

If we devolve into discussing the shortcomings of US presidents or specific politicians, probably time to close the thread. 

If we devolve into name calling, and inferring that one political party or group are morons, probably time to close the thread. 

But, if we can stick to how political policy impacts real estate outcomes, we can have a good discussion. Examples: 

- It's worth noting that rent control often accompanies a slowdown in construction, repositioning projects, and otherwise throttles supply. This has implications for investors. 

- It's worth noting that certain states have foreclosure laws that make it easier or harder to take possession of a property. This has implications for investors. Good? Bad? States where it is hard to foreclose can change risk profile on loans, but also limit competition. 

- It's worth noting that states, both red and blue, are starting to pass statewide laws that effectively rezone land across the state allowing ADUs, or allowing multifamily construction. This has consequences - both in terms of making projects accessible and profitable to savvy investors, and in inviting more supply, which may slow rent growth over time. 

These are discussions worth having. 

I think we can even go so far as to allow people to respectfully say whether they agree or disagree with a policy. But, when we get into the all-too-frequent world where community members directly or indirectly insult people or parties, we're over the line. We won't go there on BiggerPockets.

I think that with this prompting, the thread can stay up. But, if it devolves, as sometimes happens, into ridicule of one political party or school of thought, then it will be time to close it down.

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  • Jordan MoorheadBusiness Member
    Real Estate Agent 路 Austin, TX 路 Member since 2015 路 5k+ posts 路 3k+ votes
    2y

    @Logan M. I'll take the Texas parks!

    [email protected]512-888-9122
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  • Logan M.
    OP
    Investor 路 Provo, UT 路 Member since 2016 路 759 posts 路 626 votes
    2y
    Quote from @Jordan Moorhead:

    @Logan M. I'll take the Texas parks!


     Hahaha I will send them your way!

    1Reply
  • Jordan MoorheadBusiness Member
    Real Estate Agent 路 Austin, TX 路 Member since 2015 路 5k+ posts 路 3k+ votes
    2y
    Quote from @Logan M.:
    Quote from @Jordan Moorhead:

    @Logan M. I'll take the Texas parks!


     Hahaha I will send them your way!


     Thank you!

    [email protected]512-888-9122
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    0Reply
  • Samuel CoronadoPro Member
    Investor 路 Huntsville, AL 路 Member since 2016 路 334 posts 路 181 votes
    2y

    On point number 5- 

    I was just talking to a friend about that who invited me to be on the board of directors for an affordable housing nonprofit. She's based out of New Hampshire and called it the "Alabama of the Northeast," but with way less social programs. Now, there's not the most social programs in Alabama as is due to the conservative nature (minus the hubs of dying cities like Montgomery and Birmingham), so that was a big statement. lol. I've never had it be a factor in my investing plan, but people in NC (a more purple state) swear by it. Entire kingdoms are built on Section 8. I'm not sure how I feel about it. I'm not a fan of expanding government power in some nebulous hope it will allow my properties to keep cashflowing. It needs to come from the free markets. 

    1Reply
  • Adam M.
    Investor 路 Texas (DFW & West Texas) 路 Member since 2023 路 86 posts 路 55 votes
    2y

    West Texas is dry sir!

    Ha, where did you live when you were in TX out of curiosity? That being said, I can't defend Houston and the like... every time I'm down there I'm in awe of the residents. Humidity central! 

    2Reply
  • James Wise
    Real Estate Broker 路 Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH 路 Member since 2013 路 30k+ posts 路 20k+ votes
    2y
    Quote from @Logan M.:

    You have to take this post with a grain of salt but I have a lot of people that ask me where I buy and where I don't buy.


    For the most part, I invest in Red states, meaning states that tend to vote for Republican candidates but let me add a few layers to this:

    1. Demographics are more important than any other factor at a macro level.

    2. Some Red states like Mississippi have terrible trends when it comes to housing and an incredible amount of poverty. I avoid states like this.

    3. Some states have bad weather, being a MHP investor I avoid Florida, Texas, and Louisiana. I have lived in Texas and Louisiana. 

    4. The ideal climate is dry with few weather extremes.

    5. If you invest in areas utilizing government funding Blue states will outperform Red states because they typically have more funding for low-income housing available.

     Is BP letting us talk politics now that there is new ownership and a lot of rules seem to have changed?

    Or are they gonna delete this thread because of their old rules that ignore just how intertwined politics and real estate are?

    0Reply
  • Scott TrenchPro Member
    Rental Property Investor 路 Denver, CO 路 Member since 2014 路 2k+ posts 路 6k+ votes
    2y

    I don't think ownership has anything to do with forum moderation.

    I'm following the thread and watching. 

    My stance, again having nothing to do with ownership, is that politics and real estate are intertwined. BiggerPockets is not a place to discuss the merits of one political party or school of thought over the other. But, it is a place where certain discussion about how political policy has and potentially will impact real estate prices, values, and investor returns. 

    Discussion like this is something to watch closely. 

    If we devolve into discussing the shortcomings of US presidents or specific politicians, probably time to close the thread. 

    If we devolve into name calling, and inferring that one political party or group are morons, probably time to close the thread. 

    But, if we can stick to how political policy impacts real estate outcomes, we can have a good discussion. Examples: 

    - It's worth noting that rent control often accompanies a slowdown in construction, repositioning projects, and otherwise throttles supply. This has implications for investors. 

    - It's worth noting that certain states have foreclosure laws that make it easier or harder to take possession of a property. This has implications for investors. Good? Bad? States where it is hard to foreclose can change risk profile on loans, but also limit competition. 

    - It's worth noting that states, both red and blue, are starting to pass statewide laws that effectively rezone land across the state allowing ADUs, or allowing multifamily construction. This has consequences - both in terms of making projects accessible and profitable to savvy investors, and in inviting more supply, which may slow rent growth over time. 

    These are discussions worth having. 

    I think we can even go so far as to allow people to respectfully say whether they agree or disagree with a policy. But, when we get into the all-too-frequent world where community members directly or indirectly insult people or parties, we're over the line. We won't go there on BiggerPockets.

    I think that with this prompting, the thread can stay up. But, if it devolves, as sometimes happens, into ridicule of one political party or school of thought, then it will be time to close it down.

    Podcast Guest on Show #223
    BiggerPockets
    26Reply
  • Will BarnardPro Member
    Moderator
    Developer 路 Santa Clarita, CA 路 Member since 2008 路 15k+ posts 路 10k+ votes
    2y

    I concur with @Scott Trench above. Politics and bashing thereof has no place but healthy and pertinent discussions like the one above seem fine to me. Political policy that affects real estate and the investors that buy and sell it should absolutely be talking about the positive and negative effects of said policy's to help make better decisions moving forward. 

    As an example, people often bash CA and when it comes to landlord tenant laws, RIGHTFULLY so as CA laws swing way to the tenant's side as if all landlords are billionaires with money to just hand out to any freeloader. So long as people stay on topic of the impacts of these laws, I see only positive coming from discussing it.

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    5Reply
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire 路 Northeast, TN 路 Member since 2015 路 10k+ posts 路 16k+ votes
    2y

    It's really not too complicated. If you accuse personalities, parties or ideologies it's probably getting shut down - i e. "Your guy sucks, my guy is great". If you discuss policies it's A-OK. There's no way to discuss investing without acknowledging the role government plays in that arena. That said, policies are different than personalities. Keep to policies and everything will be fine.

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  • Glen Wiley
    Investor 路 Richmond, VA 路 Member since 2023 路 459 posts 路 474 votes
    2y

    I don't care about the politics where I invest but I DO care about the laws and regulations in place and the trends projected for them.

    I have really enjoyed operating in Virginia due to it's relatively landlord favored laws.

    I weigh investment returns more heavily than #3 and #4.

    I avoid low income housing due to the nature of the business, I feel things are simpler and less drama by operating entry level housing (SFH) that is not focused on government subsidies.

    5Reply
  • Steve K.
    Realtor 路 Boulder, CO 路 Member since 2016 路 3k+ posts 路 5k+ votes
    2y

    Colorado is a solidly blue state now, used to be purplish, but we're still better than every other state in every way (most consistent appreciation, increasing rents, population growth, recreation opportunities, moderate climate, recession-proof jobs in diverse industries, desirability, affordability, landlord friendly laws, the list goes on...). We just don't talk about it because we don't want any more Texans or Californians finding out and moving here!  

    7Reply
  • Glen Wiley
    Investor 路 Richmond, VA 路 Member since 2023 路 459 posts 路 474 votes
    2y
    Quote from @Steve K.:

     We just don't talk about it because we don't want any more Texans or Californians finding out and moving here!  


    Now look what you did! If people flock to the Colorado and you ever run for office in Colorado this post will come back to haunt you ;)

    2Reply
  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker 路 Canton, GA 路 Member since 2010 路 15k+ posts 路 11k+ votes
    2y

    I can tell you what I see on the NNN commercial side nationally when buying for myself and searching for clients.

    Cold belt states tend to be least desirable, followed by mid belt, followed by warm belt most desirable. Alot of net migration moving to warm belt states especially retirees. Property taxes with the exception of no income tax states tend to be way, way higher in cold belt states.

    For development the entitlement process tends to be longer in cold belt states. An example is a retail center developer I know that the time it took in 2 plus years to do one center in Colorado they built 3 in Texas. 

    Certain states have an ideology that it is a privilege for you to be there as a business and you should pay for all their shortcomings with the government. Pro-business states tend to give incentives for hyper business growth and want to make the process as easy as possible. They feel long term growth and quality of the area better in the long term helping instead of hindering businesses. 

    Coastline properties tend to be less desirable due to flood plain, lots of severe storms, and high property insurance costs. With median sea level rising even areas with waterways not considered flood plain could flood and if owners do not have flood insurance they could be SOL.

    Lots of cold belt states areas are overbuilt since net migration they have had populations move away. This leads to lots of old buildings not being repurposed with blight that typically leads to high crime takeovers for an area. I explain it as rocks falling in small ponds that barely ripple versus warm belt states where giant boulders drop in the lake causing massive ripples (growth) throughout the states. No state is perfect you just have to decide on the pecking order what you see as important today and into the future with your investment dollars. Now there are isolated affluent areas with hyper growth in cold to mid belt states you just have to be more careful analyzing those areas for investment potential. In warm belt states there still are bad areas. The economic development department is key. A bad one can crush an area and a good one can help it flourish.   

    A NN lease roof an structure in a cold belt state landlord obligations can be way different for a landlord than a NN in a warm belt state where you typically are not encountering lots of snow, ice, etc. that wears down roof and parking lot faster. You have to build that into your cap rate on the purchase.

    In general large governments tend to be inefficient with money. 30 plus trillion in debt with little of anything to show for it. I personally like small controlled necessary government for vital services that are needed and minimal but importation regulation on the private sector side. I feel too much power either way the abusers will take over the system and the results will not be good for the American public at large. I like to invest in areas with less constricting government regulation that are affluent and pro-business. 

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    2Reply
  • James Wise
    Real Estate Broker 路 Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH 路 Member since 2013 路 30k+ posts 路 20k+ votes
    2y
    Quote from @Scott Trench:

    I don't think ownership has anything to do with forum moderation.

    I'm following the thread and watching. 

    My stance, again having nothing to do with ownership, is that politics and real estate are intertwined. BiggerPockets is not a place to discuss the merits of one political party or school of thought over the other. But, it is a place where certain discussion about how political policy has and potentially will impact real estate prices, values, and investor returns. 

    Discussion like this is something to watch closely. 

    If we devolve into discussing the shortcomings of US presidents or specific politicians, probably time to close the thread. 

    If we devolve into name calling, and inferring that one political party or group are morons, probably time to close the thread. 

    But, if we can stick to how political policy impacts real estate outcomes, we can have a good discussion. Examples: 

    - It's worth noting that rent control often accompanies a slowdown in construction, repositioning projects, and otherwise throttles supply. This has implications for investors. 

    - It's worth noting that certain states have foreclosure laws that make it easier or harder to take possession of a property. This has implications for investors. Good? Bad? States where it is hard to foreclose can change risk profile on loans, but also limit competition. 

    - It's worth noting that states, both red and blue, are starting to pass statewide laws that effectively rezone land across the state allowing ADUs, or allowing multifamily construction. This has consequences - both in terms of making projects accessible and profitable to savvy investors, and in inviting more supply, which may slow rent growth over time. 

    These are discussions worth having. 

    I think we can even go so far as to allow people to respectfully say whether they agree or disagree with a policy. But, when we get into the all-too-frequent world where community members directly or indirectly insult people or parties, we're over the line. We won't go there on BiggerPockets.

    I think that with this prompting, the thread can stay up. But, if it devolves, as sometimes happens, into ridicule of one political party or school of thought, then it will be time to close it down.


    2Reply
  • Logan M.
    OP
    Investor 路 Provo, UT 路 Member since 2016 路 759 posts 路 626 votes
    2y

    @Samuel Coronado exactly and what happens when they change the program or reduce the assistance, you're completely at their mercy.

    2Reply
  • Logan M.
    OP
    Investor 路 Provo, UT 路 Member since 2016 路 759 posts 路 626 votes
    2y

    @Adam M. If lived all over Dumas, San Angelo, Hondo, Odessa, Houston area (Sugarland area and around Fort Hood.

    The only part of Texas I haven't been to is down South by the border line McAllen Texas.

    I think the issue with investing in West Texas is that there is not much of a shortage of land and the population is not very dense so that brings another set of concerns for me.

    I'm much more aligned with a lot of Texas' economic policies but I'm not as bullish as some others on the next few decades there.

    Also, it is sooo hot 馃敟 the hottest I've ever been in my life has been Texas and I lived in Honduras for two years so I think I have a good point of reference.

    1Reply
  • Logan M.
    OP
    Investor 路 Provo, UT 路 Member since 2016 路 759 posts 路 626 votes
    2y

    @James Wise they go hand and hand. All we have to do is compare states and their response to Landlords during COVID.

    1Reply
  • Logan M.
    OP
    Investor 路 Provo, UT 路 Member since 2016 路 759 posts 路 626 votes
    2y

    @Scott Trench thank you for your response on this post, I think it provides a lot of great points.

    I grew up in California and there is a lot I love about the state but I'm terrified to own real estate there.

    My parents will be selling there home soon and I've thought about buying it since it's my childhood home but I'm nervous about collecting rents etc.

    0Reply
  • Logan M.
    OP
    Investor 路 Provo, UT 路 Member since 2016 路 759 posts 路 626 votes
    2y

    @Steve K.

    My wife is from Colorado Springs and we visit once our twice a year, beautiful place.

    I see a lot of what's happening in Utah similar to Colorado a decade ago. We are having major affordability issues but there are a lot of similarities.

    2Reply
  • Bud Gaffney
    Rental Property Investor 路 Boston, MA 路 Member since 2019 路 2k+ posts 路 1k+ votes
    2y

    I like Massachusetts : ) 

    0Reply
  • Logan M.
    OP
    Investor 路 Provo, UT 路 Member since 2016 路 759 posts 路 626 votes
    2y

    @Joel Owens great reply, thanks!

    0Reply
  • Logan M.
    OP
    Investor 路 Provo, UT 路 Member since 2016 路 759 posts 路 626 votes
    2y

    @Bud Gaffney do you feel like the relationship between Landlords and Tenants is fair?

    0Reply
  • John MorganPro Member
    Rental Property Investor 路 Grand Prairie, TX 路 Member since 2018 路 2k+ posts 路 2k+ votes
    2y

    Avoid blue states at all cost. An eviction will crush you.

    1Reply
  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer 路 Redding, CA 路 Member since 2009 路 7k+ posts 路 4k+ votes
    2y

    I used to build spec new construction in CA. However; with all the regulations, permitting time and fees, materials costs due to high fuel prices, taxes, coupled with workman's comp insurance, etc. , the high insurance for homes, etc., it's no longer possible. 

    I'm focusing on real estate now, but there again, with the high costs of everything in CA, along with interest rates, the market where I am is extremely challenging. There's so much demand, but little availability of properties to sell. We have had major wild fires, which destroyed thousands of homes. Add to that the pressure put on our housing by the Covid refugees relocating here, and now those fleeing larger cities for smaller ones due to crime. We also have a local ministry school that draws a few thousand students of various ages, from around the world; and no dorms, so investors have bought up much of the housing for renting room space, in addition to the airbnb properties! It's DEMANDNG to say the least. We are tapped out for housing, with no hope of building new supply anytime soon. The ADU regulations don't help, as it's too expensive to build

    The political policies in CA and elsewhere do have a direct impact on housing, affecting prices, landlords ability to remove tenants, etc. People used to threaten to sell their places and move out of CA, but now, every day we have clients doing just that! 

    0Reply
  • Steve K.
    Realtor 路 Boulder, CO 路 Member since 2016 路 3k+ posts 路 5k+ votes
    2y
    Quote from @John Morgan:

    Avoid blue states at all cost. An eviction will crush you.


     My last one took 3 weeks and cost $320 so it definitely didn't crush me. Colorado, blue state. Ranked 11 spots ahead of Texas in Most Landlord Friendly States of 2024: https://www.doorloop.com/blog/landlord-friendly-states  Sorry buddy! 

    1Reply
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