The United States is no stranger to boom and bust cycles. Early settlers made their way to Oregon, and mining towns in the Rust Belt boomed in the mid-20th century. Over the past decades, tech has driven similar booms, and the renaissance that began in the Silicon Valley has filtered to smaller cities that are now enjoying their own tech-fueled growth.
As states like New York and California have become less affordable, they’ve become less popular for tech employees, who find even generous salaries struggle to stretch. People are looking for cities that offer lower costs of living and a better quality of life in a world that’s becoming increasingly more remote.
Technology companies are opening new facilities and opportunities in areas outside of the Bay. On top of that, the tech industry is transitioning to remote work—and the trend goes beyond COVID-19 necessity. Regular working from home has increased 173% since 2005, according to a study by Global Workforce Analytics. As such, those in tech or with remote jobs are seeking out places with lower costs of living, better weather, and other local advantages.
Atlanta has long been considered a cultural hotspot and now has a growing reputation for its new direction with major tech companies. This vibrant city is home to major companies like Coca-Cola, Fiserv, and Cricket Wireless, and the list continues to grow.
With the addition of new tech jobs, Atlanta has begun to appeal more to millennials and is attracting younger citizens. Georgia has nearly 1% lower unemployment rates than the national average and offers abundant opportunity for new residents. As an added bonus, Atlanta boasts one of the biggest airports in the country, connecting it with the rest of the United States and the world.
Atlanta presents a major investment opportunity from an appreciation perspective.
With this influx of tech companies, the property values in Atlanta are growing quickly. The median home value according to BiggerPockets Insights is $259,000. Within the last year, Atlanta real estate has appreciated by 11.6% and appears poised to grow at a similar rate in coming years.
These prices may seem high for those coming from Sun Belt markets, but buyers coming from the West Coast and Northeast still view this as a discount in comparison to their home states. In places like Silicon Valley or Boston, bidding wars are all too common, so these transplants are driving up prices as they move. This could mean a bubble, but it could also mean further growth if this becomes the new norm.
Median rent rates are on the upswing in Atlanta, with a shift towards steady growth. The rate is currently at $1,600 in the center of Atlanta, which offers investors a great opportunity to line their pockets if they can find deals in transitioning neighborhoods. Look at building patterns in the city as well as where millennials are moving.
Another factor worth noting is that Georgia as a whole is considered a landlord-friendly state. This coupled with increasing rents makes it worth considering.
Colorado Springs, Colorado
Colorado Springs is a city with a long and rich history, often linked back to a large gold rush that brought a surplus of new residents. Now, it is a growing city near Denver with lower prices that make it highly appealing to new residents.
Its growing list of technology companies such as Food Maven and Motion Intelligence has made it more popular for millennials and tech-focused employees who are looking for an opportunity to live somewhere that offers both nature and a metropolitan feel. Add in their collection of top-ranked school districts and there are more than enough reasons to invest.
Colorado Springs has seen a sharp increase in overall property value in recent years. Over the last year alone, BiggerPockets Insights reported a 9% increase in property value and expects to see this continue to rise at a high rate over time.
With how steep this number is, it is easy to see why this is a good investment opportunity. The average single-family home value has risen significantly over the last few years, resulting in a $347,500 median home price. As millennials continue to be outpriced in Denver, pay close attention as they look south on highway 25 to Colorado Springs.
For Colorado Springs landlords, rent is steadily increasing. This is in line with the rest of the state, which has seen continuous increases throughout the years. Currently, the median rent is $1,261. This number increases in parts of the city where school districts are top-rated in the state of Colorado. With many growing families moving to the area, this shows promise.
Charlotte, North Carolina
Charlotte is a beautiful city that has seen a substantial amount of growth in recent years. Despite the fact that it does not receive a lot of recognition compared to some other cities, it is well on its way to attracting a lot of attention in tech.
In fact, Charlotte already has a wide range of different technology-based companies calling it home. Charlotte has attracted so many new residents that it officially competes with San Francisco in population. Major financial corporations like LendingTree and Bank of America are all posting for technology-based jobs, as the financial sector is moving well into the technology space.
As advancements in artificial intelligence and machine learning continue to grow, other companies will begin to add more positions to support technology careers. Charlotte’s transition in size is not simply older generations, even though North Carolina is known for its friendly and traditional culture. Millennials are also choosing Charlotte for their new place to live, a fact which is largely encouraged by their booming economy and job space. Charlotte has a low unemployment rate that makes it even more appealing for those seeking opportunities.
Despite its large size, Charlotte has a surprisingly appealing cost of living. In a place where the average income is about $32,000, a tech salary goes a long way. Unlike other major tech cities, which are consistently seeing a rise in the cost of living, Charlotte continues to reward the people that live there with affordability.
Although Charlotte saw below-average market appreciation of only 2% in 2020, this is still a potentially strong cashflow play. Investors can purchase a property in Charlotte for a median price of $253,250 and rent it on average for $1,276—in other words, a .06% rent-to-price ratio. The rental market is also strong. Rent is steadily increasing in Charlotte and is currently at an average of $1,276. This coupled with reasonable property prices makes it possible to make money month over month.
Citizens and celebrities alike are heading over to Dallas in an attempt to restart their lives in the Lone Star State. Current predictions show that the city is set to add over a million new residents in coming years, and with its growing collection of technology career options, it is easy to see why. Many people are looking to benefit from the value of a career in technology while also enjoying where they live.
Dallas has shown significant growth over the last eight years. In fact, Dallas has the highest growth rate of any major city in recent years compared to other cities in the United States. For a lot of new residents, there is one significant factor influencing this decision: Texas has no state income tax. This means that remote workers can work from Dallas and make the most of their income.
Dallas has a wide talent pool of people who are looking to advance their careers in technology. Instead of forcing these people to move away from Dallas, companies such as AT&T and Texas Instruments and emerging startups are growing their technology efforts in Dallas instead. This area has a blossoming startup culture that is appealing to workers in the industry, especially millennials. Could this Texas city become a tech hub like Austin?
Given the rapidly growing population and growing demand for housing, Dallas is in a position to benefit from appreciation. This bodes well for those who are looking to get lower interest rates with refinancing or who want to flip a property in the near future. Single-family homes have risen in sale price to $259,475. If you’re looking to rent, Dallas can provide cash flow. The median rent in Dallas is $1,466 and steadily growing.
One last note on Dallas is to pay close attention to property taxes when doing your research. Although Texas does not have a state income tax, property taxes are higher in the Lone Star State.
Tampa is known to boast beautiful weather, easy access to the ocean, and popularity with tourists. It is a picturesque city whose combination of a thriving economy and desirable weather has people rushing to move there. It is currently considered to be the ninth-fastest-growing large city in the U.S., with many younger generations rushing to a city that was once considered a place to retire.
In recent years, Tampa has begun to gather a reputation as a technology hotspot. This creative startup environment makes it highly appealing to those who want to make a career in technology. According to the Bureau of Labor Statistics, Tampa also offers a low unemployment rate compared to the national average.
Tampa brings a wide range of desirable features that are attracting new residents to the area. Some are seeking out Tampa for its beautiful weather, but others are chasing the lack of state income tax. Particularly for those who work in the freelance space, a lack of income tax can have significant benefits.
It is safe to assume that the combination of its growing job market and desirable features has led to its shocking 9.2% increase in home value over the last year. The median home value is at about $219,000 and, if growth continues at the same rate, will steadily rise in coming years.
Rent is also steadily increasing, which can benefit those who are looking to rent out a property, but also shows that this city is growing in popularity. The median rent is $1,640 and shows signs of continuing to grow year over year. An added benefit of investing in the Sunshine State is that you have the option of using your property as a vacation rental due to tourism. This can increase profits in winter months when snowbirds are willing to pay a premium to avoid the harsh cold weather.
The tech industry is the future and is driving a lot of the change in real estate across the country. Knowing how to invest in the areas that are beginning to thrive can offer significant payoffs down the line. Be sure to do your research and run the numbers to see if these areas are worth your hard-earned investment dollars.