Jazz icon and Los Angeles native Roy Ayers once famously sang, “Everybody Loves The Sunshine.”
Never have truer words been said. The Sunbelt states are having their moment in the (ahem) sun, with hordes of new residents taking flight from cold or pricey Northern and coastal states like migratory birds at the first hint of autumn. Tracking their flight patterns is a valuable tool for real estate investors looking to buy a rental property in the Sunbelt to maximize cash flow.
For reference, these are the states referred to as the “Sunbelt.”
U.S. Census data showed that Southern states are driving the population shift. The South accounted for 87% of the nation’s growth in 2023, adding 1.4 million residents for a total population of 130 million, with a hefty 706,266 people added via net domestic migration. The Northeast—mainly New York and Pennsylvania—was the hardest hit by the movement, which lost 43,330 residents in 2023, down from a 216,576 decline in 2022 and a 187,054 decline in 2021.
However, the Sunbelt’s heat has not merely been fueled by its lower cost of living, balmy temperatures, and shift toward remote work. Jobs are fanning the flame, too, with three Florida cities making the top 10 hottest job markets in 2023, along with Austin and Dallas, Texas. Nashville topped the list of 2022’s hottest job markets, followed by Austin and Jacksonville, Florida.
BiggerPockets decided to investigate the numbers, scouring an extensive housing market database that ranked Sunbelt cities with over 500,000 residents for their rent-to-price ratios (RTP), a common gauge for measuring the ability to cash flow. For example, RTP ratios closer to one are best for cash flow. Given today’s market conditions and the lack of good cash flow options, the bar is set around 0.60-0.70% for ideal targets.
The Highest Rent-to-Price Ratios of Sunbelt Markets With Populations Above 500,000
| Metro Area | Population | RTP (%) |
|---|---|---|
| El… |