TOP 10 Income Tax-Free Cities for CRE Investors


CRE investors with proper skills can use the market opportunities to their benefit. However, with this comes the tax responsibility, which they need to abide by.

But what if there was a way to decrease the tax burden, like by using the 1031 exchange? In addition to this, there are different states where you can invest without any worry about paying the income tax.

There are a total of 10 states where the income tax was not applicable. However, you repealed Tennessee’s Hall income tax. Therefore, the income tax as of 1st Jan 2021 does not exist any longer.

Although there are more options, they did not make it to the list as they didn’t fit the criteria for being a solid rental investment based on decreasing rental rates, weak job numbers, and high property taxes.

As per the studies and reports, by 2022 multifamily housing will start to begin to stagnate and will stay at its current level. However, single-family housing will slide as the demand after the pandemic to live in the sunburned areas will increase.

Top income-tax-free cities for CRE Investors

According the cities that are most likely to succeed in the economic recovery plan, the list provided here is according to the cities that are most likely to succeed in the economic recovery plan. As a result, they will present opportunities to prospective CRE investors.

1.  Austin, Texas

Texas is about everything big, including the personal income tax disdain where the state’s constitution forbids it. One of the most significant factors that drive investment in the Austin market is the increase in Hi-Tech employment from the companies like Oracle, Tesla, Apple, etc. This has increased the number of people shifting to Austin quickly and establishing in the Silicon Valley.

The rentals in Texas include 61% of the occupied housing. Therefore, investing in Silicon Valley is highly appealing. Further, Austin also has led to the innovator of green construction. This makes the commercial real estate investment outlook tremendous for 2021.

2. Dallas, Texas

Dallas has become a desirable location for those who wish to call the Lone Star State home. It is yet another magnet city that boosts the quality of life. Dallas accounts for a 1.9 % annual growth in population.

The industries located in Dallas are highly diverse, including the headquarters and operation centers of the companies. The sector with the highest growth includes financial services, construction, and business.

The value of the home project is expected to see a significant boost of 11.1 % over the next year. It is the job market, great housing prices, and driving population growth, creating a great opportunity for the renters market.

In addition, the hard money lenders in the Dallas market can rejoice as the city ranks for great commercial development potential, which will cite the property supply and construction costs.

3. Tampa, Florida

The city accounts for 3.1 million residents. It is expected that by 2024 the city’s annual growth will reach 3.3%. However, Tampa has a heated market which is delaying the potential of the buyers to homeownership.

The developmental projects were placed on hold during the pandemic. However, it will eventually begin to get in demand as the vaccination rate increases.

Florida is expected to see an average increase of 585,113 people migrating, making Sunshine Estate the primary residence. As a result, the city currently accounts for a great real estate opportunity that, when used correctly, will offer great benefits. You can find hard money lenders in Tampa.

4. Orlando, Florida

The city season a high rate of visitors throughout the year, which is nearly about 70 million. It is Universal Orlando and Disney World, which increases the number of visitors in the city. It is estimated that there will be a significant increase in visitors by 1500 people per week as the population will reach about 5.2 billion by 2030. 

Orlando shows a fast sign of pandemic recovery in manufacturing and financial services. The rent decreased by 3% the last year. However, it got back by a 3% increase in February 2021.

5. San Antonio, Texas

The city specializes in military and defense, manufacturing oil and gas sector, health care, and job growth. It is currently expected to be one of the fastest-growing counties in Texas.

San Antonio presents an attractive market for real estate investment as in the city, renter-occupied households account for about 39 % of the total population. 

As of now, San Antonio is showing a reliable upward trade. It is affordability that has made San Antonio a preferable commercial market that provides CRE investors more money with lower property taxes and the cost of construction.

6. Nashville, Tennessee

The city has seen a steady increase in inbound state immigration for over five years. As a result, there is a great demand for single-family rental properties offering the real estate investor the potential to grow. However, there was a 2% decrease in the rent last year one can expect to see great changes in the coming time.

Nashville, in the last ten years, leads to 26% job growth. In fact, during the pandemic, the city cited only 5.2 % unemployment which is expected to improve in 2021.

7. Jacksonville, Florida

The city averages a 3.5% increase in rent every year with a 37% owner-occupied house rate. As a result, the center market here offers a solid investment for CRE investors who wishes for a healthy combination of equity growth and cash flow.

The city accounts for 13,019 graduates every year, which makes it safe to say that it is manufacturing and technology in Jacksonville, which has made it the top economic driver. In addition to this, Jacksonville port supports 31 economic output, which positively impacts the job sector.

8. Seattle, Washington

Almost every Tech giant reigns in the city, Expedia, Amazon, Microsoft, etc., everyone has their offices in Seattle, which contributes to the high employment rate in the city. Moreover, the wage growth percentage currently is of 5.4 % increase which surely has made the economic standpoint in the list formidable. 

Washington accounts for the highest median rates available for one-bedroom, one-bathroom apartments. This showcases no sign of slowing down, with the average price increasing 4.39 percent in 2020. Microsoft has helped bring back employment to the office. For sure investing in the market will be in the swing for the remainder of 2021.

9. Tacoma, Washington

In 2020 there was a point wherein the homes in Tacoma were selling faster. There are almost no empty apartments currently in the city. About 45% of the households there are renter-occupied, leading to the open doors for prospective CRE investors with some limitations. This thus makes it the leading spot for investing and benefitting from the current market demand. 

10. Houston, Texas

Heston accounts for 2.3 million residents, with an impressive 7 million residents in the metropolitan area. It is expected that the population here will increase by 1.52 % over the year. It is the post-pandemic job sector and insurance levels which have made an economic surge in the job growth in the city.

The employment growth increased by over 3.1 % in the metro areas. In contrast, a 2.6% increase over the years was noted in the rent and home sales. Thus, the market leads to skyrocketing single-family home prices. When the purchase price is not optional, people rent out properties making it a robust rental market. To invest in commercial real estate, you can apply to one of the best hard money lenders in Houston


There are great opportunities one can get from real estate investing. However, it is essential to understand the outcomes and opportunities available in different states to guarantee you invest in the right place.

If you are looking for a great opportunity for your investment, it will be beneficial to consider professional help. This will ensure you invest in the right place and get great results. Private Capital Investors can offer you the best assistance.

We have an expert team who will instruct you about the available opportunities to ensure you make your investment in the right place. Thus, it will guarantee better returns. If you have decided to invest in the real estate sector, contact the professional for better assistance.

Want to learn more? Get in touch with us today.

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