Inbound real-estate capital flows to Florida and Texas grew 18% year-over-year in 2025, according to data compiled from CoStar and brokerage exchanges. Out-of-state ownership of small multifamily (5–50 units) in Florida hit a new high of 38%.
The driver is straightforward: zero state income tax on the rental income side. For a California-based owner moving to Florida, the federal-plus-state savings on annual NOI can exceed 13% of the income line.
A 1031 exchange from a California or New York property into a Florida or Texas replacement also locks in this geographic tax arbitrage — the future income shifts to the new state's lower (or zero) rate.