‘Big Short’ Investor Reveals 3 States He’s Buying Real Estate

By: Julia Mehalko | Published: Mar 11, 2024

Kyle Bass, the billionaire investor who predicted the 2008 housing crash as made famous in the book “The Big Short,” has recently revealed the three states he’s keeping an eye on and buying real estate in.

According to Bass, these three states are the best places to invest in real estate. He’s come to this conclusion for a variety of reasons — though, low taxes and lower costs of living are two major factors.

Kyle Bass’ 3 States for Buying Real Estate

Bass joined Clay Fink on “The Investor’s Podcast” and talked about real estate in the United States. Bass accurately bet against the housing market before the 2008 crisis, predicting that it would occur.

An aerial view of a suburban neighborhood with homes and yards.

Source: Blake Wheeler/Unsplash

Now, Bass is opening up about the states that he feels have the most opportunity for investment. These three states are Texas, Florida, and Tennessee.


Bass Looks at Affordability

According to Bass, those looking for beneficial opportunities in the property market need to look at affordability. He says finding states that have affordability is essential.

A street with three houses in the daytime underneath a clear blue sky.

Source: Dillon Kydd/Unsplash

“You have to move real companies where there’s affordability, where there’s expansive activity, where there are natural resources to accommodate those movements,” Bass said.

Lower Taxes Remain Important

Recently, there’s been a lot of talk about moving to states with lower taxes. Some studies have even proven that many Americans have moved to low-tax states in 2023. This trend will likely continue.

A Texas flag on a pole plowing in the wind in the daytime against a blue sky

Source: Pete Alexopoulos/Unsplash

Investing in real estate in lower-taxed areas is also important to Bass. He says that if you want to benefit from the property market, finding real estate in low-taxed, low-cost-of-living states is vital.

Real Estate in Low Cost of Living Areas

On a podcast, Bass touted states that are “pro-business, lower cost, lower or no tax jurisdictions.” According to him, these states — such as Texas, Florida, and Tennessee — are the best places to invest in property.

An older home in Waco, Texas, with green bushes and green trees.

Source: Daniel Lee/Unsplash

Bass also took the time to point out that investors need to look at migration trends. Right now, there’s clearly a trend of people moving from high-taxed states to low-taxed ones.

Don’t Invest in Certain U.S. States

While Bass has endorsed investing in property in three main states, he has also stated that investors should completely avoid some entire regions of the United States.

People walking on a sidewalk in front of a row of houses and cars in San Francisco, California

Source: Jakob Owens/Unsplash

According to the billionaire investor, regions like the Northeast and West Coast are bad areas for property investments. This is because these areas are “very high cost, very high tax, one could say mismanaged jurisdictions.”


More People Are Moving to Texas

Investors like Bass have clearly noticed that there’s a growing trend of Americans moving to low-taxed states like Texas. This trend has been ongoing for more than a decade, as more than 9 million people moved to Texas from 2000 to 2022.

A bird's eye view of the Austin city skyline underneath a cloudy blue sky.

Source: MJ Tangonan/Unsplash

Many people who previously lived in highly taxed states have also fled to Texas. In 2022, more than 100,000 Californians moved to Texas.


Florida Also Sees an Influx of New Residents

Texas isn’t alone in getting a ton of new residents. Florida has also seen an influx of people moving to live there from the start of the pandemic.

A view of Miami Beach’s city skyline and body of water by trees during a sunset.

Source: Denys Kostyuchenko/Unsplash

People from New York are moving to Florida, trading a highly taxed state for a lower one. As more people around the U.S. move to Florida, it doesn’t appear that this trend will slow down any time soon.


Tennessee Is the Latest Hot Spot

Though people have been moving to Florida and Texas for years now, Tennessee is the latest low-taxed state to become a haven for many. While many from states like California are moving here, they aren’t alone.

A bird's eye view of downtown Nashville in the daytime

Source: Tanner Boriack/Unsplash

Interestingly, many people from Texas and Florida are moving to Tennessee for a variety of reasons. For the most part, these new residents are choosing the state for even lower housing costs and no income tax.


Coast Cities Are Losing People

As states like Texas, Florida, and Tennessee have gained more residents in the last few years, coast cities like New York and California have seen people leave.

An aerial view of the New York City skyline during a sunset.

Source: Emiliano Bar/Unsplash

According to the U.S. Census Bureau, more than 75,000 people left California in 2023. Meanwhile, New York saw the biggest population decline in 2023, as almost 102,000 people left.


Bass Says to Look at These Trends

Bass accurately foresaw the 2008 housing crisis by looking at trends during the time. Decades ago, when he betted against the market, many of his peers were skeptical of his moves.

A home with a green front yard in a suburban neighborhood in the daytime.

Source: Ronnie George/Unsplash

Though Bass hasn’t always been right in his forecasts, he was right in 2008. Now, he’s telling property investors to keep an eye on states like Texas amid these large migration movements.


Keep an Eye on Low Taxed States

By looking at these trends, Bass says investors can stay ahead of movements in the property market. Then, they can easily exploit this trend for their own gain.

A bird's eye view of the Dallas, Texas skyline in the daytime underneath a cloudy blue sky.

Source: R K/Unsplash

“I want to be levered to that real estate. And I want to use a prudent amount of leverage,” he said.