Which town/community in DFW, TX area has great potential for investment?

Question

Hello Friends!

im starting out in property investment. My ultimate goal is to have $10k net cash per month from my long term rentals. I'm okay to settle with at least 4k/month. I'm based in California but looking at nearby states for rental opportunities. Particularly, I found Dallas/Fort Worth area interesting due to their large number of new builds/communities. It seems like it is growing, especially north of Dallas and has relatively reasonable prices for new homes (sfr). I was looking at 3/4 bedrooms new homes at the range 200-300k$. To get to the bottom of it, I found a cute community in Princeton Dallas and I need your guys' advices to confirm if im on the right track and if this small town is indeed a great option for a starting investor and has a great potential in rental cash flow and home appreciation. Or is there another community/town/state that offers affordable housing and stable rental opportunity? I tried hard to find someone who could be unbiased and genuine to share a word of wisdom, lesson or advice. Unfortunately, struggling with that. I would appreciate your time if you could share your your insight, assessment of this area as an investment opportunity. Thank you:)

Bruce Lynn · Answer

Resales have better ROI normally. You might pay $100,000 less for a resale vs new with the same rent.

Most new home communities do not allow investors.

Many if not most of the HOAs for the new home communities are not friendly to investors. Often you will need to live in the home for a year or two before renting, have leases a minimum of 12 months, and sometimes there are limits on the number of rentals. Let's say it is 1% of the homes in the neighborhood are allowed. Your home goes vacant but there are 50 others on the waiting list. That might mean you need to sit on it 1-2-3 years before you are allowed to rent again.

Diego Alvarado · Answer

Hi Iryna,

I can see that you have big ambition. What Bruce says about new homes is accurate.

New communities CCRs needs to be reviewed so you are not stack in a property that can't be rented out.

ROI will be very los what I see in new communities is 10yrs in average, it will all depend on the time in the market.

Another thing with new communities in those growing cities is that they are not investors friendly for LTR as the rent price tends to be lower than in other market.

However there are plenty of opportunities in North Dallas, many other cities with growing population are great to invest. I would say cities around Denton or Fort Worth.

Reach out if any questions. I feel your struggle to find someone to trust from over state.

Which town/community in DFW, TX area has great potential for investment?

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