columbus ohio vs dfw/ san antonio

16 Replies

I am looking to get into multi-family homes by starting off with some duplexes. I finally narrowed my MFH market to Columbus or San Antonio / Dallas- Fort worth area. I am so torn between these areas and hoping I can get some insight from other investors here.

I’m sure there are great submarkets in all of them. Why limit yourself to one? Go with all 3 and start looking at actual deals in all of them, then buy the deal that works for you first. I recently added a new market and that’s how I did it, got on mls feeds for the 3 I liked, looked at actual deals. One really didn’t inventory of the stock I buy. The other two do, so we’ll see which one of those I actually buy in first. 

Originally posted by @Lee Ripma :

I’m sure there are great submarkets in all of them. Why limit yourself to one? Go with all 3 and start looking at actual deals in all of them, then buy the deal that works for you first. I recently added a new market and that’s how I did it, got on mls feeds for the 3 I liked, looked at actual deals. One really didn’t inventory of the stock I buy. The other two do, so we’ll see which one of those I actually buy in first. 

 thats a great idea. I was weary about Texas because of the high property taxes, but as long as the numbers work, I have nothing to worry about.

Originally posted by @Joseph Vu :

I am looking to get into multi-family homes by starting off with some duplexes. I finally narrowed my MFH market to Columbus or San Antonio / Dallas- Fort worth area. I am so torn between these areas and hoping I can get some insight from other investors here.

That's great Joseph, I'm here in Columbus. I'd be happy to answer any questions that you might have!  

Originally posted by @Joseph Vu :

I am looking to get into multi-family homes by starting off with some duplexes. I finally narrowed my MFH market to Columbus or San Antonio / Dallas- Fort worth area. I am so torn between these areas and hoping I can get some insight from other investors here.

I started purchasing small multifamily in Columbus, Ohio a little over 3 years ago and have done extremely well. The cost of entry is low while the cash flow is high. Columbus is the only Ohio market that has seen a rapid growth in jobs and population.

@Joseph Vu Dallas/Ft. Worth area has the strongest job market in the country. Plus, a very diverse job market by industry. The largest employer by industry segment only accounts for 13% of the jobs here. Plenty of jobs ensures that this will be a strong rental market versus other areas. 2007 crash, recession, and the pandemic hasn't slowed down the demand for rentals here. Average days on market for a rental is 17 days and its trending downward. So I would recommend DFW area. Its where I have invested for many years. 

Having owned rentals in both Ohio and Texas, I can tell you they are very different markets. If you are just looking for cashflow. Columbus may be your bet. DFW is a more diversified employment base. Making it weather down markets better. Honestly, COVID was kind of a non-event for real estate here. My firm had more tenant defaults in 2019 than 2020. If you watch any news at all, DFW is a clear winner for corporations relocating to more business friendly states. San Antonio is a good market. @Brad Larsen can speak better for that area.

@Joseph Vu being an out of state investor myself I feel that the best thing to consider is do you have a trustworthy network.  Meaning, your investments will be managed by others, your tenants will be screened by others, the properties will be found by others, and sometimes your need repairs....done by others.  All of those things need really trustworth people involved.  So if you already have people located in a city...that is a good starting point.  But if you don't then interview people (like the ones that have commented here) and see if you have some good people that will be on your side.  An extra $100 in cash flow can be easily wiped out by some taking advantage of you for thousands of dollars.  Work with people that you trust.

San Antonio is a hot area right now, lots of new investors looking into buying property here. 

I went with a place in New Braunfels just north of San Antonio and I am looking to invest in the San Antonio area.   I kinda just jumped into that area.  I had been wanting to invest in the Austin area but got priced out.  It is also close to my kiddo so when I visit her I can double dip and do real estate stuff also, so it made since for me.  

You'll likely find much better cash-flow in Ohio than the major Texas markets. Lower priced properties in DFW and San Antonio area are going up in price quickly and it's definitely eating into any COC return for investors buying single family right now. Most of the investors we're working with are buying with a 1031 exchange and buying for security. We have so many people moving to San Antonio that there is high rental demand, low vacancy rates, and a market that should do much better in a downturn than others.

As others have said, property taxes eat into cash flow.  

The biggest thing as an out of state investor is having people you can trust.  Most people have negative outcomes because of the people they worked with.  There are great people and not so great people in every market. 

@Joseph Vu it's all based on your investment goals. Do you care about appreciation or cash flow. To me in San Antonio you can have both although the cash flow returns will not be as great in the first couple of years but if this is a long term investment San Antonio is the way to go.