Relocating to north Texas—should I buy this property?
Rental Property Investor · Wichita Falls, TX · Member since 2020 · 8 posts · 0 votes
Greetings all! I am active duty military relocating to Wichita Falls, Tx, just north of Dallas by an hour or so. The area seems to be thriving in the sense of growth and I'm considering buying this home and I'm unsure whether to use my VA loan or wait until I find my forever home. There are no rentals in the area so it almost seems like I'm forced to buy. I would really appreciate any feedback on whether this is a good home to invest in, initially as a home to live in for at least 3 yrs and then rent out. Help is needed and greatly appreciated.
Full disclosure: I’m a novice to the rental investment game, but the plan is to live out of the home for three yrs and then turn the property into a rental.
https://www.zillow.com/homedetails/5006-Southfork-Dr-Wichita-Falls-TX-76310/206691493_zpid/
Thanks and cheers
Freddy J
@Tiny Johnson - you're getting some good insights from the above posts. You're looking in a good area for a home to live in. I'm not sure it is the best area for rentals. I have several rentals in Wichita Falls and live here as well. I agree with @Alfred Litton, above a certain monthly rent (1,300?) the rental pool shrinks considerably. I agree with @Tim Lockhart, the rental market here is strong. There is a market for people here that are part of the NATO training at the base. They tend to pay more, and REALLY like to have a pool in the back yard. I have one property that has a pool and rent to a guy from Belgium who is involved in the NATO program at SAFB. That property has the least amount of cash flow, but his monthly rent payments are paying down my 15-year fixed loan quite nicely. Thanks for reaching out via BP and welcome to Wichita Falls, we are here to help.
Greetings all! I am active duty military relocating to Wichita Falls, Tx, just north of Dallas by an hour or so. The area seems to be thriving in the sense of growth and I'm considering buying this home and I'm unsure whether to use my VA loan or wait until I find my forever home. There are no rentals in the area so it almost seems like I'm forced to buy. I would really appreciate any feedback on whether this is a good home to invest in, initially as a home to live in for at least 3 yrs and then rent out. Help is needed and greatly appreciated.
Full disclosure: I’m a novice to the rental investment game, but the plan is to live out of the home for three yrs and then turn the property into a rental.
https://www.zillow.com/homedet... and cheers
Freddy J
What does active duty entail when you are in Wichita Falls? Are you home often or traveling?
Talk with agents in the area to see about appreciation and demand. It does seem like an area with a lot of vacancy and homes on the market. Nicer homes appreciate more and youll get more rental value in 3 years.
AS far as forever home, will you be able to cover the mortgage of your forever home and this home in 5 years? Say during vacant months?
@Tiny Johnson I've been an investor in WF rental properties for a few years now and own 4 sfhs there. What I can tell you is that the house you're looking at is a beautiful home in a very nice area and would be great to live in. BUT . . . big but . . . it won't work as a rental in that market. At $240K, you're just not going to find a renter in that market, and if you do, your ROI will be very low and turnover will be a problem for you. The best rental market in WF (best ROI, lowest turnover rate, etc.) is for homes in the $90-$120K range. You can usually rent those for $900-$1200/mo. All four of mine are in that range. The rental market in WF is simply geared for that end of the housing market and not above that. Can you rent a $240K house there. Sure. It will take you several months to find a renter, and you won't keep them long though. And you also won't make more than about $1650 or so per month. That said, a home in the $100k range may not be suitable for you and your family. If that's the case, and if you're determined to make it a rental once you leave, I wouldn't recommend looking at anything over about $140-$150K. It just won't make economic sense, and you won't keep it rented if you're much above that.
@Tiny Johnson I also moved to Wichita Falls while active duty in the AF. I was in Civil Engineering, originally from Arlington TX. We decided to stay here in Wichita Falls after retiring from the AF and have lived here since 2008. The neighborhood at Southfork Dr is close to where I bought my home. There is a very strong rental market here, and as a Realtor I've helped several active duty members buy homes they live in while here and then keep and rent out after they PCS for long-term wealth accumulation. Our housing prices are very affordable and many times the monthly payment to buy is less than if you were to rent the same home. Living in a home here for 3 years and renting out is an extremely viable business model.
@Tiny Johnson - you're getting some good insights from the above posts. You're looking in a good area for a home to live in. I'm not sure it is the best area for rentals. I have several rentals in Wichita Falls and live here as well. I agree with @Alfred Litton, above a certain monthly rent (1,300?) the rental pool shrinks considerably. I agree with @Tim Lockhart, the rental market here is strong. There is a market for people here that are part of the NATO training at the base. They tend to pay more, and REALLY like to have a pool in the back yard. I have one property that has a pool and rent to a guy from Belgium who is involved in the NATO program at SAFB. That property has the least amount of cash flow, but his monthly rent payments are paying down my 15-year fixed loan quite nicely. Thanks for reaching out via BP and welcome to Wichita Falls, we are here to help.
@John Collins when it comes to travel I will not be travel often as the base is a training base (3yrs at least)
As far as the rental and the forever home I don’t think I’d be 100% comfortable paying both mortgages unless I have tenants. I obviously have to have 8 months or so of mortgage save for vacancies, but I have truly calculated that all out yet.
@Alfred Litton great feedback. So my question to you is, and place yourself in my shoes-military only three years in WF max, would you purchase this home for your family then after the 3 years sell it? I have no intentions at this time to live in WF long term, yet I don’t see many options with rentals that suit my family’s need in that area. So buying, short of living on base, seems to be the only viable option—thoughts?
Freddy
Hi Freddy. If it were me, with only a 3-year time horizon, I would not purchase at that price point or anything in WF that I was going to sell when I move. I would purchase something a bit smaller and a bit "plainer" in the $140-$150K price point and tell myself, "Hey, it's only 3 years." That way you WOULD end up with an affordable rental when you're done. Depends on how big your family is, etc. But the one you are looking at now would be harder to sell and harder to rent. (By the way, the one you pointed out is, in my opinion, a good 15% overpriced. But, hey, that's just my opinion.] For me, with all the costs (and in TX, closing costs are ridiculous), it doesn't pay to hold real estate for less than about 5 years. Too much risk to buy something in that price range and expect to sell it in 3 years. WF doesn't appreciate that fast like other markets, so you'll likely lose money on the deal. Nope. I'd buy smaller and plainer, gut it out for 3 years and rent it then. During that time, get to know property managers, handymen, etc. in the WF area that can be of help to you when you move on and can help you manage it from a distance. If you can, buy in the area zoned for Rider HS. I've not had the pleasure of working with Tim Lockhardt, but he has an excellent reputation from what I hear about town and could steer you toward the right section of town.
One caveat, anything in the $90k-$150K range goes FAST! But you could find a decent 4bed/2bath on the upper end of that that would one day make a great rental if you look hard, have a good realtor, and act fast. If you have a family, you might need that 4/2 rather than a 3/1, and it'll rent just fine when you're done living there. Just for fun, you might check this one out:
https://www.zillow.com/homedetails/709-Royal-Rd-Wichita-Falls-TX-76308/90257895_zpid/?
Needs a bit of paint and polish, but it's the right amount of space, zoned for the right schools, and would rent well. Good price on it. Would have to see if there are any hidden problems, but it would make a good renter potentially and has square footage you might need. Or maybe this one:
https://www.zillow.com/homedetails/4115-Mcgaha-Ave-Wichita-Falls-TX-76308/78879981_zpid/
Neither of these is very pretty or fully updated, but you're buying it as a future rental, and the price and location make sense for that. If not these, something like these, but you get the idea, hopefully.