Good idea to buy investment property in Texas?

Question

I live in California, own a house here, re-financing and taking cash out, good idea to invest in a duplex (or multiple units)  in Texas? Im new at this. I appreciate any guidance. Thank you!

Amanda Chandler · Answer

I moved from California to Texas 3 years ago. There is definitely a lot of growth and opportunity in Dallas, San Antonio, Austin, or Houston. You might even have success in one of the college towns like Lubbock, College Station or Waco. One thing to be aware of is the high tax rates. A friend of mine worked in the foreclosure department for a lender here in Austin, and she said almost all the foreclosures were Californians or New Yorkers who were caught up in the low purchase prices and did not understand the taxes. The taxes can change annually too. Just something to be aware of if you do decide to look into this further!

Chris Levarek · Answer

@Maryam Noorivaziri I'd say anything in Texas (Houston, San Antonio, Austin, DFW) will be strong and competitive markets. Lot of population growth and migration from other states. Arizona, Florida and North Carolina some other seeing benefits of population growth and positive migration trends. On the contrary, California, New York and even Illinois are seeing quite a bit of negative population migration trends at least for 2019.

Always good to buy in markets with good population growth, lower than national average unemployment, strong employment job diversity, strong rental growth, etc. So Texas, Arizona, Florida, North Carolina are some good markets right now in those areas in general.

Alfred Litton · Answer

@Solomon F.  We actually haven't been involved with military much.  We have 4 sfhs in WF and are looking to branch out into other markets. Hadn't thought about Killeen before.  I live about 50 miles north of DFW, so WF is not a big stretch for us. Neither is Sherman/Denison, but we've found that to be a tougher market since the growth is so strong and prices high while selection is low.  Tyler looked interesting since it seems rather stable (medical, university, community college, county employer, etc.)

Alfred Litton · Answer

Account Closed  I have properties in WF but wondered what you thought about Tyler.  Thinking about that city as well. I've looked at Denison the past few months, and it looks "picked over." Killeen sounds interesting though!

Account Closed · Answer

@Alfred Litton Awesome, are you utilizing the military rental programs out there? Killeen is great, but there is a great amount of work to do before investing in rentals, we are currently doing new build homes and communities as well as senior living communities to make more inventory available. Tertiary markets are very delicate and you have to invest in the plan of the community, its the only way.

Account Closed · Answer

@Maryam Noorivaziri Texas is a great market and allows you to earn the best return for small multi-family housing. There is a lot of great potential in the tertiary markets around the big cities with lower risk profiles and more realistic exit strategies should anything happen. The markets I would look into are Denison TX, Killeen TX, Wichita Falls TX, and Terrell TX.

David Serna · Answer

@Christopher Campbell A very thought out description of real estate investing in San Antonio. Very accurate.

Lucia Rushton · Answer

@Maryam Noorivaziri. Such a loaded question. What do you want ? Why real estate ? I know my answer but for you- what is your why?

Then how involved to you want to be ? Out of 50 states why texas ? Again I know my why but what’s yours ?

You will get a zillion responses that could make your head spin.

Bryan Noth · Answer

@Maryam Noorivaziri I think @Lucia Rushton put it best, "such a loaded question."  You can find hours of reading on why to invest in Texas and probably hours on each of the major metroplex areas as well.  If you can narrow down:

• Why you like Texas (e.g. strong population and/or job market growth)
• Why a specific market (e.g. cash flow, appreciation, projected growth)
• And your own personal 'why' or drive to invest

Start there and work into a strategy that fits your personal preferences.  As you focus your efforts many options will naturally begin to weed themselves out.

Rick Martin · Answer

@Maryam Noorivaziri DFW, San Antonio and Austin are all great markets. Consider spreading your risk, and investing in syndications, or joint venturing with someone directly in the market. Ask yourself, do you want to be active or do you want to be passive, and most definitely start educating yourself with books and podcasts. So much great, free content out there. Search for books and podcasts on commercial multifamily. Regarding the duplex, if one of your tenant leaves you are 50% vacant, if one tenant leaves the 100 unit syndication you are invested in, you are 1% vacant. Sounds basic but it is true. Invest wisely!

Good idea to buy investment property in Texas?

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