i need some advice. I am about to close on a 600k 2 story 5 bedroom luxury home in south Dallas near the zoo. It’s off Marsalis ave. I main road. I have witnessed crackheads already my two times there.
This is for air bnb but if it gets banned in Dallas, which they are deciding soon, will LTR work as a backup?
I think you know the answer to this already man. "I've seen crackheads there already the two times I've been there" "in the hood". does your rehab budget account for cleaning up the entire neighborhood too or? I wouldn't purchase a B class house in a D class area. this close to closing and you're just now wondering 'hmm, what happens if they ban STR? then what?'. You should have that answered before even putting in an offer. all my snide comments aside. what are the driving factors that would attract a potential long term tenant to that property? from your question it sounds like a low class tenant you dont want, living in a luxury house. not my idea of a solid investment.
I think you know the answer to this already man. "I've seen crackheads there already the two times I've been there" "in the hood". does your rehab budget account for cleaning up the entire neighborhood too or? I wouldn't purchase a B class house in a D class area. this close to closing and you're just now wondering 'hmm, what happens if they ban STR? then what?'. You should have that answered before even putting in an offer. all my snide comments aside. what are the driving factors that would attract a potential long term tenant to that property? from your question it sounds like a low class tenant you dont want, living in a luxury house. not my idea of a solid investment.
I would take the signs that you have already been given and ask yourself if this is the right investment? Given this is a 600K 2-story home I would take into consideration how long this would take to make your money back if used as an STR or LTR with extremely conservative rates/occupancy. Also, already knowing that Dallas is going to place an ordinance in place banning STRs and your main intention is to use the home for Airbnb I would not recommend purchasing this to use as an LTR. We had the same case happen in Philadelphia where only properties that are zoned CMX-3 or above can be used as STRs and we would never recommend anyone just to buy an SFH to use as an LTR unless you have done it before and know it will work.
If you have any other questions please don't hesitate to reach out!
I don't like those. Who does it attract? I don't think you will like it as AirBnB either. Sure you will get some clients, but they'll leave you bad reviews once they get there.
If you've only seen 2, you must have super dark tint and shades on.
You will have constant issues I expect. Stuff stolen, like AC units, doors kicked in, etc if someone is not there full time.
You probably know way more about AirBnb than I do, but lately I've been looking at rates and occupancy and they both seem to be horrible this summer. VCB guy on the radio said it is probably about another year until the big conventions come back. It takes some time to plan, even though people are travelling again.
What kind of LTR rent do you think you could get? My guess would be about $3000/month at best. I don't think you get $5000-$6000, unless it is someone doing something there you don't want.
At best you would be able to break even if you turned a 600k property into a LTR, but you would need to rent out each room invidiually to make it work. $700 per room for a luxury home is not too far fetched, which would put gross rents at $3500. Your PITI is probably around $3300 with 20% down, that leaves $200 for reserves. Assuming tenants would also be paying utilities. You will probably need to self manage as most property managers will not do RBTR.
The silver lining here is that the area you described near the Zoo has a ton of potential for appreciation. IMO, the path of progress is heading towards Bishop Arts/Oak Cliff/Cedar Crest area which is where your property is. It might be the hood now but what about in 10 years?
At best you would be able to break even if you turned a 600k property into a LTR, but you would need to rent out each room invidiually to make it work. $700 per room for a luxury home is not too far fetched, which would put gross rents at $3500. Your PITI is probably around $3300 with 20% down, that leaves $200 for reserves. Assuming tenants would also be paying utilities. You will probably need to self manage as most property managers will not do RBTR.
The silver lining here is that the area you described near the Zoo has a ton of potential for appreciation. IMO, the path of progress is heading towards Bishop Arts/Oak Cliff/Cedar Crest area which is where your property is. It might be the hood now but what about in 10 years?
Yeah I am linked up with Sean Ray, a air bnb investor / realtor who has 5 air bnb properties around Dallas. He helped pick it out.
doing 15% down with 6.6% interest so I think it’s closer to 4200 for PITI. They are building a Big deck park near the zoo which should help appreciate as well.
Unfortunately you can’t get new constructions in oak cliff or west Dallas anymore that are below $300/sqft. South Dallas around the zoo and fair park are only places that the builders are right now with $220/sqft 2 story, big backyard, new constructions that are great for air bnb.