We are looking to purchase another rental property and have been looking at different cities in TX (Dallas, Austin, San Antonio, Houston)... can anyone share their experiences on one over the other? Good and bad? Should specify: we are looking for a turn-key property.
Thanks in advance!
@Lauren Hay-Lavitt . All great cities. Your price point will be different in each of these and your CF may vary in the stronger metros.
Where is your current property and what/when did you purchase it for.
@Lauren Hay-Lavitt Tough to get a valid answer I think as the cities are so far apart in a way, that probably few investors investor in all 4 and probably few invest in 2 of the 4....
I can tell you probably all 4 are on fire....lots of investors, not enough properties, prices and rents climbing so far.
One though in DFW area is to be very very careful with TK. We don't have many providers of TK here and from what I see they will often put you in the worst parts of the city. They know what numbers many investors want to hit, so they try to hit those numbers and to do so in this market, they often will be in the toughest areas. So that can hurt your appreciation and limit your rent increases. They tend to stay away from the popular cities, because at least initially the ROI might be lower.
If you are a long term buy and hold investor, I would look at where the growth is happening....buy in the areas of high growth....as Ross Perot used to say, you want to make a billion in real estate, buy in the path of progress....and he and now his family did quite well with this idea.
Austin prices are super high, but seem to be going higher. Your rent may not match your mortgage, so minimum if not negative cash flow in many cases. So more of an appreciation play right now. Houston seems to have more weather problems, so do your best not to buy previously flooded properties, or properties that have the potential to flood in the future. That leaves SA and DFW in my opinon.
What returns metrics are you looking for? Below is the order to lowest cash flow to highest you can expect in each market.
You can find some new built homes in Conroe - north of Houston. They will have smaller cash flow, but the area is growing so much, and there's such a shortage of rentals here. You also need to lookout for the tax rates. It changes with each area of town.
@Lucia Rushton Thank you! Currently both SF homes one in Indianapolis was purchased at $127,000 and Bixby, OK purchased at $219,000.
@Bruce Lynn thank you for all this great info! We are looking for longer term, buy and hold investments. I think Austin is not in consideration now! Good to know about TK in DFW- was not aware! Do you do any STR in DFW or Houston?
@Harrison Sharp Thank you! We are looking to buy and hold, long term appreciation! Don't need a ton of cash flow right away.
@Lauren Cutchen Thank you! Will do some digging... what kind of price point would an updated SFH go for in your market?
I'm partial to Austin, but largely because I live there and all my properties are there. For an appreciation play I think it's still a very strong market (probably the strongest of those mentioned), but if you're looking for immediate turn-key cash flow you can probably strike it off the list. You can still find fairly easy cashflow in the Austin suburbs, but you'll most likely need to factor in basic repairs and paint and flooring into your calculations.
Hi Lauren, I'm not really familiar with those cities. I started my real estate journey here in Indianapolis. I had my first turnkey. Now, I have almost a hundred doors. I would love to share my experiences and chat you more if you're interested.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you