Moving away from Dallas considering the high property tax
Hi all - New in investment world.Is it foolish to refrain from investing in Dallas considering high property tax.
Could someone please help me weigh the pros and cons of investing in Raleigh vs Dallas.I want to buy positive cash flow generating assets and am confused between these two cities.I am looking for long term implications of the investment in either city.
Raleigh:
Cons:
Less Tech space compared to Dallas
State income Tax(5%)
I dont stay in Raleigh.But can move eventually if that is required and beneficial
Pros:
Properties in some spaces are still affordable.
Chances for appreciation considering Apple and Facebook coming to RTP.
Less property tax(1%) compared to Dallas(2.3%)
Dallas:
Cons:
High property tax
Highly inflated costs in Irving and places near to downtown.These are the places suitable for cash flow.Would appreciate any inputs on places good for rentals.
Pros:
No state income tax
My job is present in Dallas now.I can move to raleigh if that is more profitable.
#2 Real Estate Agent Contributor
- Real Estate Broker
- Coppell, TX
- 3,875
- Votes |
- 4,515
- Posts
#2 Real Estate Agent Contributor
- Real Estate Broker
- Coppell, TX
You don't have to invest where you live, although sometimes it is helpful if you want to do your own PM or maintenance.
However I have had customers from all over the world who manage themselves remotely, so it can be done.
Plenty of tech companies moving to Dallas....don't depend on just Apple and Facebook.....they're probably in Dallas too, you just may not hear big announcements.
When you say investment are you thinking of buying a place for you to live in or a place to rent out. Most serious investors don't consider their primary home an investment property.
Where you want to live, the kind of house you buy, the features, the location, the size, the price, might be completely different for the house you want to live in....vs the one you want to rent out....that's what we consider investment.
If its simply an investment, state income taxes are more than likely not relevant in your situation (so removes a con). If you're simply getting rental income and taking depreciation against that, assuming you're leveraged, you shouldn't show any income for state tax purposes. *I am not a CPA (anymore), nor do I play one on TV*
Unfortunately, I've only been in the great state of Texas once, so not much help in comparing the 2 for you. I'm pretty confident that both will do great for you on a long-run basis.
@Sam Reddy because Texas does not have an income tax, just run that factor as well with your numbers. Texas does have higher property taxes than many states and good to look at that with your overall investment picture. However, if you also live in Texas, there is no income tax to report which is why property taxes are a bit higher.
It really comes down to where your numbers work best. Run the numbers on similar properties in both locations. The DFW market remains competitive. Properties under $400K are still receiving 10+ offers. If cash flow is your biggest goal consider a house hack.
@Sam Reddy. If you live here now, house hacking is a great first investment. Then move to Raleigh and buy your second house hack. As you know personal residences allow you to put down less than 20%. While the CF may not be as high in the beginning, you reap the other benefits of owning real estate as you grow your portfolio. Best wishes
Cashflow in Dallas is getting harder to come by in the areas most people want to invest, especially if you're a new investor. Look at what you cashflow goal is and run the numbers accordingly. I agree with others that a househack is a great way to cashflow if you can do it. I have rentals in DFW as well as out of state. You definitely don't have to live near your properties to succeed.
@Rob Lee Househack as in rent by the room and live with others?
How does the high property tax / high interest rate look right now in buying a first home? It is hard to navigate in these crazy times
@Eric Long Yep, house hacking provides an opportunity to get the mortgage paid until you are ready to move on to your next property. Rents continue to rise and DFW remains low on inventory. High property taxes and interest rates aren't going anywhere anytime soon. Purchase something you wouldn't mind living in and refinance later.
Sam,
In regards to your request for input on places good for rentals have you ever considered looking in North Dallas where most of the growth is heading? Would love to discuss this more with you if it is something you are interested in!
Hi @Sam Reddy...
Here is the major reason of Dallas RE booming...and this will continue for next 10-20 years as more corporation relocating.
You must heard CAT last month and Wells Fargo may be next one...
