Investing in Lubbock, TX

11 Replies

Hi,

This is my first post.  Looking to invest in Lubbock, TX. My understanding is that there is enough housing for the students and there is more of a demand for duplexes and Single Family rentals. 

My questions are:

1)  Is it better to buy a SF home or a Duplex? I believe the Cash flow is better on a duplex than on a SF home. There seems to be a decent supply of duplexes on the market. Is there an oversupply or just that the supply is there to meet the growing demand. 

2) Between the two school district which is a better bet - Frenship or Cooper?

3) Between Foxridge and Bushland communities which is a better bet in terms of ease of renting and better cash flow.

These deductions are solely based on my research online. I may be completely wrong in my deductions. I would greatly appreciate some inputs. 

Thanks,

Juhi

Hi, Juhi, and welcome to BiggerPockets!

1) I would not say that one is better than the other, it just depends on what deals present themselves and which ones meet your investment criteria. Some SF rentals will inevitably cash flow more than a duplex and vice versa. As far as students vs. non-students, the student body at Texas Tech is growing quickly, in addition to the large quantity of businesses and families moving into town. If you're fine renting to either, then you're set either way. 

There is a decent supply of duplexes on the market, I agree. A lot of them are brand new construction and of high quality. Some of the duplexes in Bushland as well as over just outside of Foxridge are selling for high-200s low-300s and leasing for $1500-1650 per side. The builders are continuing as long as demand is there, which doesn't seem to be slowing down.

2) Either way, you're looking at more expensive properties and higher rents. Both are highly-desired school districts--Cooper being the well-known one with some older neighborhoods and Frenship being further out where more of the brand new homes are being built. 

3) I've actually been out to look at duplexes in both Foxridge and Bushland in the past few weeks, and they're selling and leasing fairly quickly. Can't go wrong either way, both are new construction and very well done. I'm a huge fan of the Artistry Homes builds, and it seems everyone else is too with how much traffic they're getting. In Frenship school district and just a quick jaunt away from anywhere one might need to go.

Good luck in your investing, and glad you're looking at Lubbock!

Best,
Matt

Hey @Juhi Jain ! I'm a Realtor, property manager and an investor, here in Lubbock. My family owns and operates our own company and we specialize in SFR and small to medium multifamily acquisitions and management.

      There is definitely a huge supply of "student housing" In Lubbock right now. There have been several large student housing complexes built over the past few years. Most of these places are competing against each other while there is a little gap between the supply and the actual demand for these properties now. Many complexes have dropped their rents from around $500/bedroom to $400/for example.  There is still a good demand for rental properties in Lubbock for students and families. The city is growing and so is Texas Tech University. Many of my clients try to buy properties that can appeal to students and families. Doing so limits a little bit of risk with dealing with market cycles of students and opens up the property for more potential renters. 

Typically, there will be better cash flow with duplexes when compared to SFR's in Lubbock. The duplex market is extremely hot right now. Most available duplexes on the market are new builds. There are quite a few of these being built in the newer parts of town, because there is a high demand for them. There is a large demand in affordable housing in Frenship and Cooper School districts. Both of these districts are considered far superior to Lubbock ISD schools to most people. Both school districts are growing rapidly, because the town is moving in that direction. Almost all new residential construction and a large amount of new commercial construction is located in these school districts. It's hard to say which one is better. It really depends on the specific person. Both Cooper and Frenship are thought of very highly by the locals.

    Foxridge and Bushland are both new and pretty comparable. I think the market rents and ease of renting are very similar. If I had to choose, I'd probably give the upper hand to Bushland. If you have any other questions regarding Lubbock feel free to PM me.

You may also look at some of the neighborhoods in SW Lubbock. The home I have in Lubbock is in Monterey subdivision. It's a cheaper neighborhood and it's turning more towards a rental neighborhood, but it's still in a good part of town and Frenship schools. I'm not sure if it's still as hot as it was last year, but the last two years when I had the property up for rent, it leased in less than a week at almost $1 a sq ft. ($1400 for a 1460 sq ft house) It could be worth looking into if you can get in at the right price.

Juhi, for now I would stick with the SF homes. It was mentioned before but multifamily is somewhat bloated in Lubbock at the moment as newer apartment complexes are offering tons of amenities at low prices. In my opinion there are too many people looking at duplexes so the deals aren't very good. Good luck!

Thanks, Matt Moreland!  Looking into both. I think leaning more towards Foxridge due to it being a more established neighborhood. Would you know of a good property mgmt firm out there. TIA!

Thanks, Chris for your response. I was worried about that as well. In that case would you recommend  any specific area I should definitely look into and which to avoid. TIA!

Juhi, first of all, stay west of I-27. Southwest Lubbock is good, west of the loop is even better (but not too far). These areas will give you options of students and families and increase your marketability. Stay in the good school districts you mentioned unless you get a really good deal.

Hi Juhi!
In my opinion, duplexes (small multi-family) are quickly becoming inflated in Lubbock.There are several new ones coming on the market near he areas you mentioned. Cash flow can be decent, but exit can be more difficult than with a general SFH.

Both Frenship and Cooper ISD are good, but property taxes are higher in those areas, and property taxes tend to be higher in Texas anyway.

I hope that helps!

Originally posted by @Juhi Jain :

Thanks, Matt Moreland!  Looking into both. I think leaning more towards Foxridge due to it being a more established neighborhood. Would you know of a good property mgmt firm out there. TIA!

 @Juhi Jain I have personally seen what a good job Carrie Broadus and Kari Nettles at McDougal Companies do, and I have also heard good things about Minnix, Coldwell Banker Residential, and WestMark Leasing. All of the companies have similar systems in place for the most part, so it comes down to who has the best rates and who you get along with the best at the end of the day since they will be your main contact point.

Originally posted by @Juhi Jain :

Hi,

This is my first post.  Looking to invest in Lubbock, TX. My understanding is that there is enough housing for the students and there is more of a demand for duplexes and Single Family rentals. 

My questions are:

1)  Is it better to buy a SF home or a Duplex? I believe the Cash flow is better on a duplex than on a SF home. There seems to be a decent supply of duplexes on the market. Is there an oversupply or just that the supply is there to meet the growing demand. 

2) Between the two school district which is a better bet - Frenship or Cooper?

3) Between Foxridge and Bushland communities which is a better bet in terms of ease of renting and better cash flow.

These deductions are solely based on my research online. I may be completely wrong in my deductions. I would greatly appreciate some inputs. 

Thanks,

Juhi

 Our city had the greatest rental depreciation in the entire united states in 2017. :)

People from out of area speculating on Texas Tech & providing WAY too much student housing caused this & trickled down to all rentals. Demand should be filled within the next 4-5 years, I'd say. If you're on top of your properties, it isn't such a big deal, but the mom and pop landlords who just put signs out front and hoped for phone calls found it near impossible to rent their properties.

I'm still buying aggressively, so don't be discouraged. I would say, from my experience, there are more good SFR rental deals than there are duplex rental deals.

Frenship and Cooper are both desirable, but I do believe Cooper has taken the front position. Either way, you won't go wrong with family demand in these districts.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

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.

We hate spam just as much as you