I am ready to buy my first out of state investment property. I am looking for some positive cash flow with potential appreciation. My whole idea is to learn from this process and keep investing in other markets which are little risky.
Which areas should I look in Dallas? I am here to learn from people who has investment in Dallas.
@Anand Mundada Fort Worth might be a little easier for you and I would target any areas with properties valued at $175,000 and below. For Dallas, Mesquite is "harder" to invest in because of all the rules the city has against it...but plenty of investors still make good money there by just conforming to those rules. And the southeast part of Dallas has become pretty tough lately. Every other section of the Dallas - Fort Worth area is pretty solid...as long as the houses are $175,000 and below. Hope this helps!
@Anand Mundada Fort Worth might be a little easier for you and I would target any areas with properties valued at $175,000 and below. For Dallas, Mesquite is "harder" to invest in because of all the rules the city has against it...but plenty of investors still make good money there by just conforming to those rules. And the southeast part of Dallas has become pretty tough lately. Every other section of the Dallas - Fort Worth area is pretty solid...as long as the houses are $175,000 and below. Hope this helps!
I am ready to buy my first out of state investment property. I am looking for some positive cash flow with potential appreciation. My whole idea is to learn from this process and keep investing in other markets which are little risky.
Which areas should I look in Dallas? I am here to learn from people who has investment in Dallas.
I invest in Both Texas and Arizona. For equity growth you want Texas. For cash flow you want Phoenix. Property taxes in Texas are high and eat into any profit you might think you'd get. Both states are landlord friendly and growing. In my opinion you can make it work in either place (obvious or I wouldn't be investing in both). But, decide if you want equity growth and have a fair amount of money to put into a property, then Texas or if you have a fair amount of money and want great cash flow then Arizona.
@Ronald Rohde I am fine with buy and hold strategy. But given property taxes are so high there is a recommendation that you buy new house and pay less property taxes and use 5 year warranty and then sell this property for 1031 exchange.
What 5 year warranty? Why would new construction have lower property taxes? I tend to disagree with most of these points but the high tax and doing 1031!
@Anand Mundada - Look at the past years local MLS Real Estate and economic business reports. It should give you good information on the different submarkets and path of progress. In my opinion, property taxes are not high if you account that Texas has no state income tax. Just need to account for it in your proforma analysis.
There are a lot of other markets besides DFW that are attractive as well. New construction will not have lower taxes.
Connect with a few local real estate agents to get more informed.
@Anand Mundada Fort Worth might be a little easier for you and I would target any areas with properties valued at $175,000 and below. For Dallas, Mesquite is "harder" to invest in because of all the rules the city has against it...but plenty of investors still make good money there by just conforming to those rules. And the southeast part of Dallas has become pretty tough lately. Every other section of the Dallas - Fort Worth area is pretty solid...as long as the houses are $175,000 and below. Hope this helps!
Can you even find anything decent for $175K or below these days?
The Dallas population for the last 20 years is increasing .75% per year. DALLAS-FORT WORTH-ARLINGTON, TX population is increasing by 2.25% per year for the last 20 years. Land Values in Dallas County rose 33.8% during 2012-2017 (Source: Harvard Joint Center for Housing Studies). Jobs are projected to increase by 15% during 2017-2030, 1.15% job growth per year (Source: McKinsey Global Institute)
In Dallas specifically, invest in A and B locations. You want to buy C and D properties in A and B locations. Check City-Data Map on Dallas. Find the change of % for house median prices from 2000 to now and all dark spots are probably good bets for future appreciation. Probably want to target lighter dark areas for lower price homes where 1% rent rule may be beaten (if the house is worth 200k, it must make 2k per month in rent or it is probably not worth it). It very hard to beat 1% rule in A locations, especially for single-family houses.
@Sameer Bhalesha Thanks for sharing your thought. City-Data Map seems useful. I have been looking for SFH properties that meet 1% rule in DFW area but I dont think it exist (especially turn key) in this market.
@Sameer Bhalesha Thanks for sharing your thought. City-Data Map seems useful. I have been looking for SFH properties that meet 1% rule in DFW area but I dont think it exist (especially turn key) in this market.
Yes my brand new home is $160 4/2......como(ft worth) Texas 5/10min from downtown ftw
That's likely because it's brand new and your assessor charged taxes based upon it being vacant land during their last assessment. Now that it has been improved upon their next assessment will reflect that and your taxes will go way up.
I am ready to buy my first out of state investment property. I am looking for some positive cash flow with potential appreciation. My whole idea is to learn from this process and keep investing in other markets which are little risky.
Which areas should I look in Dallas? I am here to learn from people who has investment in Dallas.
I invest in Both Texas and Arizona. For equity growth you want Texas. For cash flow you want Phoenix. Property taxes in Texas are high and eat into any profit you might think you'd get. Both states are landlord friendly and growing. In my opinion you can make it work in either place (obvious or I wouldn't be investing in both). But, decide if you want equity growth and have a fair amount of money to put into a property, then Texas or if you have a fair amount of money and want great cash flow then Arizona.
What's been your experience with taxes on your Texas properties recently? I've seen and heard lots of complaints regarding significant increases out there.
Anywhere in the major metros of Texas is great. You will most likely get a little more cashflow in Ft Worth, Houston, and San Antonio. DFW and Austin are a little pricey compered to the other major MSAs. You could possible gets some deals in suburbs and especially Ft Worth.
I typically target 3/2/2, approx 1500sf properties in nice working class areas. You can usually look at the crime graphs from the local police depts. Basically avoid areas with shooting and where you will need a gun to collect rent. If you target SA, Houston, Ft Worth, maybe suburbs of Dallas, you can get a nice working class rental for $175-300k and get an approx 10-20% cashflow. Appreciation, will also continue to skyrocket in the TX market due to low supply and everyone moving here.
@Anand Mundada there's no doubt that Dallas has strong economic and demographic fundamentals but if your goal cash flow, you might want to consider other markets. TX has some of the highest property taxes and insurance rates in the nation which really kills cash flow.