Deciding on a city/ neighborhood for OOS investor

Member since 2019 · 220 posts · 102 votes

I'm investing in Texas from out of state because I believe that you have a huge amount of growth coming in the future. My focus is on areas with a lot of business and people moving in, that can still cashflow.

I've considered Dallas, Houston, San Antonio and Austin each for various reasons, and I'm finding it hard to decide on just one city, let alone a neighborhood.

To the other OOS investors and local Texans, how do you decide where to invest?

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Rob Lee

Real Estate Broker · Dallas, TX · Member since 2016 · 248 posts · 240 votes

DFW has a diverse economy, a strong job market and good schools in the suburbs. Not to mention two airports for business and personal travel. These are just a few of the reasons we moved to the area and why we stay. My wife and I have been investors since 2013. Our property values have increased significantly over the last 6 years. The attached is an example of numbers I ran for a client interested in house hacking. The client plans to live in the house for a year. Let me know if I can be of assistance. Note: The down payment reflects the 3.5% minimum requirement.

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Matt Oldfather
San Antonio, TX · Member since 2019 · 11 posts · 3 votes
6y
I work in the San Antonio market so I can't speak for the other cities, but there is a lot of investment opportunity in San Antonio. It's affordable and growing fast. Our market is primarily single-family residences and the best bet is 3-4 bedrooms, 1400-2200 sq ft with rental rates between $.75-1.15/foot per month for rental rate. There are always outliers obviously and slam dunk deals do come up frequently, but tend to go with multiple offers. We do not have a whole lot of inventory as far as multifamily goes compared to other cities across the country.
Being named Military City USA there are several military bases that are solid if your strategy is to rent out your properties. The zip codes I recommend near military bases:
78218, 78109- Converse, has newer construction homes that tend to rent quickly but some of the lowest priced new homes in San Antonio. Near Randolph AFB and Fort Sam. Neighborhoods: Hanover Cove, Several near Randolph Blvd and 35, Windcrest area
Other areas I'd recommend are: 78251, 78250- Alamo Ranch- has a lot of new construction but priced tend to be a little higher, this is where a lot of people who work near Lackland AFB or work at USAA, Frost, downtown tend to live. There are numerous neighborhoods here, great school systems, high demand
Taxes tend to have a big impact on profit here, so there are definitely advantages to being just outside the Bexar county limits, just needs to be a case by case.
78249, 78254, 78240 UTSA area also offers some great rental houses at decent return rates, but they will be older and likely need more initial capex or maintenance, college rentals get more monthly but are more seasonal and tend to be lived in harder. Neighborhoods: Hunters Creek, Regency Oaks, Tanglewood.
There are other areas being revitalized closer to downtown that a lot of people are investing in as well such as Dignowity, Denver Heights, etc. Hope this helps!
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Rob Lee
Real Estate Broker · Dallas, TX · Member since 2016 · 248 posts · 240 votes
6y
DFW has a diverse economy, a strong job market and good schools in the suburbs. Not to mention two airports for business and personal travel. These are just a few of the reasons we moved to the area and why we stay. My wife and I have been investors since 2013. Our property values have increased significantly over the last 6 years. The attached is an example of numbers I ran for a client interested in house hacking. The client plans to live in the house for a year. Let me know if I can be of assistance. Note: The down payment reflects the 3.5% minimum requirement.
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Bryan Noth
Realtor · Austin, TX · Member since 2016 · 1k+ posts · 1k+ votes
6y
@Tyler D. ultimately it is your call. Dallas is a solid market and has been for a while. San Antonio has a lower barrier to entry on price, Houston might be in for a rough patch with everything right now, but that could mean discounted properties. What fits your strategy and REI goals best?

As for Austin, it continues to top lists of markets to invest in. If you combine the consistent track record of growth and projected growth based on future developments in the area, Austin is a tough market to beat. There is never a guarantee, but Austin checks a lot of boxes for many investors looking to build wealth.
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Lucia Rushton
Realtor · Dallas - Fort Worth Metroplex, TX · Member since 2016 · 1k+ posts · 925 votes
6y
@Matt Oldfather. How much are homes that you mentioned about 1,400-2,00 sq ft selling for ?
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