Dallas vs Houston SFH Investment - Which one is better?

Question

Which one would bring higher cashflow on rental properties?If also anyone invested in 2021 (or you've got clients who did that) could you please share your numbers?

Wale Lawal · Answer

Many of my clients are Investing in Houston. Depending on your goals and criteria, here are some good zip codes within the Houston Area you may consider.

77033, 77384, 77304, 77450, 77381, 77385, 77449, 77493, 77450, 77084, 77090, 77082

Cities like: Katy, Cypress, Spring, Some part of Houston, Conroe, Tomball, Pearland are great place to own rentals. These cities tends to command quality tenants and they have great schools.

I personally have rentals in Houston, Spring, & Conroe.

You are more than welcome to reach out if you have any questions.

Good Luck and go make it happen!

Rob Lee · Answer

It really depends on what you're looking for. Both markets have experienced great appreciation over the last 5 years. Check out 3rd party articles on the best places to live. There are usually 3-5 DFW cities on the list. You may also want to research what each area has to offer when it comes to economic growth, sports, entertainment, and education. Houston has lower prices but has also had quite a bit of flooding due to storms and hurricanes. Houston generally has more mixed-use zoning. Whether that's good or bad depends on your preference. In the end, the individual neighborhood will determine potential rental income. Good luck!

Rob

Andrew Bang · Answer

Houston for cash flow, though positives for both markets. In Houston, cheaper price point in Class B neighborhoods, I'm still finding properties that hit the 1% rule.  ($200k property can get $2000.00 month rent)   as long as you stay away from homes that need flood insurance.  I see Dallas appreciating at a higher %.  So long term play for appreciation is Dallas, Houston for cash flow.

Ronald Rohde · Answer

Depends on neighborhood and even the house. Thats an asset question, not a market question.

Sarp Ka · Answer

Appreciation is also problematic in TX. That's because appreciation yields higher property taxes. Ie paying $1k higher property taxes would also negate $100/mo increase in the rental pricing.

So I'm really trying to understand if I can have cashflow positive properties in Dallas. I'm okay with waiting 1-2 years if it grows over time.

Sarp Ka · Answer

What's the monthly expenses for $200k property? Taxes, insurances, HOA etc?

Assuming 20% downpayment with 3.8% interest rate.

Paul Blair · Answer

Many of our clients are investing in DFW.  In the average neighborhood cash flow percentages are low for the first year or two, then you'll see that grow.  However if you push into south Dallas you may find higher cash flow, which may or may not come with more problematic tenants.

The average investor here see a good appreciation along side cash flow.  As your appreciation grows, rental rates grow, the investment here will grow organically over years.

Kusal Swarnakar · Answer

It will really depend on zip code to zip code. Houston may be better, I think San Antonio is even better

Dallas vs Houston SFH Investment -> Which one is better?

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