Pick a city in DFW to buy a rental properties

Mahdi Mike

Member since 2022 · 23 posts · 3 votes

Between cities below which one you think is better for buying a rental properties and why?

1. Irving

2. Plano

3.. Frisco

4.. Richardson

5.. Allen

6.. Other

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Bruce Lynn

Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes

Denton....Anna....Little Elm...Aubrey...Princeton...Greenville.

Frisco is way too expensive for the rent you can get.....strange dynamics there where way too many people bought houses 10-15 years ago...now have income to upgrade...keep the old low cost house and then rent it cheap....probably 100s of these. They don't care about returns. Tough to compete with real numbers when you competition doesn't. At some point maybe another 10 years there will be some older beat up homes to BRRRR or flip I expect.

Plano can have some opportunity...but often tough to make numbers work.

I think one trick too is finding the right rent/price ratio in some of these cities....typically what works best is smaller homes that are lower in price where you can still get good rent numbers...

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Taylor DaschBusiness Member
Real Estate Agent · Temple, TX · Member since 2022 · 1k+ posts · 700 votes
3y
I believe all of these are expensive markets, although I'm not sure. Plano and Frisco are definitely expensive so it depends on what you are doing. Have you looked into Arlington?
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Mahdi Mike
OP
Member since 2022 · 23 posts · 3 votes
3y
I am not interested in Arlington.
It is okay to pay a bit higher or not having too much cashflow in first years.
I want to have good tenants
0 Reply
Lauren DeFreitas
Real Estate Agent · Keller · Member since 2022 · 19 posts · 7 votes
3y
I would suggest Plano and Frisco. I personally flipped a house in Plano and sold it to an attorney who is using it as a luxury rental. So I have personal experience that the area is worth the investment. Frisco has world-wide attractions such as the PGA facilities as well as the proposed Universal Theme Park, Toyota Stadium, etc. They are both areas that will be appreciating in value for a long time to come.
2 Reply
Jevon Shaw
Investor · DFW, TX · Member since 2022 · 198 posts · 161 votes
3y
+1 for Plano and Frisco as @Lauren DeFreitas stated. Definitely a great long term play. In fact, they just opened a new high school in Frisco this school year. The caveat is it's very expensive and you're unlikely to cashflow.
0 Reply
Bruce Lynn
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
3y
Denton....Anna....Little Elm...Aubrey...Princeton...Greenville.

Frisco is way too expensive for the rent you can get.....strange dynamics there where way too many people bought houses 10-15 years ago...now have income to upgrade...keep the old low cost house and then rent it cheap....probably 100s of these. They don't care about returns. Tough to compete with real numbers when you competition doesn't. At some point maybe another 10 years there will be some older beat up homes to BRRRR or flip I expect.

Plano can have some opportunity...but often tough to make numbers work.

I think one trick too is finding the right rent/price ratio in some of these cities....typically what works best is smaller homes that are lower in price where you can still get good rent numbers...

4 Reply
Mahdi Mike
OP
Member since 2022 · 23 posts · 3 votes
3y
Quote from @Bruce Lynn:

Denton....Anna....Little Elm...Aubrey...Princeton...Greenville.

Frisco is way too expensive for the rent you can get.....strange dynamics there where way too many people bought houses 10-15 years ago...now have income to upgrade...keep the old low cost house and then rent it cheap....probably 100s of these. They don't care about returns. Tough to compete with real numbers when you competition doesn't. At some point maybe another 10 years there will be some older beat up homes to BRRRR or flip I expect.

Plano can have some opportunity...but often tough to make numbers work.

I think one trick too is finding the right rent/price ratio in some of these cities....typically what works best is smaller homes that are lower in price where you can still get good rent numbers...

What would be a good rent / price ratio?
Is there any available data to show where I can see low vacancy ratio in a city or neighborhood?
What would be a good price range to search for SFH?
0 Reply
Maggie Owen
Real Estate Agent · Dallas, TX · Member since 2021 · 18 posts · 7 votes
3y
I agree with Bruce on some of the locations he suggested. I personally love Plano and Frisco and believe there are still good deals to be found just more difficult. I also suggest looking in Grayson County. Properties are a lot cheaper and there is a lot of anticipated growth, as well as a strong rental demand.
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Mahdi Mike
OP
Member since 2022 · 23 posts · 3 votes
3y
Quote from @Maggie Owen:

I agree with Bruce on some of the locations he suggested. I personally love Plano and Frisco and believe there are still good deals to be found just more difficult. I also suggest looking in Grayson County. Properties are a lot cheaper and there is a lot of anticipated growth, as well as a strong rental demand.
Our budget is 300 to 370k. Can we still find a rental property.
0 Reply
Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
Killeen Texas
Proximity to Austin
0 Reply
Mahdi Mike
OP
Member since 2022 · 23 posts · 3 votes
3y
Quote from @Lauren DeFreitas:

I would suggest Plano and Frisco. I personally flipped a house in Plano and sold it to an attorney who is using it as a luxury rental. So I have personal experience that the area is worth the investment. Frisco has world-wide attractions such as the PGA facilities as well as the proposed Universal Theme Park, Toyota Stadium, etc. They are both areas that will be appreciating in value for a long time to
how would be the vacancy rate in Plano or Frisco?
Would be more than one month?
our budget would be max 370k

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Mahdi Mike
OP
Member since 2022 · 23 posts · 3 votes
3y
Quote from @Eliott Elias:

Killeen Texas
Proximity to Austin
That is far
0 Reply
Mahdi Mike
OP
Member since 2022 · 23 posts · 3 votes
3y
Quote from @Maggie Owen:

I agree with Bruce on some of the locations he suggested. I personally love Plano and Frisco and believe there are still good deals to be found just more difficult. I also suggest looking in Grayson County. Properties are a lot cheaper and there is a lot of anticipated growth, as well as a strong rental demand.

How is the strong rental demand?
what would be the vacancy rate?
0 Reply
Bruce Lynn
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
3y
@mahdi mike If you are trying to calculate vacancy rate for a financial model, I would use 7-8% generally. Seems like the past 5 years this has probably gone down as tenants have stayed longer in the homes...sometimes 2-3-4 years. I would expect that trend continues as affordability decreases. Normally what I see for properties in good condition and good markets and fairly priced there is about 30 days between tenants. Of course there are plenty of variables....how strict you are with tenant guidelines, what you ask for rent, condition of the property, time of year, if you allow pets or not, if you self rent or use a Realtor or PM to rent the property, and probably a host of other factors. For example I have never allowed pets in my properties, but these days that might cut out 80% of the renters, so you could have higher vacancy rates. Have, publish and distribute guidelines and that will eliminate probably 50% or more of potential tenants who will self select out, because they don't meet the guidelines. Some of those issues will probably increase your vacancy up front, but may decrease it later on....and fewer headaches down the road.
2 Reply
Joehn B.
Investor · Houston · Member since 2022 · 80 posts · 44 votes
3y
You can get good tenants in a C, D area. you can also get horrible tenants in an expensive B area. Its all in the screening. Choice of area has more to do with your goals. do you want cash flow or appreciation? sounds like you are in it for an appreciation play.
1 Reply
Lucia Rushton
Realtor · Dallas - Fort Worth Metroplex, TX · Member since 2016 · 1k+ posts · 925 votes
3y
@Mahdi Mike too vague of a question. What is your budget ? DM me if you want to discuss.
0 Reply
Mahdi Mike
OP
Member since 2022 · 23 posts · 3 votes
3y
Quote from @Lucia Rushton:

@Mahdi Mike too vague of a question. What is your budget ? DM me if you want to discuss.
320 to 400.
0 Reply
Mahdi Mike
OP
Member since 2022 · 23 posts · 3 votes
3y
Quote from @Joehn B.:
You can get good tenants in a C, D area. you can also get horrible tenants in an expensive B area. Its all in the screening. Choice of area has more to do with your goals. do you want cash flow or appreciation? sounds like you are in it for an appreciation play.
My budget is up 370. As long as cashflow is not negative it is fine.
look for long term investment.

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Jay HurstBusiness Member
Lender · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
3y
Small multi-family in Dallas proper.
Hurst Real Estate, INC4.991 Reviews
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V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
3y
Go Dallas proper, southeast dallas is ghetto but I think if you get some other investors it can change. I'm all about it.
0 Reply
Mahdi Mike
OP
Member since 2022 · 23 posts · 3 votes
3y
Quote from @V.G Jason:

Go Dallas proper, southeast dallas is ghetto but I think if you get some other investors it can change. I'm all about it.

Can i find any property in Frisco in that range?
0 Reply
V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
3y
Quote from @Mahdi Mike:

Quote from @V.G Jason:

Go Dallas proper, southeast dallas is ghetto but I think if you get some other investors it can change. I'm all about it.

Can i find any property in Frisco in that range?

From my understanding, it's slim pickings. I've only looked at Fort Worth & Dallas proper. I've invested in Dallas proper, too.
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John MorganPro Member
Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
3y
@Mahdi Mike
6. None of those areas.
Those are too expensive and you will barely break even or be cashflow negative. I invest in Grand Prairie, Arlington, ft worth and Haltom city with properties in the 160-210k range that rent on average for $1800/month. Your ROI will be good and you'll rarely ever have a turnover in these working class hoods. My tenants are great in these areas and seem to want to stay with me forever. Low to zero turnovers save a ton of money too. And demand is the highest for rentals under 2k/month. And appreciation is higher for starter homes due to high buyer demand for affordable homes. PM me if you have any questions.
1 Reply
Andy WebbPro Member
Rental Property Investor · Carrollton, TX · Member since 2013 · 750 posts · 538 votes
3y
If I have to stick to that list (and ignore "Other"), then Irving is the winner. You are more likely to find a good purchase price point there, probably on older inventory that will require some rehab - but that is what we want to create some equity. And that market rents fast, huge renter pool, working-class demographic for the most part, middle of DFW - great place to be. Those other locations will all carry a very pricey entry price.
I did not closely read the other posts, but I did see someone mention Haltom City - I like that city, and those around it (e.g. east Tarrant County).
1 Reply
Mahdi Mike
OP
Member since 2022 · 23 posts · 3 votes
3y
Quote from @Andy Webb:

If I have to stick to that list (and ignore "Other"), then Irving is the winner. You are more likely to find a good purchase price point there, probably on older inventory that will require some rehab - but that is what we want to create some equity. And that market rents fast, huge renter pool, working-class demographic for the most part, middle of DFW - great place to be. Those other locations will all carry a very pricey entry price.
I did not closely read the other posts, but I did see someone mention Haltom City - I like that city, and those around it (e.g. east Tarrant County).

I guess more than 10 agents replied to this post and almost everyone says something different lol
That makes more confused now now on what to do and who I can rely on.
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Rhondalette W.
Dallas, TX · Member since 2014 · 517 posts · 106 votes
3y
@Mahdi Mike all are great.
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