Best Markets in 2023?

Question

New to investing in real estate! Looking into MTR/LTR or Multifamily. What are the best markets to invest in for MTR/LTR and multifamily? Currently reside near the Dallas, TX area but open to invest out of state if need be. Ideally would love to invest in a multifamily where I can house hack.

Jose Matuk · Answer

I’m also in Dallas with a LTR near Austin. The problem I’m having is that the property taxes (when it’s not your primary home) are very high. This makes it very difficult to achieve positive cash flow even with a low rate mortgage. So I’m looking into selling that house and moving that investment somewhere else.

Jay Thomas · Answer

If you’re looking for the best markets to invest in for these types of investments, then you should consider areas like Houston, TX.

Rick Albert · Answer

This question comes up a lot in the forums. There isn't a right answer because if there was, everyone would flock there and raise prices, making it no longer feasible. You are also going to see a lot of Realtors tote that their market is best. Take it with a grain of salt. Some might be just trying to get your business. Who you work with matters.

The reality is probably most major markets will work. Deals aren't found, they are made.

Dallas is very nice and Texas in general is having people move there. Here are steps I would take:

1. What are your long term and short term goals? Think next 12 months and next 5 years.

2. Think about what sacrifices are you willing to make. Roommates or living by yourself? Think about the lifestyle you want.

3. What do you qualify for today? Sure buying multifamily would be great in Dallas, but do you qualify? Do you have the down payment?

4. Then dig into what @Kyle Dwyer said, which was great.

Chances are that sticking in Dallas will prove to do well for you since you already know the market. Especially if house hacking is your goal and you already work in Dallas (assuming you aren't 100% remote).

Kyle Dwyer · Answer

Hi Michelle,

Welcome to the world of real estate investing! It's great to see your interest in MTR/LTR and multifamily properties. When it comes to determining the best markets for investing in these property types, there are several factors to consider. While I can't provide an exhaustive list, here are a few key points to help you in your search:

1. Market fundamentals: Look for markets with strong economic growth, job opportunities, population growth, and favorable demographics. These factors contribute to increased demand for rental properties, making it easier to find tenants and achieve higher occupancy rates.

2. Affordability: Consider markets where property prices are relatively affordable compared to rental income potential. This is particularly important when you're looking to house hack or generate positive cash flow from your multifamily property.

3. Rental demand and market dynamics: Research the rental demand in the area and assess the market dynamics. Are there universities, colleges, or major employers that attract a steady stream of renters? Is the market experiencing population growth or an influx of young professionals who prefer renting over homeownership?

4. Rent-to-income ratio: Evaluate the rent-to-income ratio in a market to ensure that rental rates are sustainable and in line with local income levels. This helps attract tenants and reduces the risk of high vacancy rates.

5. Rental regulations and landlord-friendly laws: Familiarize yourself with the local rental regulations and landlord-tenant laws in any market you're considering. Look for areas that have landlord-friendly laws and regulations that provide a favorable environment for rental property owners.

6. Networking and local expertise: Connect with local real estate professionals, property managers, and investors in the markets you're interested in. They can provide valuable insights into the local market conditions, emerging neighborhoods, and investment opportunities.

Considering you reside near the Dallas, TX area, it may be beneficial to explore the local market as well. Dallas has a strong real estate market with a growing population and diverse economic sectors, which could present attractive opportunities for MTR/LTR and multifamily investments.

Remember, conducting thorough market research and due diligence is essential when investing in any market, whether it's in-state or out-of-state. Each market has its own unique characteristics, and what may work well in one area might not be as successful in another.

Best of luck as you embark on your real estate investing journey!

Hamp Lee III · Answer

Welcome to BiggerPockets!

If you ever want to consider San Antonio, please send me a message.

I wish you all the best.

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