The economic forecast for the Dallas-Fort Worth area is almost as hot as the summer temperatures. It’s a great time to be a landlord in the DFW metroplex. Here are seven reasons we think you should consider purchasing a Dallas investment property:
1. Companies are moving to Dallas, Fort Worth and surrounding suburbs in record numbers.
More than eight million square feet of office space are currently under construction to house companies like Toyota, State Farm Insurance, Liberty Mutual and 7-Eleven. New corporate campuses with custom office space are the trend, and there are no signs that movement is slowing down.
2. We are at the core of an expanding, diversified economy.
DFW’s GDP, $413 billion in 2013, is the sixth highest in the nation, and higher than that of many countries. The area has seen an almost 12% increase in the labor force, with key growth in areas as diverse as agriculture and mining, education and healthcare, arts, entertainment and food services, as well as public administration, professional and scientific fields, and finance, insurance and real estate.
3. Prices are on the way up, but great deals still exist.
DFW median housing prices are among the lowest in the top 100 U.S. markets, with median gross rental rates comparable to higher-priced cities like Denver, Austin and Atlanta. Auction and bank-owned properties are still available, although the numbers have decreased significantly. In mid-2015, the percentage of “underwater” homes was 12.9%. The one-year residential appreciation rate is expected to be 5.2%, with the three-year rate at 26.3%.
4. Interest rates are still low but are expected to rise by the end of the year.
Svenja Gudell, chief economist for Zillow.com, expects to see four increases in the coming year, but she notes that the effects will first be seen on the coasts. Her assessment is that the Dallas-Fort Worth area will continue to remain a “hot market” throughout 2016.
5. You can expect high rents and a higher than average return on investment, with consistently high occupancy rates.
It is not unreasonable to anticipate a return on investment of one percent or more. The most sought-after rental properties are 3-4 bedroom floor plans with between 1,100 and 1,700 square feet. Average rent in a pleasant development can range from $1,200 to $1,600 for a home with a value between $110-140,000. The old adage of “location, location, location” applies. Homes situated in sought-after school districts and in subdivisions that are primarily owner-occupied will command higher rental rates.
6. Take your choice of single-family homes, condos or apartment buildings, with distinct markets for each.
Dallas in particular has trendy in-town neighborhoods like Uptown and developing areas, including Deep Ellum and Kiestwood in Oak Cliff. Condos and older single-family homes are popular in Bryan Place, Lake Highlands, and close-in suburban Richardson and Farmers Branch. Moreover, there are duplexes and mid-century modern homes that make immensely popular rentals scattered throughout both Dallas and Fort Worth.
7. A full-service property management firm will look after your investment and safeguard your interests.
Our experienced team has a wealth of information to share with investors, and is dedicated to building relationships with both investors and renters.
The Dallas Business Journal reported in July of 2015 that commercial vacancy rates had reached the lowest point in 15 years. Residential vacancies are similarly low, and we have found that the average time between listing and leasing for the properties we manage is just 16 days.
The Dallas-Fort Worth Metroplex is one of the nation’s top entrepreneurial hotspots, and it shows no signs of slowing down. You can become a part of that vibrant growth and development cycle by capitalizing not only on short-term advantage, but also long-term gain.
In short, it’s a great time to be a landlord in our cities.
Not sure how to get started investing in Dallas real estate? Give us a call!