Welcome to the LEAP Property Management DFW Rental Market Report for 2018! In this report, we’ll take a look at the current DFW rental market trends and, since it’s the beginning of a new year, take a look back at key trends in 2017 that stand to influence the rental market in the coming months.
Looking Back at 2017
2017 was an exciting year for property owners in the DFW rental market. Although many experts predicted the rental market had reached its peak in 2016, rental prices continued to rise throughout the year and show no signs of slowing down in 2018.
Rents are steadily rising thanks to the influx of new residents to the DFW area; because of the booming economy and high quality of life, DFW has become one of the most desirable areas to live in the country (more than 500,000 new residents move to the Dallas area from out of state each year). And as new residents continue to flood the market, competition for rental units will become even more frenzied, causing a continuing increase in rental prices.
2017 Rental Forecast: DFW Area
The rental market in the DFW area was set to grow 3.8% in 2017, from a median rent of $1,543 to $1,602.
2017 Rental Forecast: Dallas, Plano, Denton, Fort Worth
Although the entire DFW area was set to grow 3.8%, different cities within the DFW area were forecasted at different rates of growth. Dallas was set to grow 3.9%, Denton 3%, Fort Worth 2.7%, and Plano 2.1%.
2017 National Market Rental Forecast
If we compare DFW rental growth to the national average, it was both higher than the 2017 national median rent ($1,430) and had a higher growth percentage (the median rent across the country rose 1.9%).
National Projections: Home Value
Median home value: $201,900.
DFW Area Projections: Home Value
Median home value for DFW area: $213,000.
Median home value for Plano: $337,400 (up 6.4%, projected to grow 5% next year)
Median home value for Dallas: $176,300 (up 10%, projected to grow 5.3% next year).
Median home value for Fort Worth: $196,000.
Median home value for Frisco: $399,300 (up 4.1%, projected to grow 2.7% next year).
Median home value for McKinney: $305,600 (up 6%, projected to grow 3.7% next year).
LEAP’s Thoughts on the 2018 DFW Market
We’re going to be honest: there’s no way to know with certainty what will happen with the market. While most experts project major growth in the DFW market, you don’t want to buy property based on speculation. Instead, buy based on cash flow. If a property has the potential to generate positive cash flow, it’s a good investment — and if the market goes up, that’s just an added (and lucrative) bonus.
Even though, this early in the year, market growth is only speculation, there are a lot of factors in play that point to some major increases in value for investors this year. Thanks to the booming economy and job growth, HomeUnion has named Dallas one of the top 10 real estate investment opportunities in the nation.
If a property has the potential to generate positive cash flow, it’s a good investment — and if the market goes up, that’s just an added (and lucrative) bonus.
Rental markets across the country, including Dallas, are growing rapidly (especially single-family rental homes and condos, which now make up 35% of all rental units). And activity within the DFW metro area are causing both home values and rental prices to rapidly increase.
Take Frisco, for example. Home values in Frisco shot up 4.1% to nearly $400K thanks to a number of factors, in particular Toyota and the Dallas Cowboys moving their headquarter operations to the area. McKinney home values grew by a whopping 6% to $305,600 thanks to increased demand and an influx of new residents moving to the area.
One thing to consider when making an investment in property in the DFW area is how you’re going to manage it. From the investor’s side, as you grow your portfolio, you need someone to properly screen tenants, maintain your properties, enforce rules and regulations to protect your investment, and collect payment from residents. On the flip side, as more properties come on the market to meet rental demand, tenants are likely to expect more from their landlords; in order to stay competitive, property owners will need to reply promptly to tenant requests, make sure their properties are in working order at all times, and stay on top of repairs and maintenance.
It’s a lot of work, but you want to find the best tenants for your properties. Which is why you need the right property management company.
At LEAP, we bring over 15 years of experience managing properties in the DFW area. Our attention to detail, commitment to our clients, and competitive pricing sets us apart from the competition. When you work with LEAP, you’ll experience the best property management experience in the DFW area. Ready to get started? Get in touch today.