Real Estate Investing Performance In Dallas
| Avg Purchase Price | Avg Purchase Price | Avg Cash on Cash Return | Avg Cash Needed to close | |
|---|---|---|---|---|
| Commercial 5+ units LTR | 125k - 200k per door | 4% - 7% | 0%-5% (assumes 25% down payment) | $45,000 per door |
| Short Term Rental (SFH) | 350k - 550k | 7% - 9% | 8% - 12% | $92,500 (furnished) |
| STR (2-4 Units) | 175k - 225k per door | 8% - 10% | 9% - 13% | $51,500 per door (furnished) |
| Long Term Rental (2-4 Units) | 150k - 200k per door | 3% - 5% | 0% - 4% | $48,000 per door |
| Long Term Rental (SFH) | 275k - 350k | 0% - 4% | 0% - 4% | $71,500 |
| Househack (2-4 Units) | 150k - 200k per door | n/a | n/a | $12,250 per door |
| Househack (SFH) | 300k - 400k | n/a | n/a | $17,500 |
Value-Add Rent By The Room
Value-Add Rent By The Room in Round Rock
1233 Kenneys Way, Round Rock
ROI
19.54% IRR
Gross revenue
$57,600
Multifamily Short Term Rental
Renovated Triplex in Denver Heights Perfect for STR
439 Porter St, San Antonio
ROI
24.38% IRR
Gross revenue
$94,680
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Top Tips for Investing in Dallas Real Estate
Dallas is the best place to invest in as it has different asset types, each with a unique price point. In the last few years, we have helped interested investors acquire different types of properties ranging from short-term rentals to Airbnbs.
Our team has also assisted with the acquisition of house hacks, 20+ unit multi-family homes, and even dealt with ground-up development properties. Below are the top tips to consider when investing in Dallas real estate.
- We need to sit down with you and discuss your investment goals. Here, we require you to provide us with as much information as possible.
- Understand that the investment market in Dallas is highly competitive, especially when dealing with turnkey properties. Therefore, try not to get distracted during the selection process.
- Consider investing in areas such as Highland Park, Lower Greenville, Deep Ellum, and Bishop Arts. These are the most active property areas.
- Remember that the local population will continue to increase in coming years, with the Census Bureau estimating that its population will be the third highest by 2030.
Below is a more detailed look at these Dallas neighborhoods and what makes them unique.
Main Activities/ Attractions of The Dallas Area
The following are the top things to do and see in Dallas:
- The Sixth Floor Museum at Dealey Plaza: Make your way to this repurposed museum to see and marvel at the life and work of President John F. Kennedy.
- White Rock Lake Park: It’s the perfect spot to lace up your running shoes and go for an early morning or late evening run.
- Dallas Arboretum and Botanical Gardens: Situated in East Dallas and has been around for 50+ years. Its exhibitions change with every new season.
- Dallas World Aquarium: It’s an incredible building comprising multiple stories and showcases habitats from different parts of the planet.
- George W. Bush Presidential Library: This state-of-the-art library helps chronicle the former president’s time in the highest office in the land.
Reunion Tower: Get a chance to ride the elevator to the highest part of the tower, where you can enjoy a 360-degree view of the Dallas area.
Success stories investing in this area
“Used Victor in finding and purchasing my first investment property. Victor and his team were knowledgeable in providing help along the way especially toward the end while getting everything squared away.”
Logan Hicks
Long Term Rental
Victor was an awesome realtor! We were first time investors in Texas and he was very responsive, experienced, and pleasant. Every question we had he answered promptly and from start to finish Victor guided us thorough the whole process and made the buying transaction as smooth as possible for us! You will not be disappointed by working with Victor Steffen, thank you Victor!
Janeth Quintero
Long Term Rental
Dallas Real Estate Investment Strategies
Real estate investments in Dallas offer a unique opportunity to diversify your portfolio. If you’re to invest in the Dallas area, we recommend following two crucial investment strategies to ensure you’ll get the return you want.
- Multi-family short rentals have the best opportunity for steady cash flow and long-term price appreciation. These are aided by the fact that Dallas is home to:
- A major international airport
- Fortune500 companies
- World-class healthcare system
- Major universities
- The vibrant tourism industry in the downtown area
- Utilize the high income generated by your Dallas rental properties in the first two to three years to maintain a good cash flow until the property prices appreciate. Use this strategy to maintain a good cash flow until you transition the rentals into a long-term tenant base.
Is Dallas a Good Real Estate Investment?
Dallas, Texas, is considered one of the best markets in the country for real estate investors to buy rental properties for several reasons, including:
Strong Economic Growth: Dallas is home to a strong and diverse local economy, with major employers in industries such as technology, finance, and healthcare. This strong local economy provides a stable source of employment for residents and helps to support the local real estate market. Some of the largest employers in Dallas include:
AT&T – Founded in 1983, AT&T is a telecommunications company that employs over 12,000 people in Dallas.
Texas Health Resources – Founded in 1997, Texas Health Resources is a healthcare system that employs over 15,000 people in Dallas.
Bank of America – Founded in 1904, Bank of America is a financial services company that employs over 10,000 people in Dallas.
JPMorgan Chase & Co. – Founded in 1799, JPMorgan Chase is a financial services company that employs over 10,000 people in Dallas.
ExxonMobil – Founded in 1870, ExxonMobil is an oil and gas company that employs over 10,000 people in Dallas.
Southwest Airlines – Founded in 1967, Southwest Airlines is an airline that employs over 10,000 people in Dallas.
Growing Population: Dallas has experienced significant population growth over the last several years, due to its strong local economy, affordable housing options, and attractive lifestyle. This growing population has helped to create a steady demand for housing, which has supported real estate appreciation. According to data from the United States Census Bureau, the population of Dallas was approximately 1.3 million in 2010 and has grown to an estimated 1.46 million as of 2020. This represents an increase of approximately 12.3% over the last decade.
Affordable Housing Options: Compared to other major cities in the United States, Dallas is known for its relatively affordable housing options, making it an attractive option for first-time homebuyers, families, and real estate investors. $270,000, according to Zillow. This is up from approximately $200,000 in 2015, reflecting a significant increase in home values over the last few years.
Strong Rental Demand: With a growing population and a strong local economy, there is a steady demand for rental properties in Dallas. This demand for rental properties can help to ensure a consistent and stable rental income for real estate investors. According to data from Zillow, the average rent for a one-bedroom apartment in Dallas is currently estimated to be approximately $1,200 per month, while the average rent for a two-bedroom apartment is approximately $1,400 per month. These rental rates are up from approximately $1,000 and $1,200, respectively, in 2015, reflecting a significant increase in rental prices over the last several years.
It’s worth noting that rental prices in Dallas can vary depending on factors such as location, property type, and neighborhood. Some of the most expensive neighborhoods for renters in Dallas include Uptown, Oak Lawn, and Downtown, while some of the more affordable neighborhoods include Lake Highlands and Casa View.
Is it a Good Time to Invest in Dallas?
Right now is a terrific time to invest in Dallas real estate!
There have been several new and exciting developments happening in Dallas, Texas recently. Some of the most notable ones include:
Real Estate Development: Dallas has seen a surge in new real estate development projects over the last few years. New residential and commercial buildings are being built, which is driving up demand for rental properties.
Technology Industry Growth: Dallas has become a hub for technology companies, with several major tech firms choosing to set up their headquarters in the city. This has resulted in the creation of many new job opportunities and has helped to drive economic growth in the area.
Cultural Attractions: Dallas has a thriving arts and cultural scene, with numerous museums, galleries, and performance spaces. The city has also recently opened several new cultural attractions, such as the Perot Museum of Nature and Science, the AT&T Stadium, and the Winspear Opera House.
Food and Beverage Scene: Dallas has a thriving food and beverage scene, with a diverse range of restaurants, bars, and cafes. The city is home to several popular food festivals and events, such as the Texas Wine and Food Festival and the Dallas Wine and Food Festival.
Best Negihbourhoods to Invest in Dallas
The most desirable communities for real estate investors in Dallas, Texas can vary based on a number of factors, such as proximity to amenities, schools, parks, access to public transportation, and the local real estate market. Some of the communities in Dallas that are considered to be popular with real estate investors include:
Uptown
Uptown is a neighborhood located in the northern part of Dallas, offering a range of homes, parks, and a convenient location near shopping, dining, and entertainment options.
Lake Highlands
Lake Highlands is a neighborhood located in the northeastern part of Dallas, offering a range of homes, parks, and a convenient location near shopping, dining, and entertainment options.
Oak Lawn
Oak Lawn is a neighborhood located in the northern part of Dallas, offering a range of homes, parks, and a convenient location near shopping, dining, and entertainment options.
In addition, here are three more affordable communities in Dallas, Texas that are popular with tenants:
Pleasant Grove
Pleasant Grove is a neighborhood located in the southeastern part of Dallas, offering a range of affordable homes and a convenient location near shopping, dining, and entertainment options.
Red Bird
Red Bird is a neighborhood located in the southwestern part of Dallas, offering a range of affordable homes and a convenient location near shopping, dining, and entertainment options.
Wynnewood North
Wynnewood North is a neighborhood located in the southern part of Dallas, offering a range of affordable homes and a convenient location near shopping, dining, and entertainment options.
Lower Greenville
It’s the area you want to invest in if you want close proximity to Downtown Dallas. It features a gorgeous historic district and a fair amount of multi-family homes. The area features mature tree-lined streets and is easily walkable.
Lower Greenville has a distinct charm that’s reminiscent of old Dallas. Real estate prices have been appreciating every few years, as the area has a strong demand for both purchases and long-term leases.
A typical One-bedroom apartment in the area retails for $2,000+ per month.
Bishop Arts
It’s the area you want to invest in if you want close proximity to Downtown Dallas. It features a gorgeous historic district and a fair amount of multi-family homes. The area features mature tree-lined streets and is easily walkable.
Financing Information for Dallas Real Estate Investors
Real estate financing is a major challenge for most investors. Luckily, JVM can finance all long-term hold STR acquisitions. If you’re interested in buying a larger 5+ unit for investment purposes, the firm can introduce you to commercial and DCSR loan providers.
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