Real Estate Investing Performance In Texas
Knowing the returns you might get after your investment is crucial. This will help you know if an investment is worth it or not. This table shows what returns to expect:
|Avg Purchase Price||Avg Cap Rate||Avg Cash on Cash Return||Avg Cash Needed to close|
|Commercial 5+ units LTR||n/a||n/a||n/a||n/a|
|Short Term Rental (SFH)||n/a||n/a||n/a||n/a|
|STR (2-4 Units)||n/a||n/a||n/a||n/a|
|Long Term Rental (2-4 Units)||300-400k||3% - 5%||2% - 4%||98k|
|Long Term Rental (SFH)||300k - 350k||2% - 4%||2% - 3%||$71,500|
|Househack (2-4 Units)||150k - 175k per door||n/a||n/a||$12,500 per door|
|Househack (SFH)||325k - 400k||n/a||n/a||$18,750|
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Texas Real Estate Investment Tips
If you are to explore opportunities to purchase apartments and properties in Texas, here are a few tips that will help you stay on track:
- Check Potential Communities: Texas is an expansive region encompassing vibrant cities and appealing communities. Our clients have achieved considerable success in Austin neighborhoods that leverage its ties to the tech industry. The Dallas-Fort Worth region is dynamic, marked by swift population growth, while Houston holds allure for local investments. College towns like College Station and Lubbock offer significant potential, and suburban areas around cities such as San Antonio are undergoing expansion as individuals search for more space and tranquility.
- Always Check the Condition of Houses: Wise property investment in Texas involves avoiding real estate that could lead to losses. Across Texas cities, housing stock varies widely. Areas with rich histories might feature homes dating back to the late 1800s, while housing from different 20th-century decades is also prevalent.Newer properties may offer improved features and more durable systems, such as foundations and plumbing. However, conducting a comprehensive property inspection is essential before making any purchase, regardless of its age. We can assist your Texas real estate investment journey by linking you with accredited inspectors to validate properties before you invest.
- Growth Potential of the Area: Texas real estate investors should consistently prioritize assessing an area’s growth potential before making investments. Comprehensive research into local markets enables you to anticipate whether property prices will appreciate or remain stagnant. We can assist with our extensive expertise in local markets across various Texas regions, conducting in-depth evaluations of potential growth rates to aid your purchasing decisions.
Main Activities, Attractions, and Employers in Texas
When assessing the potential of Texas real estate investment, consider the attractions, employers, and lifestyles that influence local economies in the state. This approach effectively spotlights properties with investment potential. Here are some employers and attractions that underscore the value of real estate in Texas:
NASA’s Johson Space Center (Houston)
This is a significant hub for space exploration in the USA and serves as a major attraction in Texas. Providing job opportunities and drawing in tourism that boosts the local economy, the center features interactive exhibits, artifacts, and behind-the-scenes tours. Moreover, it underscores Houston’s scientific and technological advancements, rendering the surrounding Houston area a top contender for real estate investment in Texas.
Also located in Houston, Rice University is renowned for its strong academic programs, rigorous research, and small class sizes. It consistently ranks among the top universities in the country year after year and has garnered widespread acclaim for its emphasis on research and innovation. Additionally, serving as a significant employer, the university presents considerable potential for real estate investment in Texas.
Other prestigious universities in the state include:
- University of Texas, Austin
- Stanford University
- Texas A&M University
- Southern Methodist University
Strong education prospects drive local economies and attract students and families alike, so they are a big draw for property investment in Texas.
Big Bend National Park
If you live in Texas, you are never too far from the iconic Big Bend National Park. Located in West Texas, this stunning park includes deserts, canyons, and mountains, attracting people interested in hiking, camping, bird watching, and stargazing. Remote and unspoiled, it is a unique piece of wilderness that inspires many people to move to the state just to be near it. Therefore, it can be a strategic advantage for property investment in Texas.
The AT&T Stadium, Arlington
Home to the Dallas Cowboys NFL team, this state-of-the-art stadium stands as one of the nation’s centers of sporting excellence. Beyond serving as a sports venue and home base for one of the most successful teams in NFL history, it is a contemporary architectural marvel featuring a retractable roof and an immense high-definition screen. With a seating capacity exceeding 100,000 people, it routinely hosts music concerts, international soccer matches, and more, adding to its allure for individuals considering a move to Texas.
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.”
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!
Long Term Rental
Investing Strategies in Texas
With its diverse markets and strong economic landscape, there are plenty of strategies for Texas real estate investment. Here are a few approaches that can work well:
Short-term Rentals: With so many tourist attractions and business centers in the state, Texas cities offer great opportunities for short-term rental. Platforms like AirBnB are good for this, but there are other approaches as well..
Buy and Hold: Purchasing properties to hold for the long-term can be particularly lucrative in Texas. Look for areas experiencing growth in terms of jobs and population. These can be rented out to tenants and then sold when their value has appreciated sufficiently.
Value-Add: Look for properties in need of renovations or upgrades. With an analytical approach, you can identify prospects with the greatest potential for returns to sell for a profit.
Land Development: Texas is growing apace, and investing in land for residential or commercial developments can be a profitable strategy in the long-term.
Whatever strategy you pursue, achieving success requires thorough planning and diligent research. Rely on trusted sources to analyze opportunities and conduct necessary investigations into specific properties to attain the best results with Texas real estate investment.
Is Texas a Good Real Estate Investment?
Texas real estate investment has the potential to be very lucrative if you make wise decisions. Throughout the state, there is a diverse range of employers and businesses of all sizes, attracting new residents who want to share in the prosperity. Some of the largest employers in Texas include:
ExxonMobil: As a significant player in the energy industry, ExxonMobil provides a multitude of employment opportunities in the state. With its headquarters located in Irving, Texas, the company employs thousands of individuals with diverse skill sets. This highlights the significance of the oil and gas sector for Texas real estate investment, although there are also numerous other flourishing industries in the state.
American Airlines Group: The headquarters of this aviation giant are in Fort Worth. American Airlines employs over 129,000 people worldwide, providing abundant job opportunities in Texas. These opportunities span various sectors, including technology, finance, marketing, and more, making it widely appealing and drawing numerous individuals to buy or rent, thereby creating real estate investment prospects in Texas.
Baylor Scott & White Health: This is a prominent and renowned healthcare system that operates numerous hospitals and employs many people throughout the state. It offers a wide range of treatments and is actively engaged in community outreach and wellness programs. It is recognized for its outstanding patient outcomes and commitment to excellence.
Advanced Micro Devices (AMD): A semiconductor company, AMD produces CPUs and GPUs and maintains a major office in Austin, TX. Being a leading name in its industry, AMD attracts professionals in the technology sector and has played a pivotal role in population and economic growth within the state. Opportunities in the tech sector are a compelling reason to consider real estate investment in Texas.