The best cities in Texas for rental property owners
Texas Housing - June 10, 2019
At least for the last decade, if not longer, the state of Texas has been in a boom and growth in terms of population and business prosperity. Demand for single-family homes in Texas has been rising for quite some time. And, despite the fairly low housing prices across the state, many housing seekers prefer to rent rather than buy. As a result, rental rates are rising. And Texas has many factors attracting Americans who want to relocate. Perhaps the main advantage is the lack of income tax. But, what are the best cities in Texas for rental property owners? We’ve got you covered.
How to find the best cities in Texas for rental property owners?
In the real estate business, the most important thing is the location. Today we will discuss the key factors to find the ideal rental area.
Where to buy – near or far?
Most owners of rental properties buy within 30 minutes from their own homes. This has its advantages. You know the area well, you can visit the property. And if you do not want to hire a property manager, you are close enough to handle the situation yourself.
There are also risks and disadvantages. If you live in an expensive area, you cannot afford as much real estate as you would like to have. You are also more vulnerable to economic and weather events. If there is a big recession in the local economy or a natural disaster, your investment is vulnerable because you have all your eggs in one basket.
Cash flow or appreciation?
In determining the area for investment, you should consider your goals. Before you hire movers Lockhart Texas, think about it: are you more interested in cash flow or appreciation? Cash flow means that you immediately earn on the property: the rent is higher than your expenses, including the mortgage. Appreciation means that the house will acquire more value during the period.
If you are looking for cash flow, you need to look for a less expensive home in less expensive markets. The price to rent ratio would be better for cheaper homes in less affluent areas. If you want to evaluate, your investment will be long term. You will not make money right away. But the property will usually be newer, easier to manage because it will not require a lot of repairs. And the tenants will usually stay longer.
Another factor to consider is the vacancy. How long is a property in the area usually empty between tenants? You must set aside 5-7% of the monthly rent for the duration of the vacancy. It turns out about one month of no rental income every two years. Local property managers can get these numbers. Requiring notification from 60-90 days from your tenants and charging a fine, if they do not provide, can help protect you from a long vacancy.
Here’s a look at the best cities in Texas for rental property owners
Fort Worth is one of the major twin cities of Texas, located next to Dallas, just a few miles from the Trinity River. It has many features that make it conducive to owning rental property. The population of Fort Worth has grown by about 6% from 2010 to 2018 and by 48% since 2000, when its population was only 534,694 people, compared with 792,700 by 2018. In addition, the average price of housing is about $255,000, which is conveniently less than the average for the United States. No wonder more and more people are hiring long distance movers Texas and moving to Fort Worth.
Another great advantage for potential owners of rental properties in Fort Worth: there are several colleges in the area. College students are a profitable segment for rental property owners, especially because their parents – and their much more substantial wealth – are paying for renting for their children. Because of this, property owners may charge a higher rent due to the almost insatiable demand for housing for students. For example, the zip code 76109 in Fort Worth, which surrounded Texas Christian University, has an average rent of $2,874.
Garland, Texas, has several critical factors that make a large rental market: reliable performance and population growth. As well as excellent accessibility for potential investment owners. The population in Garland has grown by almost 5% since 2018 and by 10% since the beginning of the millennium. In addition, the average price of a house is $219,999, which is $50,000 cheaper than the national average, and great for potential property owners.
A key factor to keep in mind is that Garland’s average income is lower than the average for the United States. In addition, in terms of the distribution of wages, 16% of incomes range from $20,000 to $30,000, and the cost of living in Texas is not that low, which can make home ownership a much less attractive option while renting becomes even more significant.
Arlington is also located in the Dallas-Fort Worth metro area. Thus, Arlington benefits from the general population. And the economic recovery that the metro area and Texas as a whole are experiencing.
Like Fort Worth, Arlington has its share of colleges to lure tenants with money who pack for college and come to the city. Perhaps the most notable of these is the University of Texas at Arlington, which also boasts a modern planetarium. Other geographic bonuses include the AT & T Stadium, where the Dallas Cowboys play their home games, and Lake Arlington. The population of Arlington has grown significantly over the years. In 2010, the population of Arlington was 332,969 people. And in 2018, it exceeded 390,000 people, which is 18% over eight years. With so many people in the city, Arlington is one of the best cities in Texas for rental property owners.