Buying Investment Properties in Dallas

Is it a good time to invest in Dallas?

Are you a first-time investor looking to buy investment properties in Dallas? If you are undecided then know that this is a good time to invest in real estate. The mortgage rates are still at historic lows; the housing market as a whole is still vastly undersupplied.

Home sales in 2021 were even better than pre-pandemic levels and the market has only emerged stronger since the pandemic which alludes to the confidence that both the end-users and investors have in the resilience of the housing market.

Prices might be on the higher side now but you stand to lose more by not having your money invested. Let us explain, by losing out on time value of money, eg; you would miss out on collecting rents, than what you might gain by waiting for the prices to correct and trying to time the market.

There is an optimistic outlook for 2022 and home prices are expected to rise 8-15% year-on-year in hot property markets across the country that have thriving populations ^[1]. So is Dallas one of those hot markets? Read on to find out more.

Real estate investment metrics for Dallas:

Here are some metrics that you should be looking at before deciding whether Dallas is a hot market that is worthy of your investment dollars.

Currently in Dallas, the median home price is $ 290564^[2] and the median rent for 2 bedroom household is $ 2320 per month ^[3]. This data also gives a fair estimate of how much cash flow you can expect for the median sized property. The vacancy rate as of September 2021 in Dallas is 6.2 %^[4].

Using this data, you can estimate whether you would have a positive or a negative net cash flow through the year after accounting for maintenance, insurance, taxes and mortgage payments if any. Keep in mind that the data shown here is only for the median sized property. Rental yields can vary widely within the same city. They tend to increase towards the lower end of the market and as you go towards the higher end of the market, the rental yields generally tend to decrease.

Making any investment in properties in Dallas – Fort Worth metroplex also involves understanding the socio-economic vibrancy of the region. In 2016, the Dallas–Fort Worth metroplex had the highest annual population growth in the United States. If the Dallas–Fort Worth metroplex were a sovereign state, it would have the twentieth largest economy in the world as of 2019 ^[5]. Only a thriving region can ensure that your investment appreciates in value. As more and more people move into the region, simply because they find it desirable to work and live, the demand for housing goes up and most often that leads to home price appreciation. So ultimately the metrics that decide whether a market is going to be hot or not are employment growth rate, population growth rate, local household income and unemployment rate. Compare these metrics for the region with those of the nation’s and you will get an idea. We have done this for you.

	Dallas	USA overall
Employment growth rate [6] (2021 vs 2020)	6.3 %	6.7 %
Population growth rate [7] (2010-2020)	19.96 %	7.1 %
Household income [8] (Annual)	$ 65770	$ 67521
Unemployment rate [9] (as of 2021)	4.2 %	4.3 %

For investing in Dallas, you could consider the following neighborhoods for investment based on your price preference. These neighborhoods are the fastest growing in Dallas region.

Price level
Price level	Recommended Neighborhoods
Low	Mesquite
Medium	Fort Worth, Dallas
High	Frisco, McKinney

If you would like to see all of this information in one place then look no further than LitPoodle. In addition to offering this information for every single property listing, LitPoodle crunches numbers to show you the implications of these metrics. For example, you can see projected cash flows for any property for 30 years; you can compare the estimated performance of investment property with that of stocks, bonds, etc.

So once you have this data, how do you go about making the right investment? Let’s head to the next section to find out.

General Real Estate Investing Tips

While you invest in real estate, keep in mind that it is a long process often spanning months. You have to look out for minor errors you may overlook during this tedious process. These avoidable minor mistakes, if not identified, often snowball into major problems at the end of the process – at a stage when it’s too late to turn back.

As you navigate through this journey it’s important to stay prepared, be informed, and adapt.

At LitPoodle, our aim is to simplify real estate investing for first-time investors. This includes keeping you informed about common investing mistakes you can avoid. So here’s our quick guide to everything you should consider to avoid traps/mistakes while investing in real estate.

If you are completely new to any kind of real estate buying, then take a look at this blog. This is our quick guide to newbies who are considering dipping their toes in the real estate market.

You might also benefit from understanding the financial mechanisms that underlie the real estate investing process by perusing this blog. Should any of the real estate jargon confuse you, then here is a quick guide to the industry lingo.

We share this information with you because LitPoodle’s philosophy is based on ‘access. We want to democratize investing for the average investor. Empowering investors with knowledge is the best way to ensure that folks feel confident and not intimated when investing. From breaking down jargon to helping you manage your investment, our platform offers it all in one place. Empower the investor in you with LitPoodle.

Sources:

1. Year on Year Home Price Trend: https://www.noradarealestate.com/blog/housing-market-predictions/
2. Median Home Price as of November 2021: https://www.zillow.com/
3. Median Rent as of September 2021: https://www.apartmentlist.com/
4. Vacancy Rate as of September 2021: US Census Bureau
5. Metro Area Data: https://en.wikipedia.org/wiki/Dallas%E2%80%93Fort_Worth_metroplex
6. Employment Growth Rate (June 2021 vs June 2020): US Bureau of Labor Statistics
7. Population Growth Rate (2010-2020): US Census Bureau
8. Household Income (Annual): fred.stlouisfed.org
9. Unemployment Rate as of October 2021: US Bureau of Labor Statistics

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