Purchasing real estate investment properties in the Texas housing market has long been considered a savvy investment move. Aspiring investors, homebuyers and tenants from all over the country have expressed sustained interest in Texas income-generating properties—and for good reason. Texas has upward-trending population rates, its laws are amenable to both investors and property owners and the economy is booming in key industrial sectors.
As the collective real estate market continues its gradual but steady recovery form the pandemic, property values have begun to creep up accordingly. The good news for those looking to invest in the Texas real estate market is that home prices have remained relatively affordable across the majority of the state. According to market data, the average going rate for an investment property in the Lone Star State is $326,404 ($149 per sq. ft.)—well under the national median. Additionally, the real estate appreciation rate is also trending upwards—with values rising 3.3% over the past 12 months and showing no signs of slowing down in the foreseeable future.
Another positive is the robust Texas economy, which has experienced exponential expansion over the past few years. The current economy is worth an approximate $1.6 trillion and continues to grow monthly, fueled by a diverse array of successful industrial sectors to include agriculture, mining and energy and world-class higher education options. The corporate-friendly environment and friendly tax legislation have motivated a number of Fortune 500 companies to relocate their headquarters to Texas—which means there is a steady influx of skilled workers in search of flexible and varied housing options in virtually every local market.
Now that we’ve made it exceedingly clear why Texas is a great option for real estate investors of all experience levels and budget, here is a closer look at some of the leading local markets in the state to help you solidify your investment strategy.
As opposed to the other major Texas real estate scenes, San Antonio has experienced a rise in home prices but is still affordable for the majority of the public. The 7% increase in home values over the course of the past year is an indication of high demand from both homebuyers and renters—and all signs point to continued appreciation for the foreseeable future. That means that whether you are looking for a single-family rental unit, fix-and-flip opportunities, rehabs to higher rental income brackets or subdividing, San Antonio truly has something to offer to everyone. The median home price has risen steadily for years on end because of the sustained population growth. The local economic conditions are outstanding, benefiting from a diversified scene of tourist attractions, major financial players and a substantial military presence—which has proven to be resilient to the widespread economic turbulence amidst the fallout from COVID-19.
Just like its sister urban center of Dallas, the Fort Worth area boasts a plethora of affordable opportunities to general passive real estate investment income. In conjunction with surrounding cities including Arlington and North Richland Hills, Fort Worth also offers lower property expenses on average than other neighborhoods surrounding the Dallas sprawl. Look for promising deals in Richardson, McKinney, Plano and Allen. These nice markets offer investors the coveted opportunity to tap into affordable properties in what has traditionally been a buyers’ market with optimal turnaround potential. Although Texas has some of the most pricy property taxes in the country, they are still significantly lower than California, New York and Washington, D.C. That’s mainly attributable to the fact that there is no state income tax. If overall housing costs are your primary concern, look for great listings in Garland, Richardson, Carrollton, and Dallas proper. These areas have some of the lowest vacancy rates in the entire state, which means that you can count on a steady stream of rental income or aspiring homebuyers.
If you are in need of a private money loan in Texas, let the team at Corridor Funding partner with you. We know the Texas market better than any other lender and would love to help you with your next loan.