which market Dallas, Vegas, Phoenix ?

Question

Hey guys I have been lagging for the last year to do action until today I finally picked up the phone and started calling and I think I'm ready to devote as much as I can and do the flip

so due to my capital limitation I can't do in LA the city I reside so I'm thinking about Vegas, Dallas or Phoenix.... I wanna pick either Vegas or Phoenix cuz it's closer and I can just drive there instead of Dallas since flying back forth can cost money

but it seems the market in Vegas isn't that good right now

what do you guys think ? any idea ?

Eric Fernwood · Answer

Hello @Amir Rahmani, I would compare all three cities based on the following criteria. Operating costs - Every dollar lost to operating costs is a dollar less for you to live on. Population growth - Never invest in a location where the population of the state or city is static or declining. Urban sprawl - Urban sprawl creates a situation where the growth of rent and property prices of existing properties is limited by the constant construction of new properties. Comparing these three criteria will provide a reasonable comparison of the three cities for long-term real estate investment. Operating Costs Operating costs are a direct impact on profitability. Choose a location with low operating costs to minimize overhead expenses and maximize profits. The three most apparent costs are income taxes, property taxes, and insurance. Below is a comparison of state averages. Note: In Arizona, I believe that there is no income tax if you own three or fewer rental properties. However, I included income tax in the comparison because the tax is minimal. Sources: State average insurance cost Average property tax State average income taxes To put this in perspective, below are the estimated annual operating costs for a $400,000 property in all three states. Conclusion: If you purchase in Texas, you will incur far more overhead and have a lower return than if you purchase in Arizona or Nevada. Population Growth Population growth tells you a lot about a location. If a significant number of people are moving into the location, everything is going reasonably well. If the population growth is static or negative, there are serious problems in a location should be avoided. How are these three cities performing? Below is the population change between 2020 and 2022. Phoenix: +2.26% Dallas: −0.37% Las Vegas: +2.24% Conclusion: The fact that Dallas is losing population would be a major concern for me. Prices and rents are driven by supply and demand, and where the population is falling, so is demand. Dallas does not seem like a good long-term investment location. Urban sprawl Urban sprawl is the unrestricted expansion of a city. Where there is unrestricted room for expansion, prices, and rents of existing homes rise slowly. If rents do not keep pace with inflation, your buying power will continue to increase and sooner or later you will be back on the daily with your treadmill. Below are links to time-lapse aerial views of the three cities Phoenix - Unlimited room for expansion so rents of existing properties will rise slowly. Dallas - Unlimited room for expansion so rents of existing properties will rise slowly. Las Vegas - Limited room for expansion. Las Vegas is a small island of private property in an ocean of federal land. Rents and prices of existing properties will rapidly due to limited supply. Conclusion: Based on the potential for urban sprawl, I believe that rent and price growth for existing properties will not keep pace with inflation in Dallas and Phoenix. However, due to the shortage of land and rising population in Las Vegas, rents should keep pace with inflation. Amir, I hope this is a good start for you.

Eric Fernwood · Answer

Reposting this time with images. :) Hello @Amir Rahmani, I would compare all three cities based on the following criteria. Operating costs - Every dollar lost to operating costs is a dollar less for you to live on. Population growth - Never invest in a location where the population of the state or city is static or declining. Urban sprawl - Urban sprawl creates a situation where the growth of rent and property prices of existing properties is limited by the constant construction of new properties. Comparing these three criteria will provide a reasonable comparison of the three cities for long-term real estate investment. Operating Costs Operating costs are a direct impact on profitability. Choose a location with low operating costs to minimize overhead expenses and maximize profits. The three most apparent costs are income taxes, property taxes, and insurance. Below is a comparison of state averages. Note: In Arizona, I believe that there is no income tax if you own three or fewer rental properties. However, I included income tax in the comparison because the tax is minimal. Sources: State average insurance cost Average property tax State average income taxes To put this in perspective, below are the estimated annual operating costs for a $400,000 property in all three states. Conclusion: If you purchase in Texas, you will incur far more overhead and have a lower return than if you purchase in Arizona or Nevada. Population Growth Population growth tells you a lot about a location. If a significant number of people are moving into the location, everything is going reasonably well. If the population growth is static or negative, there are serious problems in a location should be avoided. How are these three cities performing? Below is the population change between 2020 and 2022. Phoenix: +2.26% Dallas: −0.37% Las Vegas: +2.24% Conclusion: The fact that Dallas is losing population would be a major concern for me. Prices and rents are driven by supply and demand, and where the population is falling, so is demand. Dallas does not seem like a good long-term investment location. Urban sprawl Urban sprawl is the unrestricted expansion of a city. Where there is unrestricted room for expansion, prices, and rents of existing homes rise slowly. If rents do not keep pace with inflation, your buying power will continue to increase and sooner or later you will be back on the daily with your treadmill. Below are links to time-lapse aerial views of the three cities Phoenix - Unlimited room for expansion so rents of existing properties will rise slowly. Dallas - Unlimited room for expansion so rents of existing properties will rise slowly. Las Vegas - Limited room for expansion. Las Vegas is a small island of private property in an ocean of federal land. Rents and prices of existing properties will rapidly due to limited supply. Conclusion: Based on the potential for urban sprawl, I believe that rent and price growth for existing properties will not keep pace with inflation in Dallas and Phoenix. However, due to the shortage of land and rising population in Las Vegas, rents should keep pace with inflation. Amir, I hope this is a good start for you.

Alice Chen · Answer

Dallas, Vegas, Phoenix - I vote for Vegas. Reason is TX tax + insurance is too high. I own LTR in Houston and thinking about selling them all or at least turning them into MTR. Tired of fighting property tax with county every year. Phoenix - price and weather are both crazy. Vegas is always sweet with so many visitors and events. Lower house price, tax and insurance compared to Phoenix.

Bruce Lynn · Answer

Personally I think you can't go wrong in any of the 3 cities. Not sure what the dynamics are, but have heard there are some issues with Vegas. Not sure if that is true or not. Surprises me as it seems like business is coming back strong. Every weekend sold out, profits going back up for casinos after 2-3 tough years.https://www.reviewjournal.com/...I'm not in Vegas, but invested in Phoenix and Dallas. At some point I will leave PHX thinking about long term water issues. When you see the lake levels, that's a concern long term for me.

Account Closed · Answer

Phoenix is very competitive. Prepare to spend a lot of money. The 5 largest wholesalers in the country are in Phoenix. There must be a reason they have spread out to cities like Memphis, St Louis, Detroit and places like that.

Basit Siddiqi · Answer

Who cares that a market isin't doing that well now. That should actually be a good thing.You should care about where a market will be in 5, 10, 15 years from now.Real estate investing is a 'long-game'With that said - I pick Dallas, I think it has the strongest fundamentals out of each of the three cities mentioned.

Bob Stevens · Answer

Neither , investors from all those states in buying rentals in the Midwest, MUCH higher returns with much ,lower price points,

Susan Thelen · Answer

Hey there! Congratulations on taking the first step towards pursuing your flipping goals. It's great that you've started making calls and are ready to devote your time to this venture. Regarding your choice between Vegas, Dallas, and Phoenix, it's important to consider various factors before making a decision. While proximity and transportation costs are certainly valid concerns, it's crucial to also assess the overall market conditions and potential profitability in each location. You mentioned that the market in Vegas doesn't seem to be doing well at the moment. It's wise to take this into account, as a sluggish market could impact your ability to find suitable properties and sell them at a desirable price. However, real estate markets can be cyclical, and what might be true today may not necessarily hold true in the future. It could be worth researching further to see if there are any indicators of improvement or potential opportunities in the Vegas market. On the other hand, Phoenix might be worth considering as well. While it may require a longer drive compared to Vegas, if the market conditions in Phoenix are more favorable, it could potentially offer better investment opportunities and higher returns on your flips. Researching market trends, supply and demand dynamics, and economic factors in Phoenix can help you gain a clearer understanding of its potential for success. We only have about 7,000 SFH's on the market right now and a lot of the investors I work with are having a hard time making the numbers work. As for Dallas, although flying back and forth can incur costs, it could still be worth exploring if the market conditions are strong and the potential profit outweighs the travel expenses. Dallas has experienced growth in recent years and has a robust real estate market, which could present enticing opportunities for flipping properties. Ultimately, it's crucial to conduct thorough research, gather local market insights, and consult with real estate professionals in each of the locations you're considering. They can provide you with valuable advice and help you make an informed decision based on your budget, goals, and the specific conditions of each market. Best of luck with your flipping journey, and I hope you find the ideal location to kickstart your real estate endeavors!

Lucia Rushton · Answer

what are you looking for? what is your buybox?

Jennifer Volek · Answer

I am from Vegas and I am honestly shocked at the home values nowadays. I currently live in and invest in DFW, if you would like to chat about real estate feel free to connect with me. I am an active realtor.