Attention: Texas Real Estate Investors!

[Jessica Cooper]

Texas real estate investors, I have question about the Texas real estate market.

I am looking into investing in some real estate in Texas (Austin, Dallas/Ft. Worth, San Antonio). But would like to get some insight and details about that market as I live in the Denver area and will be long-distance investing. 

First, the basics:  

   Where are you investing? 

   Are you investing in Single/Multi-family homes or other?

   How are the property taxes, insurance? How much do they change the strategy for investing. (ex: if investing in FL, its strongly encouraged to consider getting/having flood insurance. Which adds (Range per year) to account for when analyzing investment properties.) 

Second, more in depth:

   What are the down sides (if any), for investing in the Texas market? 

   What are the up sides for investing in the Texas market?

   Depending on where you're investing, is there areas that are hotter than others? 

   Depending on where you're investing, is there any areas that are not investing worthy?     

I appreciate any information. 

[Joe Funari]

@Jessica Cooper I personally invest in the Dallas/Ft. Worth area in both single and multifamily homes. I also help other investors buy & sell in the area too. Property taxes are high compared to other parts of the country. But I always advocate to my clients to protest tax valuations every year as they get reassessed annually. I go into more details about strategies to protest with my clients as well. Landlord policies are averaging around $1800 per year for a SFR. But you only need flood insurance here if a property is in a flood plain per FEMA. But so many properties available right now that are not in a flood plain. So easy to avoid the additional expense. Only complaint others have about investing here is the property taxes. Upside is rents increase every year from $25 to $125 per month, valuations increase steadily, and Dallas/Ft. Worth has a diverse of industries here. So less impact on job market if one industry goes down. There are always good & bad areas to invest in any market. Which is why you should work with a realtor, and preferably, a fellow investor to help you find rentals in areas that have decent rental returns, etc. Especially if you are investing out of state.

[Charles Holder]

Quote from @Jessica Cooper:

Texas real estate investors, I have question about the Texas real estate market.

I am looking into investing in some real estate in Texas (Austin, Dallas/Ft. Worth, San Antonio). But would like to get some insight and details about that market as I live in the Denver area and will be long-distance investing. 

First, the basics:  

   Where are you investing? 

   Are you investing in Single/Multi-family homes or other?

   How are the property taxes, insurance? How much do they change the strategy for investing. (ex: if investing in FL, its strongly encouraged to consider getting/having flood insurance. Which adds (Range per year) to account for when analyzing investment properties.) 

Second, more in depth:

   What are the down sides (if any), for investing in the Texas market? 

   What are the up sides for investing in the Texas market?

   Depending on where you're investing, is there areas that are hotter than others? 

   Depending on where you're investing, is there any areas that are not investing worthy?     

I appreciate any information. 

Hello Jessica! you asked some good questions but their is going to be so much variance.

I live and invest in San antonio. I like the area because you get modest appreciation while still managing some cash flow. You can pivot based off the neighborhoods whether you want more appreciating deals or better cash flow, I have a mixed portfolio worth about 2.5m.

Let's chat i'd love to help guide you and possibly serve you with your real estate needs. My pleasure!

[Timothy G Dunson]

Quote from @Jessica Cooper:

Texas real estate investors, I have question about the Texas real estate market.

I am looking into investing in some real estate in Texas (Austin, Dallas/Ft. Worth, San Antonio). But would like to get some insight and details about that market as I live in the Denver area and will be long-distance investing. 

First, the basics:  

   Where are you investing? 

   Are you investing in Single/Multi-family homes or other?

   How are the property taxes, insurance? How much do they change the strategy for investing. (ex: if investing in FL, its strongly encouraged to consider getting/having flood insurance. Which adds (Range per year) to account for when analyzing investment properties.) 

Second, more in depth:

   What are the down sides (if any), for investing in the Texas market? 

   What are the up sides for investing in the Texas market?

   Depending on where you're investing, is there areas that are hotter than others? 

   Depending on where you're investing, is there any areas that are not investing worthy?     

I appreciate any information. 

I am a San Antonio realtor and investor. I like NE San Antonio because that is the direction Austin is in. I preach about this regularly to people looking to invest in Texas and San Antonio ore specifically. Austin is only about 45 minutes from the outer NE edge of San Antonio. I am a big believer that as the major cities in Texas grow they will grow fastest towards each other. There is a reason they call it the Texas triangle. Dallas, Austin, San Antonio, Houston. 

These are all major cities so any strategy can work in any of these cities. The numbers just need to work. San Antonio specifically is know for STR. I am buying SFR long term rentals personally. Let's connect so I can show you my off market inventory!

[Timothy G Dunson]

Quote from @Charles Holder:

Quote from @Jessica Cooper:

Texas real estate investors, I have question about the Texas real estate market.

I am looking into investing in some real estate in Texas (Austin, Dallas/Ft. Worth, San Antonio). But would like to get some insight and details about that market as I live in the Denver area and will be long-distance investing. 

First, the basics:  

   Where are you investing? 

   Are you investing in Single/Multi-family homes or other?

   How are the property taxes, insurance? How much do they change the strategy for investing. (ex: if investing in FL, its strongly encouraged to consider getting/having flood insurance. Which adds (Range per year) to account for when analyzing investment properties.) 

Second, more in depth:

   What are the down sides (if any), for investing in the Texas market? 

   What are the up sides for investing in the Texas market?

   Depending on where you're investing, is there areas that are hotter than others? 

   Depending on where you're investing, is there any areas that are not investing worthy?     

I appreciate any information. 

Hello Jessica! you asked some good questions but their is going to be so much variance.

I live and invest in San antonio. I like the area because you get modest appreciation while still managing some cash flow. You can pivot based off the neighborhoods whether you want more appreciating deals or better cash flow, I have a mixed portfolio worth about 2.5m.

Let's chat i'd love to help guide you and possibly serve you with your real estate needs. My pleasure!

 Hahaha Hey Charles. Just got off the phone with you. Let's connect

[Jessica Cooper]

Quote from @Joe Funari:

@Jessica Cooper I personally invest in the Dallas/Ft. Worth area in both single and multifamily homes. I also help other investors buy & sell in the area too. Property taxes are high compared to other parts of the country. But I always advocate to my clients to protest tax valuations every year as they get reassessed annually. I go into more details about strategies to protest with my clients as well. Landlord policies are averaging around $1800 per year for a SFR. But you only need flood insurance here if a property is in a flood plain per FEMA. But so many properties available right now that are not in a flood plain. So easy to avoid the additional expense. Only complaint others have about investing here is the property taxes. Upside is rents increase every year from $25 to $125 per month, valuations increase steadily, and Dallas/Ft. Worth has a diverse of industries here. So less impact on job market if one industry goes down. There are always good & bad areas to invest in any market. Which is why you should work with a realtor, and preferably, a fellow investor to help you find rentals in areas that have decent rental returns, etc. Especially if you are investing out of state.

Are there any areas in the DFW area that is becoming too saturated with investors? Landlord policies for SFR is $1800/year. How much of a difference from the SFR to a multifamily? 

[Jessica Cooper]

Quote from @Charles Holder:

Quote from @Jessica Cooper:

Texas real estate investors, I have question about the Texas real estate market.

I am looking into investing in some real estate in Texas (Austin, Dallas/Ft. Worth, San Antonio). But would like to get some insight and details about that market as I live in the Denver area and will be long-distance investing. 

First, the basics:  

   Where are you investing? 

   Are you investing in Single/Multi-family homes or other?

   How are the property taxes, insurance? How much do they change the strategy for investing. (ex: if investing in FL, its strongly encouraged to consider getting/having flood insurance. Which adds (Range per year) to account for when analyzing investment properties.) 

Second, more in depth:

   What are the down sides (if any), for investing in the Texas market? 

   What are the up sides for investing in the Texas market?

   Depending on where you're investing, is there areas that are hotter than others? 

   Depending on where you're investing, is there any areas that are not investing worthy?     

I appreciate any information. 

Hello Jessica! you asked some good questions but their is going to be so much variance.

I live and invest in San antonio. I like the area because you get modest appreciation while still managing some cash flow. You can pivot based off the neighborhoods whether you want more appreciating deals or better cash flow, I have a mixed portfolio worth about 2.5m.

Let's chat i'd love to help guide you and possibly serve you with your real estate needs. My pleasure!

Is your portfolio all in San Antonio? or is it spread out in the larger San Antonio area and other places as well. Does having a military base in that area help with cash flow in appreciation?

[Jessica Cooper]

Quote from @Timothy G Dunson:

Quote from @Jessica Cooper:

Texas real estate investors, I have question about the Texas real estate market.

I am looking into investing in some real estate in Texas (Austin, Dallas/Ft. Worth, San Antonio). But would like to get some insight and details about that market as I live in the Denver area and will be long-distance investing. 

First, the basics:  

   Where are you investing? 

   Are you investing in Single/Multi-family homes or other?

   How are the property taxes, insurance? How much do they change the strategy for investing. (ex: if investing in FL, its strongly encouraged to consider getting/having flood insurance. Which adds (Range per year) to account for when analyzing investment properties.) 

Second, more in depth:

   What are the down sides (if any), for investing in the Texas market? 

   What are the up sides for investing in the Texas market?

   Depending on where you're investing, is there areas that are hotter than others? 

   Depending on where you're investing, is there any areas that are not investing worthy?     

I appreciate any information. 

I am a San Antonio realtor and investor. I like NE San Antonio because that is the direction Austin is in. I preach about this regularly to people looking to invest in Texas and San Antonio ore specifically. Austin is only about 45 minutes from the outer NE edge of San Antonio. I am a big believer that as the major cities in Texas grow they will grow fastest towards each other. There is a reason they call it the Texas triangle. Dallas, Austin, San Antonio, Houston. 

These are all major cities so any strategy can work in any of these cities. The numbers just need to work. San Antonio specifically is know for STR. I am buying SFR long term rentals personally. Let's connect so I can show you my off market inventory!

That Texas Triangle makes sense. It seems like a lot of the real estate is in the more eastern and some southern parts of the state. Leaving places like El Paso and Amarillo as less desirable correct? 

I'm curious at to how the Tesla headquarters moving to TX has impacted the real estate market, esp in the Austin area? I'm strongly considering Austin as the first place to look and start investing in TX RE.. 

[Wale Lawal]

@Jessica Cooper

Investing in Texas real estate presents a lucrative opportunity, but requires careful evaluation of market dynamics, property taxes, and insurance costs. Austin, Dallas/Ft. Worth, and San Antonio are popular markets due to their tech sector, diverse economy, and job growth. However, areas like Austin, Dallas/Ft. Worth, and San Antonio may not be investing-worthy due to high property taxes and insurance costs.

Good luck!

[Justin Brickman]

I'm investing in San Antonio, Currently have a handful of single family houses that I use for MTR/STR.

Pros of investing in San Antonio - High potential for appreciation. High potential to cash flow early. Also, there are many different areas of San Antonio to invest because of the many military bases, hospitals and great schools. 

Cons - Texas Property Taxes are a bit higher than most

[Jessica Cooper]

Quote from @Wale Lawal:

@Jessica Cooper

Investing in Texas real estate presents a lucrative opportunity, but requires careful evaluation of market dynamics, property taxes, and insurance costs. Austin, Dallas/Ft. Worth, and San Antonio are popular markets due to their tech sector, diverse economy, and job growth. However, areas like Austin, Dallas/Ft. Worth, and San Antonio may not be investing-worthy due to high property taxes and insurance costs.

Good luck!

 Are there any areas you would recommend looking into that are not in those areas?

[Jessica Cooper]

Quote from @Justin Brickman:

I'm investing in San Antonio, Currently have a handful of single family houses that I use for MTR/STR.

Pros of investing in San Antonio - High potential for appreciation. High potential to cash flow early. Also, there are many different areas of San Antonio to invest because of the many military bases, hospitals and great schools. 

Cons - Texas Property Taxes are a bit higher than most

 How are the property taxes in San Antonio difference than the other cities? 

[Jordan Moorhead]

Texas is as big as Europe, every market is so different!

[Joe Funari]

@Jessica Cooper there are no areas that are "too saturated" with investors here. There are plenty of properties to pick from that meet the criteria for a good investment property here. Any given time I can find some +150 SFR's for my clients to choose from. A lot of new construction and steady growth ensure the demand for both investors and owner occupants are met. Regarding multifamily insurance it varies greatly the price depending on the number of doors, age, and location. Too many variables to pin down a number. But you can get a quote once you go under contract. I recently purchased a duplex and the landlord policy $3K per annum.

[Bruce Lynn]

I have always said look around the outskirts of the big cities....where the growth is happening.  Most of the opportunity seems to lie just outside of the big circles around the main part of the cities you mention.  I've lived in all 3.  Long term realtor/broker/investor.  I don't look at San Antonio or Austin.  Not that they're bad, just not on my radar.

Invest in what works for you. We could say multi is your best ROI, but if you don't have the cash for that, then it doesn't matter. Start small and work your way up.

Be prepared to put down 30/40% of the purchase price right now to have them break even and/or cash flow a bit.  Rents will probably start to go up in 2025/2026 when we burn off some of the new build multi-units, but rent/price ratio is not great today.  Prices have gone up faster than rents.  Add in interest, taxes, insurance and you just need higher down payments.

I'm thinking taxes and insurance have gone up almost everywhere.  It's an issue and things like deductibles are increasing...so higher costs/less coverage.  Roofs may not get full replacement cost if they are older than 10 years.  Maybe older than 15 years you may not get any roof coverage.  Just have to shop and watch that.  As my CPA says though...bad news is you're paying more taxes, good news is, it is because you made more money, or I guess on the property side you achieved appreciation.

Downsides-cost of entry higher than some parts of the country.  We don't have a lot of small multifamily.

Upside-Landlord friendly, great growth, diversified economy, great central location, business friendly environment, no state taxes, population growth, job growth, probably wage growth.  Typically no flood insurance needed depending on where you buy.  I'd suggest staying away from properties that need flood insurance here.  Plenty of other choices.

I'd be looking at Sherman/Denison in Grayson County.  Probably a bit early, but I'd also be looking at Wise County and Parker County-Decatur and Weatherford are the bigger cities.  Maybe general Cleburne area in Johnson County.

Why are you looking at Texas and Florida vs Colorado.  Although it does look like we just got the TIAA move from Denver to Frisco.  Looks like 1000 jobs over 2-3 years might move.

I would say some of the popular areas of the past are saturated with investors...places like McKinney, Frisco, Keller, Princeton. One time over the past year there were nearly 1000 houses for rent in Frisco/Plano/McKinney. That's just too many and you have too many investors that don't care about yield, just asset parking and following the crowd.  I get way too many calls telling me their friend told them to invest in a certain city or neighborhood, but they haven't done any analysis or put any thought into it.

Seeing some of your other responses...Austin will be very hard to make your numbers work.  Super high prices, but rents haven't kept up.

[Joe S.]

Sounds like you made some connection with realtors though. I think some of them could actually help you. 
Best regards.

[Jessica Cooper]

Quote from @Bruce Lynn:

I have always said look around the outskirts of the big cities....where the growth is happening.  Most of the opportunity seems to lie just outside of the big circles around the main part of the cities you mention.  I've lived in all 3.  Long term realtor/broker/investor.  I don't look at San Antonio or Austin.  Not that they're bad, just not on my radar.

Invest in what works for you. We could say multi is your best ROI, but if you don't have the cash for that, then it doesn't matter. Start small and work your way up.

Be prepared to put down 30/40% of the purchase price right now to have them break even and/or cash flow a bit.  Rents will probably start to go up in 2025/2026 when we burn off some of the new build multi-units, but rent/price ratio is not great today.  Prices have gone up faster than rents.  Add in interest, taxes, insurance and you just need higher down payments.

I'm thinking taxes and insurance have gone up almost everywhere.  It's an issue and things like deductibles are increasing...so higher costs/less coverage.  Roofs may not get full replacement cost if they are older than 10 years.  Maybe older than 15 years you may not get any roof coverage.  Just have to shop and watch that.  As my CPA says though...bad news is you're paying more taxes, good news is, it is because you made more money, or I guess on the property side you achieved appreciation.

Downsides-cost of entry higher than some parts of the country.  We don't have a lot of small multifamily.

Upside-Landlord friendly, great growth, diversified economy, great central location, business friendly environment, no state taxes, population growth, job growth, probably wage growth.  Typically no flood insurance needed depending on where you buy.  I'd suggest staying away from properties that need flood insurance here.  Plenty of other choices.

I'd be looking at Sherman/Denison in Grayson County.  Probably a bit early, but I'd also be looking at Wise County and Parker County-Decatur and Weatherford are the bigger cities.  Maybe general Cleburne area in Johnson County.

Why are you looking at Texas and Florida vs Colorado.  Although it does look like we just got the TIAA move from Denver to Frisco.  Looks like 1000 jobs over 2-3 years might move.

I would say some of the popular areas of the past are saturated with investors...places like McKinney, Frisco, Keller, Princeton. One time over the past year there were nearly 1000 houses for rent in Frisco/Plano/McKinney. That's just too many and you have too many investors that don't care about yield, just asset parking and following the crowd.  I get way too many calls telling me their friend told them to invest in a certain city or neighborhood, but they haven't done any analysis or put any thought into it.

Seeing some of your other responses...Austin will be very hard to make your numbers work.  Super high prices, but rents haven't kept up.

That's is great information. Thank you for that insight.

I am interested in Florida as its where I would like to move to in time. Florida and Texas are cheaper than Colorado. The cost of living in Colorado let alone the bar of entry to a house is too high. I want to start in places that are cheaper. Also considering Tennessee, South Carolina and Georgia. 

[Rick Pozos]

Hey @Jessica Cooper you would probably need to pin down a state, then a city or region first. Major cities of Texas is just too broad to even think about, now you say you want to look at Florida, Tennessee, S Carolina and Georgia. WOW. 

You should go visit the areas where you might want to own property. Talk to some local investors and/or agents there. THEN start to ask questions about THAT area. There is so much variance of tax rates, insurance rates, should the house have a basement, foundation issues, do I need a 1in copper water line or is pex better for the climate, etc. Who has a septic as opposed to city sewer and why. Too many differences that you dont even know to ask about. Pick an area, go there and see if you like it, then start to decide.

[Julien Payne]

Quote from @Justin Brickman:

I'm investing in San Antonio, Currently have a handful of single family houses that I use for MTR/STR.

Pros of investing in San Antonio - High potential for appreciation. High potential to cash flow early. Also, there are many different areas of San Antonio to invest because of the many military bases, hospitals and great schools. 

Cons - Texas Property Taxes are a bit higher than most

Hello, just jumping in on this apologies, if Texas taxes are prohibitive, what states are not and does it make a difference where the LLC is registered or not? as in, are Texas taxes just high regardless of where the LLC is registered, Delaware for example? Thank you