Plano, Texas and Collin County Rental Market

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Plano, Texas and Collin County Rental Market

Laurie Williamson
Rental Property Investor · Plano, TX · Member since 2014 · 54 posts · 19 votes

Hey guys! Anyone here have SFH rentals in Plano, Texas? Or, in McKinney, Frisco, Allen or Little Elm? I would love to hear about your experience. I live in Plano and want to buy a rental property that's nearby, in Plano or at least in Collin County. I am specifically curious about how quickly you're able to fill vacancies, if you're getting good tenants, and if you're able to get what you're asking for in terms of rent, or if you're having to lower it to get tenants. Also wondering if any one of the cities listed above is a better rental market than another. They all look like they are getting good rent rates per the MLS...just not sure how long they are sitting on the market before being rented.

More info: I am looking for a 3-bedroom, 2-bath home with a 2-car garage, between 1500-2500 square feet, built 1970 or after. Price range between $300-$365,000. I am selling a rental property in Garland, Texas, with similar specs, except it was built in 1956, and I am doing a 1031 exchange. I never had any trouble keeping my Garland rental occupied, so I know that demand there is high. It was also generally profitable... but older properties need a lot of TLC, and after moving to Plano, we don't like driving out there anymore. I am hoping that replacing that house with a newer property that is closer to home will minimize maintenance hassles. Also may have more appreciation over on this side of town. Thankful for any insights!

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Paul Blair
Real Estate Broker · Dallas TX · Member since 2021 · 27 posts · 11 votes
4y

Hi, We help many investors look into these cities for rentals. As for finding tenants, there has been no issues, plenty of renters have been moving to the area. You can get a market value for the rental, the only reason you'd have to lower your price would be that you are asking too much. All of those cities have good reasons to have SFR, just know cash flow may be limited at first, with appreciation to be really good.

If you need help please reach out. Good luck 

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  • Paul Blair
    Real Estate Broker · Dallas TX · Member since 2021 · 27 posts · 11 votes
    4y

    Hi, We help many investors look into these cities for rentals. As for finding tenants, there has been no issues, plenty of renters have been moving to the area. You can get a market value for the rental, the only reason you'd have to lower your price would be that you are asking too much. All of those cities have good reasons to have SFR, just know cash flow may be limited at first, with appreciation to be really good.

    If you need help please reach out. Good luck 

    1Reply
  • Philip M.
    Rental Property Investor · Garland · Member since 2018 · 38 posts · 22 votes
    4y

    I have several rentals and find that one of the most important steps is doing credit and background check. I use Mr. Landlord because they have a good service and it is reasonably priced. Reach out to me (BP connect) if you would like more info about it.

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  • Tyler HodgsonBusiness Member
    Investor · Flower Mound, TX · Member since 2016 · 245 posts · 192 votes
    4y

    @Laurie Williamson - you should have no issues with vacancies (really anywhere in DFW). The rental market is just as lopsided as the buying market right now (in favor of landlords/sellers vs. renters/buyers). In Little Elm, The Colony, and McKinney you'll probably find more older properties of the characteristics and price range you described. Frisco and Allen might be a little more expensive. Have an agent pull some rental comps for you to get average days on market, but I'm sure you'll find they are all very low across the board. There are lots of great agents here on BP, I'm happy to recommend some if you want to message me. 

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  • Bruce Lynn
    Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
    4y

    I'd look further north to Celina, Melissa, Anna.  Probably get newer homes for the same price as older homes in Plano.

    2021 was amazing year for most owners....big prices increase, big rent jumps.  I think all the rentals I had up I had over 200 phone calls.  DOM doesn't tell you everything though.  Depends on the rent you're asking, condition of the home, what terms you want...easier to rent 1 year vs mandating 2 or 3.  Many people building and only want a year or shorter term.  Many people think they want to buy vs rent...even though that may not be realistic.   Some owners setting higher standards to hopefully get better tenants, no pets or super high pet deposits, higher rents, higher credit scores, etc.

    Most of these areas are very school driven though.  This year probably doesn't matter, but in the past seems like easier to rent in Summer while school is out vs February when people don't really want to change schools.  This year has been different with lots of parents keeping kids home, more people home schooling, and just plain shortage of housing and rentals.

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  • Laurie Williamson
    OP
    Rental Property Investor · Plano, TX · Member since 2014 · 54 posts · 19 votes
    4y

    @Paul Blair, thank you so much for that info! Exactly what I was hoping to hear.

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  • Laurie Williamson
    OP
    Rental Property Investor · Plano, TX · Member since 2014 · 54 posts · 19 votes
    4y

    @Philip M., thank you so much for that suggestion. I will definitely check out Mr. Landlord! That would be super helpful once I get the next property purchased. For my rental in Garland, I had a property manager place the tenant, then I took over management. Tenant ended up staying nearly 6 years, so I have never had to place a tenant myself!

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  • Laurie Williamson
    OP
    Rental Property Investor · Plano, TX · Member since 2014 · 54 posts · 19 votes
    4y

    @Tyler Hodgson, thanks so much for the intel. That is good news. You're right; I'm barely seeing anything in Frisco and Allen, but there are 1 or 2 that come up in the search. Good advice on the agent pulling comps. Will have my Realtor do that.

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  • Laurie Williamson
    OP
    Rental Property Investor · Plano, TX · Member since 2014 · 54 posts · 19 votes
    4y

    @Bruce Lynn, Thank you for the suggestion! I know those areas are really growing. I think you're absolutely right on those reasons why tenants aren't biting on some homes with more DOM. That is really helpful. My last property I said no pets, but they got a pet anyway, so I think that requirement may be futile. May try something different this time, like a pet deposit or just looking for a place with tile floors.

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  • Michael W. McCord
    Rental Property Investor · El Paso, TX · Member since 2018 · 82 posts · 49 votes
    4y

    I would consider a higher end rental which seems to be grossly underserved and large demand in north DFW. I recently purchased a SFR in Richardson which was a little expensive at 600k but I found a high quality tenant very quickly. Cash flowing 800 / mo after PITI, prop mgt and 5% capex. No complaints and they really take care of the place.

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  • Laurie Williamson
    OP
    Rental Property Investor · Plano, TX · Member since 2014 · 54 posts · 19 votes
    4y

    @Michael W. McCord, that is interesting! Someone in our neighborhood recently moved and put their home up for rent, and it is probably a $750+ home... we were wondering who could afford to rent it! I did not really get it until I went out and started actually looking for houses to buy last weekend. It is nuts. If smaller homes are going for the sales prices they are, and renting for the #s I am seeing, it makes sense that the higher-end homes would go for a lot more. Glad you are finding success with your new SFR!

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  • Laurie Williamson
    OP
    Rental Property Investor · Plano, TX · Member since 2014 · 54 posts · 19 votes
    4y

    I want to update this thread for anyone following it to get info on the local market. It is crazy!! I mean, I already kinda knew that, but it's one thing to search the MLS and crunch numbers in a spreadsheet, and another thing entirely to go out and look at houses with your Realtor, then make offers, and have your offers rejected. It has been a couple of weeks since my original post, and last weekend we went looking. I quickly realized that my goal of spending $300-$360k in Plano was trash. There is nothing out there that is actually at that price, in the 3/2/2, decent quality (not a total dog) category. Yes, there are properties listed for those prices, but they are lying. Some of the listings are purposefully listed quite a bit below market value, to attract a lot of offers, which I should have realized, but I didn't, until it was too late!

    The nicest place I looked at was in Frisco, around 1800 square feet, with beautiful finishes—hardwood floor, granite, etc. It was listed for $375,000, which was higher than my price range, but I decided to offer on it. I offered $400,000. For some reason, the agent decided to spill the beans to all the other agents whose clients had offers. This is crazy. Get this, he said: 320 people came to look at that house over just that one weekend, and it got 52 offers. 30 people offered over $420,000. (That’s $45,000 over asking price.) 10 people offered over $450,000. (That’s $75,000 over asking price.) I never stood a chance on that house. Also, that means only 12 people, including me, offered less than $420,000. 

    So I asked my Realtor to make an offer on another house, which was listed at $345,000. I looked at the comps, and one nearby, very similar, sold for $398,000. I offered $400,00 again, but this was for a lower-priced house, so that is $55,000 over asking. This agent shared that she got 26 offers, many that were "well above asking."

    All in all, we looked at 8 houses, and I ended up making offers on 3 of them, but I didn't get anywhere. I am glad that I have this information, and that is what I am trying to think of this as, just information to help me make a better decision. However, the message I am getting from the houses in this market it... "You ain't buying me!"

    1Reply
  • Michael W. McCord
    Rental Property Investor · El Paso, TX · Member since 2018 · 82 posts · 49 votes
    4y

    Yeah, @Laurie Williamson that's my experience too. The open houses I've been to are mobbed and none of my offers stand a chance. That could be one reason why there are plenty of people who want to rent even if they could afford a house. Also you'd be surprised at the number of high income earners with excellent credit that can't scrape together a down payment. Most lenders require 25% down on an investment property so an "entry level" 400k house means a 100k down payment which is nuts. 

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  • Laurie Williamson
    OP
    Rental Property Investor · Plano, TX · Member since 2014 · 54 posts · 19 votes
    4y

    @Michael W. McCord Wow, I had not thought of it that way. Now that 400k is entry level (if you're lucky) locally, you're right—25% down is 100k! Nuts! When I bought my first rental house / investment just seven years ago, it was $122,000, and I put just $30,000 down. Fortunately, I was able to sell it for a lot more, and am putting all of that equity into my next investment with a 1031, but even with $191,000 available for a down payment, it looks like chump change next to the cash buyers who are plunking down $450,000+ ....on houses that I would still consider entry level!

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  • Laurie Williamson
    OP
    Rental Property Investor · Plano, TX · Member since 2014 · 54 posts · 19 votes
    4y

    Update! I ended up buying a house in Flower Mound. Spent $400,000, which was, uh, quite a bit over their asking price, and ended up being $19k over appraisal as well. I realize I am playing a part in housing prices going up, and the crazy bidding wars...but I did what I had to do. I had already made about six reasonable offers on other houses, and offers were not accepted. I will say that I like the house a lot and it cash flows. For reference to anyone looking in this area, the house was about 1600 SF and built in the 1980s. I was able to complete the 1031 exchange in time.

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