Atlanta Metri vs Dallas Metro for SFH long term buy and hold?

Question

My target price is around $550,000.  Looking for strong long-term appreciation and at least neutral cash flow on a 30 year mortgage including property management fees.

Looking for a standard three bedroom two bathroom single-family home. A fourth bedroom and or and Office den ￼would be a bonus but not a necessity. ￼ good schools strongly preferred, at least elementary. The house has to be move-in ready. The newer the better as it’s going to be remote property and I want to avoid or at least delay repairs for as long as possible. ￼￼ but based on my research I also know that I might have to go back to at least 20 years old houses, and that’s OK. 20 years is not too old for a house in opinion. You talking about a furnace and a few appliance changes in the worst case.

Dallas: ￼I’m treating Frisco as the main employment hub that I want to target and be around. Frisco itself seems expensive. This two cities that I found to be good potential opportunities were McKinney and Flowermound. Both seemed within 30 minutes of Frisco and both had good schools especially flower mound. Do you agree with my overall assessment and preference cities for Dallas?

Atlanta: Atlanta area seemed a little bit slower and less bustling compared to Dallas. But it’s a beautiful City. ￼ for Atlanta I’m creating Atlantic Station as the main employment hub. Targeting less than ￼30 minutes commute￼ to Atlantic station and good schools, I felt Symrna and Marietta were good options. I really liked Alpharetta too but felt that it’s already pretty expensive and actually the commute to Atlantic station is pretty bad in peak traffic hours. Do you agree with my overall assessment and preference cities for Atlanta?

If you have to choose one, which metro area would you go with Dallas or Atlanta?

Which is better in terms of Rental supply demand, rent to price ratio, FutureTech and population growth ?

Dallas has super high property taxes, and for some reason I don’t understand it seems to have very high insurance costs based on redfin estimates. But it doesn’t have state income tax. Atlanta on the other hand has lower property tax and seemingly lower insurance costs. What does state income tax. Has anybody done the math to figure out how do use things pencil out and which of these two metro areas end up being better purely based on current numbers? ￼￼￼

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Bruce Lynn · Answer

You are right....most of what we see now with 25%-30% down is breakeven in our market year 1.

Rents are increasing fast though, so many are seeing nice cash flow in year 3-4-5.

I have one in Frisco for example that was at $1800 I think 4 years ago and getting ready to renew at $2600 for two years.

Karan Rekhi · Answer

@Bruce Lynn I am looking for investment property to rent out long term buy and hold. The thing I am struggling with is that the property taxes so high that I am finding it hard to find properties that are neutral cashflow even with 25% down and 30 yr mortgage. I like McKinny. For example for this house Zilow and Redfin (links below) show wildly different costs for Property Tax and Insurance (not sure why?) but in both cases the the PropTaxes and Insurance add up to almost $800/mo for a $400K home taking the mortgage payment to $2500!!!! Will this rent for $2500?5005 Alpine Meadows Dr, McKinney, TX 75071 | MLS# 20015201 | Redfin5005 Alpine Meadows Dr, Mckinney, TX 75071 | MLS #20015201 | Zillow

@Bruce Lynnundefined

Karan Rekhi · Answer

Niyi, Thanks for your response. What is your take on Marietta for long term buy and hold SFH rental investments?

My strategy (would love your feedback):

I think the tech companies are centered around Atlantic station with both Google and Microsoft office. I want to target suburbs with decent to good schools that are not to far from Atlantic station. I want to at least be neutral cashflow on 30 year mortgage with 25% down. I had my eyes on Symrna. But unfortunately It feels like Symra prices don't seem to pencil out anymore (I will find a house for $550 but the rents dont seem high enough to get neutral cashflow esp with interest rates rising up). So now I am moving west wards into Marietta... there are some good schools in Marietta... Is that a good strategy? Are there other cities you would recommend?

Niyi Adewole · Answer

Hi @karan

I can only speak for the Atlanta Market where I am a realtor and Short Term Rental investor. With a budget of $550k, you can definitely get into a fully gut rehabbed or brand new home in a great neighborhood with all new systems.

I personally purchased a single family home with an in-law suite in early 2021 for $670k. In less than a year it has appreciated to $786k and i have since taken out a HELOC on the gained equity to continuing investing in deals. Atlanta is a desirable city with diverse employment opportunities.

@Karan Rekhiundefined

Bruce Lynn · Answer

Are you buying a home to live in, or investment property to rent out?   Almost sounds like you are looking for a place to live in and that can make a difference.

Frisco and Flower Mound are both great places to live, but there are of course many others, both are very competitive and prices have gone up a lot the past few years.   If you are looking for a personal residence I would strong look at Frisco.....if you are looking for investment property to rent out, I would look at the cities around Frisco like Celina, Melissa, McKinney, Gunter, Sherman, Denison....and plenty of others.

Drew Sygit · Answer

Why not try Metro Detroit?

You might want to follow the "Deep Dive" series we're doing on our BiggerPockets blog about Metro Detroit cities, City of Detroit Neighborhoods and comparing Metro Detroit to other hotspots investors usually consider:

https://www.biggerpockets.com/...