DFW Investors - what kind of return is realistic on SF rentals

[Account Closed]

I am searching for my next SF purchase in the north DFW area. I think I can come close to 1.5% of the total price for the rental amount (2% is out of the question), but it's the ROI that I am having trouble justifying. For example, I would need to purchase a property for less than $100k (and that's fixed up ready to rent) to get a good return using the 50% rule (I actually prefer to use closer to 60% to estimate my expenses). I am looking at properties that would rent in the $1500 - $1700 range, which means they are listed around $139K to $150K. Even at a good discount off of list price, it's tough to get down around $100K.

I realize the 50% rule and 2% rule are just guidelines, but most SF properties I look at are coming in at a 6-7% return when I run them through an analysis calculator.  

What return should I really expect in the Dallas area?   Am I looking at this all wrong for SF buy and hold?

[Hattie Dizmond]

@Account Closed 

@Josh R. is right on the mark.  North Dallas, the Richardson ISD is my farm area, has to be an insane deal to make the numbers work for buy & hold.  The beauty of that area is that it's so hot, rehabbed houses are flying off the market. 

If you're looking for buy & hold, I would recommend you checking out SW Arlington (Martin High School area) and HEB (north of 183), N Richland Hills, and Keller.  Those are areas with solid schools and good rental rates, but the home prices don't destroy your margins for buy & hold.  In SW Arlington, if you really want sought after property, look at anything that feeds Ditto Elementary.

Good luck!

Hattie