San Antonio - Hot Wells area - Market opinion

[Miles Stanley]

Does anyone have some objective data (crime, tenant quality, etc) for the area along IH 37 between IH 10 and 410?  More specifically, the residential areas close to IH 37 near Southcross and Pecan Valley?  See below...

Are these areas that should be avoided for rental property investing?  I'm into residential rentals, but not interested in war zone/bad-area investing (don't feel like chasing rents every month)..

Thanks,

[Seth Teel]

@Miles Stanley

First, here's a link to a San Antonio Crime Map.  You can actually dial it in by address:  http://news4sanantonio.com/news/crime-map

The areas you are asking about are not  war zones, and are not generally "high crime" areas.  Is there more crime than a suburban neighborhood on the Northside, yes.  But what do you expect?  

On the Eastside of I-37 you have the Pecan Valley, Fairlawn, & Highland Hills neighborhoods. Pecan Valley/Fairlawn tops out just over $180K in the last 6 months, with solid comps in $160K range. Rents comps on the MLS are showing a max of $1000/month for a rental in this area, but I suspect this is inaccurate. In this area most of the landlords will rent their homes off a sign, craiglist, or facebook. I am willing to be you could get up to $1400/month on a nice sized well-renovated 3/2 in Pecan Valley/Fairlawn.

The values are not quite is high in Highland Hills, but it's a solid working class neighborhood with does still approach that $160K mark in home sales (last 180 days). Again, rent comps on MLS are showing up to $1000/month, and again I suspect this a little lower than what you can actually get.

On the Westside of I-37 you have the Hotwells neighborhood. Not quite as glamorous as it's neighbors to the East, but still a solid area. Your market tops out at $147K for the last 180 days, but that was an outlier. A more realistic ARV for this are is below $130K. Rents range fro $700 - $1000/month depending on number of beds/baths and whether or not its SFD, Duplex, or Apartment building.

I have had several clients invest in these neighborhoods and be successful.  Most were held the properties as rental or sold them via owner finance.  I have had a couple clients flip properties in Pecan Valley/ Fairlawn.  Since you say you're looking for buy & hold rentals, I think this can be a lucrative area for you.  That being said, tenant screening is paramount to eliminating many of the potential headaches.  There is also the "Ladyfriend Test;"  Would you send your wife or ladyfriend to pick up rent check at a property in this area at night?  If the answer is no, then move on.  Of course, if you have a property manager this could be a moot point.  

Good luck!