Rental analysis for Rockwall/Fate in Dallas

[Sam Li]

Hi, everyone. I am a newbie real estate investor and just purchased one out of state property in Fate, Tx for rental. Unlike most properties discussed here, it is a new construction that we directly purchased from the builder since we want to save the hustles of maintenance at least for the first few years. Below are some basic numbers and I am curious on your view.

Cost: ~270k

Downplay+closing cost: around 72k

Expected rent: $2000

Repair: $50 per month

Vacancy rate: 2 weeks per year assumed

Management cost: we plan to manage it by ourselves as my investment partner is in the same area and we expect minimal repairs in the first five years as this is a new construction

ROI comes back as around 5% cash flow and 10% if considering the principals tenants paid.

1. Anyone familiar with Fate market, especially about its vacancy rate?

2. What’s your view on new construction for rental investment in general?

Pros: purchase process is more smooth and probably minimal repair concerns for the first 5-10 years.

Cons: no room of bargaining or appreciation due to rehab. ROI tends to be lower.