Dallas or South Florida - Which is a better market?

Question

Within the next year I am planning on leaving Los Angeles and moving to either Dallas, Tx or South Florida to begin my real estate journey. Does anyone have recommendations for which might be a better house hacking and buy/hold market? Multi-family properties seem much cheaper in the Dallas area but South Florida has so many affordable condos. Just not sure if the HOA in South Florida will kill cash flow. Please advise, thanks!

Joseph Amin · Answer

If your'e doing house hacking and rehab find a place where you don't mind spending a year or 2 if its for investment purposes. I neither, instead find where land is cheap and rent is  high. A lot of my investors like SWFL ( cape coral, Lehigh acres , port charlotte and North Port area) within the Texas triangle or outskirts of Dallas, college station or Tyler. I don't do a lot in Texas but those areas have a great price to rent ratio.@Adam Wesley Abrams

James Cordeiro · Answer

the historic shift happening with single-family rentals are where I advise my investors to focus.

Opportunities in DFW and South florida still exist. It will take some ground work to find the properties.

I suggest looking into Jacksonville and Gainesville, FL.

Good SFR cash flow opportunities.Strong economies that rival south florida for the lower cost of living and high salaries.

More young people are moving to north florida from south fl, NY, CA, and TX for the career ops and lower cost if living.

Mo Karim · Answer

@Adam Wesley Abrams - Dallas is like a mini LA minus all the negatives. There are also very good suburbs here if city life isn't your thing. I'd suggest visiting for a week or two and see it for yourself. Might be an easier transition.

I don't like condos anywhere. Most are mismanaged by HOAs and they hit you with large deferred maintenance bills every once in a while thats not part of your HOA dues. I would think South Florida with hurricanes and being near the ocean would be in that category. Look at insurance rates too.

Taz Zettergren · Answer

In my experience the DFW metroplex has been far more beneficial for the investments sake. South Florida is a great place to live but as far as investing it'll be more challenging with the costs involved.

Share Ross · Answer

@Adam Wesley Abrams congrats on making big plans to househack!

My husband and I moved to SE Florida from Los Angeles. And yes, the move is a HUGE one. For us, it was the lure of the beach that made this location win out.

As for investing, I have helped tons of househackers here - doing everything from buying a town house and renting out a bedroom (or 2 if it is a 3 bedroom) to folks getting duplexes and triplexes and then simply buying a house and renting out bedrooms. It is all very doable. And depends on the area for the desirability.

It appears that rentals are still very much in demand and you can use various means to find the right people. From socials to simply putting the word out with your realtor.

Of course, I cannot speak to the Texas market - but that sounds hot as well!

Good luck in your endeavors and hope whatever you choose ... it will work out for you.

Bruce Lynn · Answer

@Adam Wesley Abrams  There are all kinds of people who rent rooms, not just college students.  Probably tends to be younger people, but older people do it too.   Just had a guy call getting $2000/month on SS.  That will be tough to get an apartment here, but $700/month might get him a room in a shared house.  Lots of single foreign tech workers want to do it to save money.  I've also seen younger folks who are thinking of moving and don't want to sign a 7-12 month lease with apartment complex.  Travel health professionals might do it if they are on 3-6month contracts.

Of course you can do it on the AirBnb/VRBO sites, but there are plenty other places to network and post listings.  Some FB groups.   I doubt there are many PM in most places that want to rent by the room, but there are some.

The true practicality of house hacking a 2-3-4 in DFW probably sailed for the most part 5 years ago or more if it ever really existed.  Of course someone is going to post an exception, but the reality here of using FHA to qualify for a 4 plex and having rents in 3 cover the 4th unit so you can live for free I think have always been very few and far between.  Most people probably couldn't qualify for the 4plex and the rents vs purchase price didn't cover the mortgage 100%.   I think David Greene even talks about that now in his podcasts.   That's why I suggest the 4-5 bedroom strategy.  It's not real common where there are 100s of choices, but I probably see 1-2 a month that should work if you have a decent down payment and income.

Adam Wesley Abrams · Answer

Thanks everyone for your comments!

@Bruce Lynn The books I am reading do not talk much about renting 4-5 bedroom places out to random people. I know it usually flies with the younger crowd especially in college situations but how do you go about filling these rooms? Will property managers handle that or is it more facebook, craigslist etc. on your own time? I know extended Airbnb is always an option as well but figured the turn over is much quicker which risks going more time with an empty room. Thank you!

Bruce Lynn · Answer

@Adam Wesley Abrams   In many ways I think both markets have opportunity.  Both very strong markets.  Welcome to Texas if you decide to move here.

I would be extremely careful right now with condos in Florida, and maybe DFW too.  Read up on all the legislative issues and insurance issues with condos in Florida.  Engineering /Inspection requirements and repairs are likely going to be super expensive moving forward after the collapse of Champlain Towers South in Surfside.   Insurance is also a huge problem right now in Florida.   My normal thought for most investors is not to invest in condos.  As you mention HOA normally kills returns.   I can think of only about 3-4 condo developments in all of DFW that probably make sense for investors.   There are so many reasons NOT to invest in condos.  Sometimes nice places to live with some nice locations and amenities, but probably better for personal residences vs investment properties.  Although in FL until all this mess shakes out, if it ever does, then I probably wouldn't even buy one as a personal residence.   There are also some weird laws in FL about HOA dues that you should 100% understand.  I'm not in that market, so don't know the details, but something like even if you default on the condo, you can still be personally liable for HOA dues accruing or something like that.   Even in DFW I've seen some HOA dues nearly double this year.

Probably either market single family probably makes more sense to house hack.  In DFW right now I'd say buy a 4-5 bedroom with 3 or 4 baths.  Live in one room and rent the others.  Put your bedroom potentially on airbnb and couch surf or set up a bed in the garage or something to even put a little more income in your pocket.

Rob Lee · Answer

I don’t know much about South Florida, but I love it here in the Dallas burbs. Everything is new, with tons of room to grow still, and beautiful homes. Jobs are strong and companies keep moving here. I used to live in San Diego after the military. I loved the weather, but my quality of life is MUCH better here! Also, Texas has helped my net worth tremendously. To me personally, it’s an easy choice. Good luck!

Dallas or South Florida - Which is a better market?

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