All Forum Posts by: Eric Long

@Eric Long

I used the 200k number just to give an example of what the tax bill would be. As @Jason Taliaferro mentioned, the higher tax rate here is a small price to pay for all the positive things the area has going for it. The number of people who move into the Dallas/ Ft. Worth area a day is unbelievable so the growth is there. The job base is really diversified. Texas is very investor-friendly as was mentioned. The no income tax plays a role also in the fact that people want to live in places like Texas. Companies want to move here and the state promotes that. 

All that sounds great, but finding a property where the numbers work is getting pretty hard. Not impossible, but tougher. The home values shot up a few years back when the hedge funds were buying up a lot of the houses on the market. This created a ton of rentals so now I see that the rents are not increasing with the values and tax rate. You most likely would need to find something off-market to make numbers work. The 1% rule that is talked about would be hard to achieve. Personally I like other smaller markets with lower prices, but the trade-off is they don't have the growth or stability found here, but the cash flow is better. 

There's a lot of people here that make it work, so it can be done. It's just not as easy as it once was. 

You are correct. The economy is great here. Sooo many companies have are are in the process of relocating their HQ to North Texas. Meaning, lots of new jobs and people looking for homes to live in.

There are several good points about taxes above. A couple other notes. Each city has slightly different tax rate. One thing I have noticed is that the areas with higher tax rates have better schools and much better appriciation. I have seen too many investors buy cheap houses in bad neighborhoods because they believe they will have lower expenses. Taxes may be lower but the maintenance is higher due to older homes and lower quality tenants.

But remember Texas is a very landlord friendly state. Meaning, no pay, no stay. 

I would look for properties between $150,000-$220,000. Do not purchase inside the city limits of Mesquite, Garland or Dallas. Each of these cities are known for being unfriendly to landlords.

I a rental in Ft. Worth TX. Sure the taxes are high but this is typical of a state with no income tax. It helps because you also do not have to pay state tax on gains in rental income. All things considered, TX is a great state for rentals because the job markets are good which makes renters easy to find. The laws are very landlord-friendly. And the properties are reasonable so the barrier to entry is low.  

Well you won’t be taxed on rental income at the state level for starters...

And what I am saying is this is how the state/county make up revenue. If there were a state income tax, property taxes would be lower. 

Got it. So it all levels out in a sense. Me being from CA, I am able to take advantage of this no income tax from the rental properties

I knew some people involved with them when I was working on another deal, and given I never had an interest in swinging a hammer or adding a job for myself by working on investment properties, they were perfect for me so I dove in. Turnkeys aren't perfect all the time, but I wouldn't do any different strategy myself. If that helps.