The Dallas housing market is one of the most recognizable and buzzworthy in the US. For many years in a row, it has been ranking on lists of best cities to invest in real estate by numerous trusted sources like Forbes and the PwC. Indeed, the Dallas real estate market has outperformed the national market in popularity and skyrocketing growth. But will this trend continue in 2020? The short answer – yes! In this blog, we look at the Dallas TX housing market trends to give you a clear picture of why experts still consider it a prime investing location in 2020. Furthermore, we provide a list of the top-performing neighborhoods in Dallas to consider for your next rental property investment.
Related: Dallas Housing Market Predictions 2020
#1 Diverse Economy & Job Market
Dallas’ economy is characterized by diversity and strong growth. The area is not only attracting families, retirees, and millennials, but also some of America’s top employers as well. Dallas has one of the largest concentrations of corporate headquarters for publicly traded companies in the US. In addition, the Dallas-Fort Worth region is home to 24 Fortune 500 companies — nine of which just within the Dallas city limits. These companies are creating stable, high paying jobs that contribute to low unemployment numbers and above-average annual salary numbers in Dallas. As expected, this also contributes to the growing Dallas housing market.
Some of the major industries in Dallas include healthcare, manufacturing, telecommunications, retail, finance, and services. Dallas is also earning a name for itself as the largest technology hub in the South. Back in 2018, the Computing Technology Industry Association named it the 6th best tech center in the country. With the many employment opportunities the city has to offer, this is attracting many qualified young people to move and work there. Once again, job market growth points to strong performance not just of the current housing market in Dallas, but for the future as well.
#2 Huge Population & Tenant Pool
Over 1 million people live in Dallas, making it the 3rd most populous city in the States of Texas and the 9th largest city in the US. The Dallas housing market 2020 is experiencing a serious population boom at the moment and it’s not just from growing families already living in the area. Recent numbers show that the Dallas-Fort Worth area was one of the fastest-growing cities in the US. There are many factors that contribute to the population boom in Dallas including affordability, climate, and accessibility. Since it has a lot to offer, it’s no surprise that a wide demographic is moving to Dallas with the millennial generation – the largest part of the American workforce – leading the charge.
For real estate investors, population growth translates into a growing demand for rental properties in Dallas. As many people are moving to the city for work, landlords in Dallas will enjoy a pool of qualified tenants who are well-paid and are looking for long term rentals. In fact, 52% of housing units in Dallas are renter occupied. Plus, the vacancy rate for Dallas rental properties is very low compared to other cities. This means landlords can easily find qualified tenants in Dallas. All of this explains why many investors love the Dallas housing market. To start looking for and analyzing the best homes for sale in Dallas TX, click here.
#3 Thriving Rental Market in 2020
According to Dallas housing market predictions and the above-mentioned trends, experts believe Dallas will continue to be one of the hottest rental markets in 2020. All the reasons pointing out to this just make sense. First, Millennials rated the Dallas-Fort Worth housing market the 3rd US city for where they want to live. This is according to a study of major US metro areas that factors in over 40 different aspects including jobs, taxes, cost of living, and cleanliness. Hence, this influx of millennials is having a profound effect on the Dallas real estate rental market.
In addition, Dallas is also attractive to renters with families looking to live in safe neighborhoods with good public schools. And let’s not forget the college scene and student market. Dallas-Fort Worth is home to some of the best colleges in the country including TCU, UT-Arlington, University of North Texas, and SMU. Students, eventual graduates, and visiting professors are going to be in the rental market at some point. This creates an extremely steady pool of renters year-in and out. All of this shows that the Dallas housing market is a solid choice for many demographics. This increases the rental demand and the rental rate – yet another reason to buy an investment property here.
Related: 8 Characteristics of the Best Rental Markets
#4 Airbnb Dallas is Legal & Profitable
If Airbnb is your preferred rental strategy when investing in real estate, you must be wondering if Airbnb rentals are legal in the Dallas-Fort Worth housing market. Short answer – yes! Currently, Dallas remains one of the few major US cities with no official regulations on short-term rentals. According to the city’s website, the only requirement for Airbnb hosts in Dallas is to pay Hotel Occupancy Taxes. Unlike other major cities that enforce strict Airbnb regulations like Los Angeles, Anaheim, and Austin, Dallas real estate investors are allowed to rent out both owner-occupied and non-owner occupied vacation rentals.
Not only is Airbnb legal in the Dallas housing market 2020, but it’s also profitable. Tourism is on the rise in the Dallas, Texas real estate market. Some of the common points of attraction are the AT&T Stadium, Reunion Tower, and Book Depository. According to Mashvisor’s Airbnb data, investing in a vacation rental Dallas can earn you a $125 average daily rate, $2.625 monthly rental income, and a 53% Airbnb occupancy rate. Interested in starting a vacation rental business in Dallas? Make use of Mashvisor’s tools to find and analyze profitable Airbnb investment properties.
Check out these other 20 Cities with No Airbnb Legal Issues in 2020.
#5 Positive Dallas Housing Market Statistics
If you’re looking for an established residential real estate market with plenty of room left to grow, look no further than Dallas. According to Mashvisor’s real estate data, the median property price in Dallas is $424,193 ($209 price per square foot). Even though the Dallas housing market prices are above the national average, they’re lower than equivalent hot markets like Austin, Los Angeles, Boston, and Miami. In addition, thanks to today’s low mortgage interest rates, there’s a chance for real estate investors on a budget to enter the market as well.
Moreover, data shows that Dallas is on an appreciation upswing. Dallas real estate has gone up 59.8% during the last 10 years – an average annual home appreciation rate of 4.8%. According to NeighborhoodScout, this puts Dallas in the top 10% for the highest real estate appreciation rates in the country. And lastly, real estate investors will receive a good return on investment not only from appreciation, but also from steady rental income. Mashvisor’s data show that the monthly traditional rental income of Dallas rental properties is $1,907. If you know how to manage and cut your rental expenses, you have a chance of making positive cash flow when investing in Dallas residential real estate.
Best Neighborhoods in Dallas for Traditional Rentals
Now that you understand Dallas housing market trends and why this city is still is a top location for investing in real estate, you might be asking where exactly you should invest in Dallas. After using Mashvisor’s tools for assessing housing market in Dallas, we’ve come up with the following list of the 5 best neighborhoods to buy traditional Dallas rental properties in 2020:
#1 Near East
- Median Property Price: $366,343
- Price Per Square Foot: $235
- Price to Rent Ratio: 13
- Monthly Traditional Rental Income: $2,390
- Traditional Cash on Cash Return: 4%
#2 Southeast Dallas
- Median Property Price: $190,322
- Price Per Square Foot: $125
- Price to Rent Ratio: 12
- Monthly Traditional Rental Income: $1,315
- Traditional Cash on Cash Return: 2.5%
#3 South Boulevard-Park Row Historic
- Median Property Price: $172,354
- Price Per Square Foot: $120
- Price to Rent Ratio: 12
- Monthly Traditional Rental Income: $1,171
- Traditional Cash on Cash Return: 2.4%
#4 Love Field Area
- Median Property Price: $264,681
- Price Per Square Foot: $204
- Price to Rent Ratio: 12
- Monthly Traditional Rental Income: $1,796
- Traditional Cash on Cash Return: 2%
#5 Winnetka Heights
- Median Property Price: $226,116
- Price Per Square Foot: $145
- Price to Rent Ratio: 13
- Monthly Traditional Rental Income: $1,413
- Traditional Cash on Cash Return: 2%
Best Neighborhoods in Dallas for Airbnb Rentals
Are you more interested in making money by renting out on Airbnb in the Dallas housing market? If so, you need to know the neighborhoods in which Airbnb investment properties have a higher potential for profit. Again, using Mashvisor’s Real Estate Heatmap, we were able to locate these 5 best neighborhoods for Airbnb Dallas and provide you with their data as you can see below:
#1 Wolf Creek
- Median Property Price: $200,102
- Price Per Square Foot: $123
- Average Airbnb Daily Rate: $154
- Monthly Airbnb Rental Income: $3,196
- Airbnb Occupancy Rate: 65%
- Airbnb Cash on Cash Return: 7.6%
#2 South Boulevard-Park Row Historic
- Median Property Price: $172,354
- Price Per Square Foot: $120
- Average Airbnb Daily Rate: $130
- Monthly Airbnb Rental Income: $2,235
- Airbnb Occupancy Rate: 43%
- Airbnb Cash on Cash Return: 6.6%
#3 Five Mile Creek
- Median Property Price: $209,641
- Price Per Square Foot: $136
- Average Airbnb Daily Rate: $123
- Monthly Airbnb Rental Income: $2,994
- Airbnb Occupancy Rate: 56%
- Airbnb Cash on Cash Return: 6%
#4 Winnetka Heights
- Median Property Price: $226,116
- Price Per Square Foot: $145
- Average Airbnb Daily Rate: $122
- Monthly Airbnb Rental Income: $2,715
- Airbnb Occupancy Rate: 55%
- Airbnb Cash on Cash Return: 6%
#5 Southwest Dallas
- Median Property Price: $266,850
- Price Per Square Foot: $141
- Average Airbnb Daily Rate: $130
- Monthly Airbnb Rental Income: $2,763
- Airbnb Occupancy Rate: 51%
- Airbnb Cash on Cash Return: 4.6%
Real estate investors love Dallas and it’s easy to see why. Ready to invest in the Dallas housing market 2020? Start your 7-day free trial with Mashvisor now to begin searching for and analyzing homes for sale in Dallas, TX in your neighborhood of choice. If you don’t find what you’re looking for, we’ll notify you when we have a Dallas investment property that matches your search criteria!
