Top 5 Areas for Dallas Investment Properties

If you are thinking about purchasing your first income property or are looking for another investment property to add to your real estate investment portfolio, you should definitely consider Dallas investment properties. The combined effect of a high population growth (twice the national level) and a strong economy (a mix of traditional and high-tech sectors) with an expanding job market has created an attractive real estate market with excellent opportunities for real estate investors like you. In Dallas rents are going up, and this trend is likely to continue in the coming years.

Related: Everything to Know About Dallas Real Estate Investing

Here we show you some of the most important metrics you want to know for Dallas investment properties:

  • Median Property Price: $631,000
  • Airbnb Rental Income: $2,607/mo
  • Traditional Rental Income: $1,860/mo
  • Airbnb CoC Return: 2.5%
  • Traditional CoC Return: 0.9%
  • Airbnb Cap Rate: 6.7%
  • Traditional Cap Rate: 5.0%

Like any other major city, Dallas is a diverse one with differences from one area to another. In order to help you in your choice among Dallas investment properties, we look at the top areas for real estate investing in Dallas.

Near East

Near East is definitely one of the top areas for Dallas investment properties. The major benefits which this area offers over other places in Dallas include proximity to lots of amenities and high income per capita. These are important features when you are trying to attract potential tenants. The median household income in Near East is 56% higher than in Dallas, according to AreaVibes, which ranks the best places to live in America based on a Livability Score. At the moment Dallas investment properties in Near East are highly affordable as the median property price in this neighborhood is $237,000, according to Mashvisor data. This is one of the lowest in Dallas and significantly below the city average value of $631,000. In the Mashmeter, an indicator developed by Mashvisor for evaluating how good for real estate investing a neighborhood is, Near East scores 72%, among the highest in Dallas. If you are thinking about buying an investment property in Dallas, you should keep in mind that traditional is the optimal renting strategy in Near East with expected rental income of $3,200, double the expected rental income from Airbnb. Traditional renting yields much higher cash on cash (CoC) return and capitalization rate (cap rate).

Related: What is a Good Cash on Cash Return?

  • Median Property Price: $237,000
  • Airbnb Rental Income: $1,633/mo
  • Traditional Rental Income: $3,200/mo
  • Airbnb CoC Return: 2.9%
  • Traditional CoC Return: 10.2%
  • Airbnb Cap Rate: 7.6%
  • Traditional Cap Rate: 15.4%
  • Airbnb Occupancy: 45.4%

Farmers Market District

In your search for Dallas investment properties, you should also think about Farmers Market District. That’s another top area for investing in the Dallas real estate market. As the name suggests, this neighborhood hosts the famous Dallas Farmers Market, in addition to many other events year-round. It’s another highly affordable area for those looking for Dallas investment properties with a median home price of $237,000, the same as Near East. Farmers Market District features a lot of amenities, low crime rates (60% lower than the Dallas average), high high-school graduation rates (25% above Dallas), and high median household income (29% more than in Dallas). The last one is particularly important for potential landlords because you want to be able to attract rather well-off tenants. Nonetheless, according to Mashvisor data, Airbnb is the better rental strategy in this neighborhood as it yields much higher rental income, CoC return, and cap rate.

Related: What’s a good cap rate for investment properties?

  • Median Property Price: $237,000
  • Airbnb Rental Income: $8,663/mo
  • Traditional Rental Income: $1,801/mo
  • Airbnb CoC Return: 11.9%
  • Traditional CoC Return: -0.4%
  • Airbnb Cap Rate: 16.5%
  • Traditional Cap Rate: 3.4%
  • Airbnb Occupancy: 34.5%

North Dallas

Yet another excellent area for purchasing Dallas investment properties is North Dallas. AreaVibes ranks North Dallas as #3 in Dallas and #54 in Texas.

Related: Texas Real Estate Investing: The Best Areas

The benefits which this neighborhood offers are many: closeness to amenities, low crime rates (60% below Dallas), education (high-school graduation rate is 29% higher than the Dallas average), and high household income (129% above Dallas). While North Dallas is slightly off the heart of Dallas, bus lines to downtown are abundant. So are shopping and dining options. As in most suburbs, housing options here are generally bigger and thus more expensive. The median home price is $805,000, much higher than the Dallas average. However, the expected rental income is also well above the city’s average. In terms of the best rental strategy in North Dallas, both traditional and Airbnb are recommended. While Airbnb tends to yield higher rental income, CoC, and cap rate, the occupancy rate is rather low at 22.1%.

  • Median Property Price: $805,000
  • Airbnb Rental Income: $3,803/mo
  • Traditional Rental Income: $3,253/mo
  • Airbnb CoC Return: 4.8%
  • Traditional CoC Return: 3.5%
  • Airbnb Cap Rate: 9.2%
  • Traditional Cap Rate: 7.7%
  • Airbnb Occupancy: 22.1%

Lake Highlands

Another top area for Dallas investment properties is Lake Highlands, which is sometimes considered a part of North Dallas and sometimes a part of Northeast Dallas. It is the most family-friendly neighborhood in Dallas with vast parkland and trails leading to White Rock Lake. The area provides easy and quick access to the heart of the city and hosts well-regarded schools. Other benefits include: proximity to amenities, low cost of living (8% below Dallas), good education rates (10% higher than Dallas), and above-city-average household median household income. Although real estate properties here tend to be more expensive than in Near East and Farmers Market District, they are still cheaper than in other parts of Dallas with a median home price of $440,000. Because of many positive factors, Lake Highlands scores 66% in the Mashmeter for Dallas investment properties. Airbnb is the optimal renting strategy in this neighborhood with expected rental income of $3,229 and relatively high CoC and cap rate.

  • Median Property Price: $440,000
  • Airbnb Rental Income: $3,229/mo
  • Traditional Rental Income: $1,327/mo
  • Airbnb CoC Return: 7.0%
  • Traditional CoC Return: 1.0%
  • Airbnb Cap Rate: 12.0%
  • Traditional Cap Rate: 5.6%
  • Airbnb Occupancy: 28.9%

Oak Lawn

If you haven’t found the perfect area for your Dallas investment properties yet, don’t give up. Look at Oak Lawn, ranked as #4 in Dallas by AreaVibes. It is one of the wealthiest neighborhoods in metropolitan Dallas with a population comprised of urban professionals. The median household income here is 73% higher than in the rest of Dallas, and the high-school graduation rate is 21% above the city’s average. The crime rate is 60% below Dallas, and amenities are abundant. Oak Lawn is a diverse neighborhood with upscale townhouses, condos, duplexes, and apartments including well-established areas of older, single-family homes. The median real estate property price here is just below the city’s average at $600,000. Traditional tends to be the better rental strategy in Oak Lawn with higher rental income, CoC, and cap rate. This is contributed to the family-friendly nature of this neighborhood.

  • Median Property Price: $600,000
  • Airbnb Rental Income: $1,853/mo
  • Traditional Rental Income: $2,531/mo
  • Airbnb CoC Return: 0.3%
  • Traditional CoC Return: 1.4%
  • Airbnb Cap Rate: 4.2%
  • Traditional Cap Rate: 5.4%
  • Airbnb Occupancy: 52.3%

Now that you know which the top areas for Dallas investment properties are, at Mashvisor you can take a look at hundreds of actual properties for sale and see how they compare to one another and to the neighborhood and city averages.

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