Are you considering purchasing an investment property anytime soon? You find real estate investing appealing in terms of financial profit? Then the time to invest is right now. Rental properties are a good investment because of the potentially good return on investment that they provide. Mortgages are at a low-risk classification and are generally at their lowest point for years. Thus, the question that currently faces any concerned real estate investor is not the intention or motivation behind buying rental properties, but where he/she should buy one. Knowing which cities are the best performing ones across the United States is not always an easy task. However, we are about to make that decision way easier for you because it’s the Dallas real estate where you should be investing your money in right now.
The growth of the Dallas real estate market has coincided with its recent growth in expansion of population and the economy. The fact that there are around 600 people moving into Dallas every single day shows the big opportunities that the city provides for its new residents. This growth has made the Dallas real estate a seller’s market. That means that people who own real estate properties for sale will benefit immensely from future sales. However, even with the higher property prices in Dallas, prices are still considered fair compared to the wages of people working there.
The Dallas real estate market offers a consistent rental income flow for investment property owners. This is due to millennials moving there for universities or jobs. This age group, in particular, is in favor of renting until they are able to financially purchase a house or an apartment on their own. There are many reasons why Dallas is growing more every single day, and understanding those reasons gives you an added incentive and a financial justification to invest in the Dallas real estate market.
4 Reasons to Invest in the Dallas Real Estate Market
1. Job Market and Employment Rates
A strong local economy is a leading factor in the growth of the Dallas real estate market. The well-being of the economy and the financial strength of the population result in more jobs and better wages. When people have more money to spend, they tend to invest in various markets, and one of the most popular markets in Dallas is the real estate market. Dallas ranks 6th in the best GDP in the United States, with a GDP of around $450 billion, which is only bested by cities like New York, Los Angeles, Chicago, Houston, and Washington, DC. The employment numbers for Dallas are also remarkable, with the city ranking 2nd on the job growth list. Since the recession, Dallas has created more than 500,000 jobs. These jobs are the reason why the Dallas real estate market is recovering so well and will continue on its upward trajectory for the foreseeable future.
The result of this prospering economy doesn’t only result in the rise of the residential real estate market, but also in enhanced commercial real estate demand. Dallas has ranked 1st in the overall commercial real estate demand nationwide, including industrial, retail, and office real estate properties for businesses relocating to the Dallas region.
2. High Wages and Low Cost of Living
With the average salary in Dallas rising to around $65,000 per year, this in return has resulted in more people having the financial stability to be able to invest in the Dallas real estate market. High wages affect real estate investing in two ways. The first is that workers start to generate enough money to purchase real estate properties with cash payments over the years. The second way is through improving the personal credit score to be able to apply and qualify for a mortgage to purchase an investment property.
3. Growth of Airbnb
Investing in the Dallas real estate market offers good opportunities for gains not only in the traditional form but also in Airbnb. Dallas offers a relatively friendly environment for short-term rentals with minimum requirements for licensing, taxation, and enforcement. To be precise, while Dallas does not have explicit laws on Airbnb, short-term rentals are considered legal. Dallas Airbnb operators should be taxed like hotels, which means that in theory the State and the city take 13% (hotel occupancy tax) of the charge for any Airbnb stay in Dallas. But the reality is that most Airbnb hosts in Dallas fail to pay their due taxes. In September 2015, there were a total of 700 listings in the city proper on Airbnb (offered for an average of $105 per night), and from them, only three were registered with the city, and only two paid taxes. Airbnb hosts are subject to $500 penalty for failing to collect taxes or file reports, but there is virtually no tax collection implementation, making gains from short-term rentals even higher.
4. Population Growth and Land
The Dallas metro area is growing at an uneven pace, with the slowest growth in Tarrant County and the fastest growth in Denton and Collin Counties. Over the next three years, it is expected that 50,000 new single-family homes and 50,000 new apartments will be built in Dallas County. This means that the Dallas real estate market is expanding, and with an abundance of land available, it is not that hard to see a continued construction expansion in the coming years.
Apartment builders are buying up every piece of available land, and no one can compete. It is interesting to note that trusts and investors have no intent to convert or sell off these apartments and condominiums. They are seeing that Dallas is quickly becoming a mecca for business, and the population is relativity low for the amount of job creation and equity being built.
Investing in the Dallas real estate market right now would be a smart move for any investor. The city’s growth, economy, and wages are all playing a part in boosting the real estate market for investors who want to make long-term investments specifically. Property prices will continue to rise, and if you hesitate about investing now, it will cost you much more in the coming years, that is, if it doesn’t grow beyond your budget. Dallas is the next real estate jewel in the US market.