You don't have to live in the Dallas area to benefit from the excellent rental market here. If the market where you live isn't ideal for growing your rental property portfolio, smart investors know to look elsewhere. The most successful investors keep up to date about where to buy next to increase their wealth. One of the best things about being a real estate investor is that there are no boundaries!
Dallas is an attractive market for investment properties!Businesses love the area, which brings more people looking for places to live as they pursue work. Taxes are reasonable, and there are plenty of existing properties. Plus, new builds are popping up all the time! It's a great time to invest, but before you jump into your next Dallas rental, make sure you know everything you need to know for success.
This blog will cover some tips to help you find success with your out-of-state rental investment property from an expert DFW property management company.
Reasons to Invest in Out-Of-State Investment Property
Before we talk about how to succeed as an out-of-town rental property owner, you'll need to know some of the reasons why it's a good idea to expand your real estate portfolio outside of your current area.
If you're looking for a place to invest in real estate out of state, consider somewhere with lower property costs. This is especially helpful if you live in a large urban area where the real estate market has become unaffordable. The market fundamentals should still be sound, but the prices will be more affordable.
If you live where real estate values are declining or have fallen, renting a home and investing in real estate elsewhere may be a better option.
When it comes to buying an investment property, there are many things to consider. One of the most important is the return on investment (ROI). This is how much you can expect to gain from buying a property and the rental income you receive. If you live in an area with high real estate prices, you may not be able to get as good of a return on investment as you would if you bought elsewhere. In this case, it might make more sense to rent and invest in real estate elsewhere.
Research the Market(s)
Many suburbs surround the Dallas and Ft. Worth "proper" cities. No two suburbs are exactly alike, so it's critical to know the differences in tax rates, commute times to prime business sectors, and what renters want in that area.
There are pros and cons to investing in just about any suburb or city. Conducting the appropriate market research gives you the information you need to make the best decision for your growing portfolio.
Property management companies can provide your market research on the areas around Dallas and Fort Worth so that you can make an informed decision.
Decide on a Property Type
Are you looking for existing homes? Buying established homes and updating them for rentals works well in this market.
Turnkey properties are also a great way to ramp up your income faster when you decide to add another rental property. It's the same concept as buying a property on your own; it's already leased and comes with expert property management. It's an optimal situation for out-of-state rental property owners!
Have you considered new builds? New construction is almost everywhere you look in DFW. Purchasing a newly-constructed, turnkey home might be more cost-effective with a quicker return as a rental. Look for a company that specializes in turnkey, new-build properties for a better ROI addition to your portfolio.
Run the Numbers
It can "look" like the perfect property to add to your investments, but have you run the numbers yet? Don't jump on the purchase without running the numbers to ensure it's a profitable property.
Don't get distracted by the home, the neighborhood, or the amenities without making sure the cost of the property, taxes, HOA fees, insurance, and maintenance will generate net revenue for you after the rent collection each month.
A beautiful home doesn't always make a wise rental property investment. The numbers will tell you if you're making a good investment—or if you should keep looking for another property.
Decide How to Manage the Property
It's tempting to feel like you're saving money by managing your properties. However, this can be difficult when you're an out-of-state investor. Think through the realities of managing a property on your own from afar:
Do You Have Friends or Family Nearby?
If you have a reason to visit often, you can include property management services during your visits to keep an eye on your rental house. With the right family members in the area, you might be able to enlist their help keeping an eye on your property. If this is not an option for you, you may want to consider investing in professional property management.
Do You Have a Network of Local Contractors for Maintenance?
It can be challenging to respond to maintenance emergencies when you're not close to your property. Establish a trusted network of contractors who can perform routine maintenance and respond to after-hours emergencies right away.
Do You Have a Tenant Screening Process?
You don't have to be local to screen tenants. However, it's challenging to show your property or meet tenants for an in-person interview when you don't live in the area.
Don't let these details keep you from purchasing your next Dallas-Ft. Worth rental property! A local property management company can provide all of these services—and more—when you decide DFW is the place you want to invest.
Are You Utilizing the Latest Technology?
Technology has made managing a property in another state easier than ever before. Utilizing cutting-edge technologies can reduce your workload and save you a lot of time and effort. There are many alternatives for landlord software that allow you to process tenant screening and acceptance of payments online from the comfort of your own home.
An expert DFW property manager can introduce you to technology that can make being an out-of-state landlord a breeze.
We Help You Invest in and Manage Your Properties
You need local, expert property managers to make the most money from your investment properties in Dallas-Ft. Worth. You want the most comprehensive rental property management team in the metroplex. Contact RentHub to get started.