Real Estate Investing in Dallas: Why and Where to Invest

Thinking of dipping your toes in Dallas’s real estate market? If so, then that’ll probably be among the best decisions you’ll make this year. 

As the fourth largest metro in the country and an economic hub for the Dallas-Fort Worth Metropolitan, Dallas has been experiencing unprecedented growth in recent years, a trend projected to continue even in the coming years. 

It is among the country’s fastest-growing cities, and a significant business hub for small, medium, and large enterprises. But just before you dive in, here’s what you should know about investing in real estate in Dallas. 

6 Reasons Dallas is a Good Place to Invest in Real Estate

As a real estate investor, you want to invest in a market that will lead to both improved cash flow and high returns on your investment. The good news is that Dallas fits this bill. Here’s why.

1. Steady Population Growth

Nothing fuels a real estate market’s development like population growth. As one of the largest in-land metropolitan areas in the country, Dallas attracts a diverse population with each wake. As of writing, the city is home to over 1.3 million people, and closer to 6.3 million people if you consider the entire DFW metroplex.  The city of Dallas reportedly attracts approximately 150,000 new residents annually.

It is among the country’s most densely populated and also fastest-growing cities. This makes Dallas one of the most lucrative real estate markets in the country. Besides, an influx of new people automatically creates more real estate investing opportunities.

2. Favorable Tax Laws

The state of Texas’s primary economic growth strategy involves working hand in hand with the business community to overcome growth and development obstacles. The state offers appealing incentives to encourage business investors and entrepreneurs to invest here. As the backbone of the Texas economy, Dallas benefits the most from this strategy. 

The city has some of the most favorable income tax incentives. Usually, businesses that make between $1.18 million and $10 million only pay 0.574% in franchise taxes, while those below the $1.18 million mark, don’t pay taxes at all. There are no personal income taxes charged as well. 

What this means for a real estate investor like you is that overhead costs are significantly low. With lower overhead costs, comes a bigger profit margin, creating more capital for you to diversify your real estate portfolio in Dallas. 

3. A Thriving Job Market

Favorable tax laws are guaranteed to attract top-shelf business investors and job searchers. That said, Dallas is among cities with the most diverse and most talented job markets. It’s a top 3 US city for the highest number of Fortune 500 companies, including Exxon Mobil, McKesson and even America’s biggest airline, American Airlines. What does any of this have to do with real estate? 

Well, a thriving job market usually translates into higher employee salaries. Better wages promote better credit scores and financial stability. This makes individuals in such a population an attractive market for your real estate portfolio since they have more purchasing power. Even those who cannot buy homes will make quality tenants since they will have no trouble paying their rent. Moreover, they have better credit scores, which means, they will quickly get approved for high mortgages if needed. 

4. Great Renters to Home Buying Ratio

In 53% of the country’s real estate markets, buying a home is usually more affordable than renting one. Conversely, renting is cheaper than buying in Dallas. Besides, a vast majority of the Dallas metropolitan population comprises millennials who prefer renting over buying homes. This makes investing in real estate in Dallas an even better decision because the demand for rental properties is at its all-time-high. 

But what if you don’t want to invest in rental property in Dallas? Well, even better for you because with most investors focusing on rentals, competition is reduced in the other real estate sectors. In other words, you will do fine whether you invest in rental properties or choose to buy and sell homes. 

5. Excellent Financing Options

Sometimes, even the most experienced and reputable real estate investor may not have the funds they need to take advantage of an excellent opportunity. Unfortunately, the real estate market doesn’t wait for anyone, and if you don’t have your funds at hand, great investment opportunities will pass you. 

The good news is that a well-established market attracts an array of lenders. In Dallas, for instance, there are some quality and professional  hard money loan lenders willing to help you facilitate a real estate investment deal. Just make sure you choose one wisely

6. A Flourishing Real Estate Market

The primary reason you should invest in any real estate market isn’t only its proven potential – the market should also be well established. These two points show that Dallas is an excellent market for your portfolio. However, what makes it a well-established real estate market is that it has been on an upswing for the past decade.

Dallas’s average home values increased by 2.4%, a trend projected to continue as more people move here. Also, Dallas’s median home values have been above the national average for the longest time, and it’s among the country’s top 10 cities with the best real estate appreciation. 

Where to Buy Investment Properties in Dallas 

The statement “everything is bigger in Texas” rings true for Dallas. Dallas spans across 343 square miles. Although Dallas real estate realm is teeming with opportunities, its markets aren’t one-size-fits-all. Whichever market you may be targeting, the thin line between amassing healthy returns and losses is sound investing. That is why we give you some of the best areas to invest in real estate in Dallas below. 

Dells District

Located just east of Cockrell Hill in Oak Cliff, the Dells District is a small neighborhood with a population of about 1,435 residents. Single-family homes characterize it, and a majority of the residents here are homeowners. However, most homes here aren’t in good condition. So, if you are looking to flip and sell, it would make a great area to add to your list since it has a suburban feel, and the demand for quality homes is high. The average cost of a home is about $250,059, while the cost of renting is roughly $1,516. 

Five Mile Creek 

This is a sparse suburban neighborhood in Dallas with a population of about 11,000 people. Most residents here are renters. The median home value is about $203,876, while the median rent is approximately $1280. It is also one of the best neighborhood areas to invest in real estate in Dallas. 

Lochwood 

Perched between Lake Highlands and White Rock Lake, Lochwood is a neighborhood in Dallas with a population of about 5,000 residents. Also known as Dixon Branch, it has a suburban feel and is one of the best neighborhoods in this part of town. It attracts many young professionals, with young families and early retirees. Most houses in Lochwood are single-family housing units. 

Lochwood makes a particularly excellent place to invest if your target market includes young families. The median rental price in Lochwood currently stands at approximately $900, while the average sale price for a home is about $389,000, a 5.4% increase from last year. The demand for homes is pretty high. Average homes may take 25 days in the market, while high-end properties only last for an average of 15 days. Real estate prices in Lochwood are 77.1% higher. 

Start Investing in Dallas Today

Dallas is a city rich in economic and financial opportunities. It is an ethical and age-diverse city – home to retirees, young families, millennials, and even Gen-Z. The real estate sector is incredibly strong and provides an array of investment opportunities for those who are ready. If you’ve recently come across a great real estate opportunity in Dallas but afraid you don’t have the funds to supplement it, do not despair. Apply for a hard money loan today to get started.