As we arrive in the homestretch of this year, we thought it would be a good idea to take a look at some of the best places to invest in rental properties in 2019. At Mynd Property Management, we are active in a number of markets across the country. We have a unique view of where things are going well and where investors are struggling.Before you decide to buy a rental property, you’ll need to figure out what your investment goals are. This will have a huge impact on the market you choose. So, we’re categorizing our advice on where to invest into two different investment strategies.If you’re looking for long term investments, you’ll want to buy rental properties in markets like Dallas, San Antonio, Austin, or Atlanta. Those Texas cities are amazing for long term returns on rental properties. We think there’s a lot of potential for investors who are hoping to hold onto their properties for many years. You can plan on strong appreciation plus a decent cash flow when you know where to look and how to structure your investment.For short term investments, we suggest you take a look at the Midwest. You’ll find some excellent opportunities in places such as Columbus, Ohio, Memphis, Tennessee, and Indianapolis. These markets provide investors with high yields and good cash flow.But let’s dig a little deeper into these markets and talk about what you should be looking for. If you’re an experienced investor who is growing an existing portfolio, you’ll want to find properties that fill some gaps or complement what you already own. If you’re a new investor, you’ll want to spend some time doing some research and due diligence before you make your first purchase.
When you’re planning to invest for the long term, you have a specific set of criteria that you want to look at before you acquire a new rental property. We recommend that you look for appreciation, that you evaluate the growth numbers, and that you take a holistic view of the economy. These are the things that feed a successful long term investment property.Dallas is a great market and it illustrates everything that we’re talking about. There’s a lot of potential for growth in Dallas. For example, last year, there was a 10 percent growth; and that’s a great number for investors who want to allow their properties to grow in value over time. You’re going to make a lot of money with that kind of growth.The challenge with Dallas and markets like Dallas is that they can be hard to get into. If you want to buy something in the Dallas proper area, you’ll find that you have to spend a bit more than you might have planned. If you find that you cannot locate a great investment property in downtown Dallas, there’s nothing wrong with going out to the suburbs. In the outskirts of Dallas, you can find and buy a home that’s affordable. With that property, you’ll be able to hold onto it for a while. The rental income will be steady and the rental value will continue to increase. As its value increases, this property will deliver a lot of appreciation and it won’t be long before it becomes a cash cow.There are some other factors we like to look at when we’re deciding where our clients should invest. For example, we like to follow where the young people are going. The millennial generation is huge and it’s arriving in the rental market in a large wave, especially recently. If you’re an investor who wants to attract millennial tenants, you need to make sure you’re buying in places that they want to live.
This is a big demographic, and it should be a part of your investment strategy. The millennial tenants we see flooding rental markets want to be in or near a city. They want homes in Austin, Dallas, and Atlanta. So, as an investor, there’s a huge potential in these markets. Austin actually has had the most growth in the country for the last three years. We know the millennial population wants urban areas.A good strategy is to pick out a suburb that’s close to the areas that they’re flocking to. In Dallas, you probably won’t have a lot of millennial tenants who can afford a glitzy new Dallas high-rise condo. But, if you buy a property in the suburbs, you’ll attract millennial tenants who want to be within commuting distance. They might be looking for a home that’s less than 30 minutes away from downtown, especially if they’re starting a small family. So, check out the outskirts when you’re looking for a profitable investment. You’ll find a reliable population of well-qualified tenants and a growing economy.Consider Atlanta and some of these Texas markets. In Frisco, right outside of Dallas, there’s a section of commercial real estate called Five Billion Dollar Mile. A lot of corporate headquarters are developing properties there. It’s where a lot of the new jobs will show up around Dallas. Invest there, and you won’t only have a lot of long term appreciation – you’ll have an endless supply of tenants with excellent jobs. Isolate your search to these economic and population-heavy areas.
We prefer long term investment strategies, but we know it’s not for everyone. If you’re only interested in holding onto a rental home for a short amount of time, with cash flow in mind, you’ll need to focus your search on areas where it’s still cheap to buy a property. It’s still important that rents are high in these areas; however, so you can earn the income you want.Take a look at Memphis, for example. This is a great market for short term investors who want to earn as much as possible in rent and not think too much about long term strategies. In Memphis, you can buy a great home in a desirable neighborhood for $150,000 or even less. With that reasonable investment, you’re going to earn a rent that’s around $1,200 or $1,300 per month. You’ll have immediate cash flow. You can find these types of numbers in markets like Indianapolis as well.Find out where these markets are. Do some research and get to know where you can earn the money you’re hoping to earn. There are a lot of areas in the Midwest where this is possible. Your best investment markets won’t necessarily be on the coasts.
The one thing you’re looking at when you’re trying to decide about an investment is how much that home will rent for. It’s important, before you buy, to research the average market rent in the community. Compare that rental amount to the purchase price, and crunch your numbers.You also want to look at vacancy rates because that will have a huge impact on your cash flow. You can find vacancy and occupancy rates on sites like Zillow Research. Buy a home in a market that has high occupancy rates. That will translate to lower vacancy, so you’ll have an easy time cash flowing. A vacant property obviously doesn’t bring in any rent. Not only are you losing rent, you’re paying to keep the house up and losing money on utilities, landscaping costs, and other expenses. You’re not counting on appreciation as a short term investor, so you cannot invest in a rental home that’s likely to stay empty.When you’re sourcing potential investment properties, don’t forget to calculate your maintenance costs. You don’t want to buy a property that has a 17-year-old air conditioning unit. If you have to replace that unit while you own the property, you’re going to lose money. Think about what you’ll need to spend on rehabs or renovations. Think about what will be required just to get the property ready for the rental market. If you have to pay $4,000 for a new air conditioning unit and you’re only cash flowing $200 a month, you’ll have a hard time earning any money off your investment.First, think about what kind of investment you’d like to make. Once you know whether you’re going to buy for the long term or the short term, you can decide on a market that meets your needs. There are a lot of opportunities to invest in real estate. Property values have gone up between six and eight percent over the last year or two.Think about your home value and what you’re hoping to do with that property. Then, we can help you find the right market and the right rental home.At Mynd, we help people identify great investments in markets across the country. We can source some opportunities for you and run a rental analysis to ensure you’re successful when you invest.If you have any questions or if you'd like to move forward, please contact us at Mynd Property Management. We’d love to learn more about you and help you choose the right investment.
Frisco is an up and coming area outside of Dallas in North Texas, and it’s seeing a lot of activity from real estate investors. This has prompted us to think about the reasons that landlords and investors are successful with their Frisco rental homes. There’s a lot of business and a growing population.If you’re thinking about buying a Frisco investment property, what do you need to do to ensure a successful experience?
Frisco is one of the fastest growing areas not only in the Dallas, Fort Worth, or Texas region, but throughout the entire country. It touches both Denton and Collin Counties, and about 25 miles from downtown Dallas.The growth of Frisco is due to a high quality of life, abundance of great jobs, and stable housing market. There are a lot of corporate headquarters that have settled into Frisco, including Toyota and Pepsi Co. Many of the major employers are health companies and tech companies. There are lots of white collar jobs with high incomes through employers like Kenexa, Amerisource, Oracle, and Randstadt.There are excellent schools in Frisco; the district is one of the top school district in Texas. There’s also plenty of opportunities for recreation and relaxation. People are happy to live in Frisco because of access to things like museums, parks, theaters, and outdoor hiking and fishing spots. There’s always going to be a strong tenant pool, which gives investors confidence when they choose a market like Frisco for acquiring rental homes.
One of the most important things that makes investors successful is not just assuming that a rental home in Frisco will be a profitable investment. You cannot simply buy a property because you know the market is strong and the economy is stable. Yes, there is growth and income. But, you have to dig a little deeper and know where you’re investing and why.To be successful with your Frisco investment, it’s important to familiarize yourself with the market. Get to know the schools in the area. Evaluate the traffic times to and from Dallas and Fort Worth. You need to know what’s already been developed and where people are investing. This will help you anticipate and absorb the market trends. You’ll get an idea of what’s coming next, and that’s going to help you do better with your rental property investment.Do your due diligence and your research.
Once you have thoroughly investigated the rental market, you’ll have to make sure you’re purchasing the right rental property. This is a key trait that’s common among all successful real estate investors: knowing your investment goals and developing a strategy to meet them.You need some solid investment criteria.Maybe you’re looking for a certain price point or you need to reach a certain rent level in order to feel comfortable with your cash flow. Perhaps you care more about appreciation, and you want to be sure the value of your asset grows steadily over time. We also work with a lot of successful investors who just need to park their money somewhere.You have to answer these “why” questions for yourself. You can work with the best Frisco property management company or the best real estate agent in the market, but we cannot answer the question of investment goals for you. We need to know what your goals are before we can help you, and only you can decide why you’re investing and whether Frisco makes sense for you.Your goal is different from the goals of other investors. Your definition of success is going to be different from the definition used by other investors. Pick the city that matches your goals and strategies. Then, pick an investment property that also matches those goals and strategies. It’s the only way to be successful when it comes to investing in Frisco real estate.
There’s a lot happening in the North Dallas real estate market, and Frisco is at the center of it. There’s a lot that contributes to the growth of the local market, including the fact that there’s no state income tax in Texas. This area is a very corporate-friendly community, and businesses are eagerly taking up space in a region that’s favorable to their own growth and profits. Texas is a right-to-work state, which makes it easier for builders to develop new real estate without unions controlling price points for labor.If you’re planning to invest right now or in the near future, you’ll want to keep an eye on how things continue to develop. There’s a lot of growth, and a lot of positive energy. This is a great area for rental properties that investors are planning to hold for the long term, and anyone who buys a rental property here or builds a real estate portfolio with Frisco investments will find they have a good chance at being successful.Success in the Frisco real estate market will depend on your goals and strategy.If you are interested in investing in Frisco or anywhere in the North Dallas market, we’d be happy to help you analyze options and talk through strategies. Contact us at Mynd Property Management for more information.Also, if you want to keep your real estate investment education going, we have a number of other opportunities to connect with us. You can learn more about investing in Dallas with us online. Visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.