Build a balanced SFR portfolio with Texas properties: Part 2

Single-family rental real estate investments offer a great way to diversify an investment portfolio, and cities throughout Texas are particularly well-suited to real estate investment. Despite declining oil prices, the Texas economy is booming, and investors can capitalize on the high demand for rental properties throughout the state.

The previous article in this series examined San Antonio and Austin, and demonstrated how properties in each city could provide cash flow and growth, respectively. This piece will focus on Dallas and Houston, two cities that combine steady growth with solid cash flow potential. Single-family rental investments in these regions provide a strong core for any investor’s portfolio.

Dallas 

While Texas is known for rapid home price appreciation, Dallas remains an affordable market to enter. Although the average asking price for Dallas homes has increased dramatically over the past two years, Coldwell Banker discovered the average sold price has been steadfastly neutral during the same period. Despite the consistency in pricing, Dallas maintains a robust housing market thanks to a steady influx of people.

The Census Bureau noted that Dallas’ population gained 4.8 percent during the three years between April 2010 and July 2013, and it is likely to continue growing. That population increase necessitates more housing, and Dallas home​ builders have kept pace. Unlike Austin, which experiences rapid price appreciation thanks to a lack of supply, Dallas is able to keep prices steady thanks to a stream of new housing starts.

In November 2014, Metrostudy, a real estate market research firm, reported that Dallas home starts had risen 69 percent from 2011, and experienced continued year-over-year growth into 2014. The demand for Dallas homes is high, but the city’s builders have kept pace, which ensures Dallas will remain a solid haven for investors.

Houston

The largest city in Texas is also one of the best for real estate investors. Houston’s sprawling economy includes the oil companies that are a Texas mainstay, but also incorporates one of the world’s largest concentrations of medical and biotech firms. While the area’s economic horsepower attracts a large number of workers from elsewhere, housing has not become overly expensive or undergone extreme price depreciation.

Like Dallas, Houston has experienced a shocking amount of new construction in past few years, which clamps down on appreciation that results from supply. The city also benefits from its sheer size, which affords builders plenty of land to create new homes.

While the Houston Association of Realtors reports home sales in the area declined 0.6 percent in January 2015 from a year prior, sales remain robust, and the dip in sales should afford builders an opportunity to catch up with demand, which could stabilize prices for investors.

If you want to add a solid base to your investment portfolio, but don’t want to deal with the hassle of locating and managing properties in the Dallas and Houston areas, register with HomeUnion. We prevet properties in the nation’s best markets for SFR investing, and, if necessary, can provide financing through an in-house lender. We will also handle property and asset management for your investments and keep you appraised of your investment’s status through an online web portal. It’s easy to build wealth with residential real estate and HomeUnion.

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