A country, state, or city is only as strong as its real estate development. A healthy economy depends on a healthy housing market, and investors are constantly looking for new opportunities to buy properties that will generate income while appreciating over time.

Here are some tips that can help you select the right location for your next investment property in Texas:

Budget

Before you begin your search for potential properties, you must figure out how much money you can afford to spend on a monthly basis for this new property.

The Texas median gross rent in 2021 was $1,094. So if you can only spend $1000 on your monthly mortgage payment and another $100 for taxes, that would be ideal.

Remember that there are other costs you'll need to cover as well:

Insurance- the cost of insuring the property against fires or other natural disasters will be around 1% of the total property value.

Capital expenditure- you'll need to prepare for big expenses down the line, like if there is a need for repainting or plumbing repairs. There may also be issues that arise with the roof or foundation. You will have to factor in 2% of your home value yearly for this purpose.

Taxes- Texas has a tax rate of about 1.7% on home property taxes. So you'll need to be able to come up with about $1700 a year for this expense

Property Type and Purpose

You must decide what type of property you'll buy: is it going to be a commercial or residential investment? Will you use it as an income property or simply for your own enjoyment? The answer to these questions will determine the location and type of real estate you should look out for.

If you're looking to purchase a home as an investment, there are lots of opportunities available in Texas as it is one of the biggest real estate markets in the US. However, if you want something to use yourself, don't look for property in remote locations.

Location

Texas is one of the most populous states in the US with several large cities to choose from. You must decide where you'd like to buy your property. The key here is location, location, location- it's all about finding a place that will rise in value in the future.

Don't just check out homes in one area- consider multiple neighborhoods, because there are often great investment opportunities in areas where you wouldn't want to live yourself. You can also buy property in less developed areas for it to be developed later on into something that's more lucrative.

Buy property within a growing city so you'll be part of the development boom.

Buy near college campuses as they usually have a steady stream of people moving into and out of buildings as students come and go.

Rents also tend to be higher around universities.

Three cities that are great places to invest in property include: Austin, Dallas, and San Antonio. These locations have been some of the biggest real estate markets in the US, with a slowing economy and low vacancy rates making them even more attractive.

Neighborhoods That Attract Renters

You'll need to consider what areas tend to attract renters. These are usually concentrated around universities, hospitals, or large employers. It's not just students that need housing- plenty of people work in the area, and this means that you'll be able to find renters.

Also consider areas with lots of restaurants, stores, cafes, gyms- these places are attractive to millennials who will want to live near them. These areas can support higher rents than other neighborhoods where residents need to travel for shopping or entertainment.

This was meant to be a STARTING point to embark on your Investment Journey in Texas. When you're ready to finance your first investment property in Texas, be sure to give us a buzz by filling out the applications above or giving our office a call at (347) 696-0192.