The city of Dallas is one of the most vibrant and fastest growing cities in the United States. As home to a number of prominent institutions of higher learning, a mix of professional sports teams and many significant historical sites, Dallas is an attractive city for people and businesses who are looking to relocate. The attractiveness of the city to those looking to move also makes Dallas an attractive location for real estate investment. There are many factors that make Dallas real estate a good investment opportunity for both local and national investors to consider.
Continued Steady Population Growth
When making a real estate investment, an investor needs to know that there are prospective renters and buyers in the local real estate market. As Dallas has grown from a small farming community to a thriving oil producer to a modern metropolis, the city’s population has steadily grown. With over 1.3 million residents in the city and well over 7 million in the Dallas / Fort Worth Metropolitan Area, there are plenty of prospective buyers and renters in the Dallas market. Best of all, the area’s population continues to grow. In fact, the city’s population has grown by about 10% in the last 10 years.
High Rent to Home Price Ratio
The Dallas real estate market has a high national ranking in the ratio of rental price to home price. The standard ratio used in the industry is property cost to annual rental income. In the residential market, the ratio in Dallas is about 16:1. This means that the average property will pay for itself in about 16 years. With even a 100% equity, 30 year fixed mortgage on a residential property, a property with a ratio of 16:1 will immediately generate positive cash flow for an investor. Commercial property rental ratios and occupancy rates in Dallas are also above the national average.
The oil industry has always been the traditional anchor of the Dallas economy. While oil still plays an important role, the Dallas economy is well diversified and is not dependent on oil or any other single industry. In fact, the unemployment rate in Dallas is generally lower than the national average due to the city’s strong economy. Some of the large industries that play an important part of the Dallas economy include communications, technology, medical and education. The diversification of the area’s economy makes Dallas an attractive place for real estate investing as investors need real estate renters and buyers with a strong, steady income to fuel the local real estate market.
Dallas presents investors with any type of property they may want including commercial and residential properties that range from newly built to historic. The city also has a variety of types of properties from ultra luxury to more affordable, basic properties for investors to consider. No matter what type of real estate investment a specific investor may be looking for, he or she is sure to find just what is needed in the Dallas area.
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