Investing in real estate in Texas is a great opportunity. With steady population growth, a strong economy, and homeowner-friendly tax laws, Texas has a lot to offer. Not to mention, realtors in Fort Worth, TX provide great opportunities with excellent earning potential.
Presentation of the Texas real estate market
The recent seller’s market has been challenging for people interested in investing in real estate. There’s a lot of competition. Texas has seen a large influx of people, adding nearly four million residents between 2010 and 2020. During the same period, the median home value increased by more than $112,000. This growth has made it difficult to buy real estate. With such a competitive market, it’s more important than ever to get guidance from Texas real estate agents to help find the right property.
Texas is also huge; there are lots of investment options in different locations. That’s why we’ve researched and listed five of the best Texas real estate investment markets to get you started. Deciding which market is best for you depends on your goals. Some investors focus on property appreciation to avoid paying annual capital gains, while others value the steady income that comes with large cash reserves. We’ve identified some of the best investment markets for different strategies below, but you can also use our rental calculator to price individual properties. To find the best Texas real estate investment market, we evaluated property value growth, affordability relative to median income, and yield based on median rent relative to home purchase price.
Huntsville
Located between Dallas and Houston, Huntsville is home to Sam Houston State University with Texas A&M nearby. It is also home to the Texas State Penitentiary, which provides a reliable source of jobs. With a population of just under 46,000, Huntsville has a small-town feel, but the foundations for businesses to thrive and grow. Because of the educational and justice institutions, the local economy is recession-proof. Historic downtown and Huntsville Park ensure that there is something for everyone, whether they enjoy the hustle and bustle of downtown or the beauty of nature. With a population growth of 3.2% per year, real estate values have risen steadily over the past decade. Whether you’re looking to buy and hold or renovate and sell, Huntsville is a great place to consider.
El Paso
With median home values below the national average, El Paso offers real estate that can generate high returns with a low starting price. With a growing population of over 650,000, El Paso has no shortage of people needing housing. The average rent is only 21.3% of the median household income, meaning that residents can afford to rent. El Paso offers something for everyone: mountains and hiking trails for eco-tourists, the El Paso Museum of Art for culture seekers, and the zoo for families. With its thriving economy, high-quality medical facilities, and role as a transportation hub, El Paso is an excellent choice for those looking to invest in real estate without breaking the bank.
Austin
Austin is an excellent example of a city that is actively developing. With its nuanced charm and numerous cultural events, this popular day trip destination has become famous across the country. Austin’s economic sector, known locally as Silicon Hills, includes tech giants such as Google, IBM, Tesla, and Amazon that provide attractive job opportunities and reliable employment. Over the past decade, the population has grown by more than 20%, which has led to skyrocketing real estate prices. However, this rapid growth isn’t always linear. Austin home prices have fallen recently, suggesting that the hot real estate market may need a break.
This is good news for investors who thought it was too expensive to enter the market. Lower sales prices mean a better entry point for new investors. Austin’s continued popularity as a tourist destination makes it a great short-term rental market.
Houston
Houston has some of the highest foreclosure rates in the country of any central metropolitan area. As a real estate investor, foreclosures provide an opportunity to buy with a fixed interest. With property values increasing by more than 20% over the past few years, Houston offers growing property values as you build equity in your home purchase. Houston is also home to one of the nation’s most important ports, more than twenty Fortune 500 companies, and several major universities. This strong economy means the city should remain prominent in the real estate sector for the foreseeable future.
Palestine
Buying real estate in prime markets can be a safe bet. But savvy investors know that the best returns can often be found in lesser-known areas. A prime example is Palestine, Texas. Although Palestine is not a place you’ll find on travel websites, it is statistically one of Texas’s best real estate markets. A charming city of fewer than 18,000 people, Palestine is sandwiched between Dallas and Houston, so you can enjoy the perks of city life without traffic or high prices. Palestine thrives on local small businesses and is known for its access to nature and historical sites.
Over the last year, real estate value increased by 19%. However, the relatively low cost of real estate in, combined with consistently high growth rates and reliable rental income, make investment in Palestine highly profitable. If you are looking for a booming market where you don’t have to compete with other investors to gain significant growth potential, Palestine could be the perfect market for you.
How to find undervalued real estate in Texas?
Buying undervalued properties can give you a good ROI. For many investors, this is counterintuitive, but what happens after the purchase will affect how much money you gain or lose from the purchase. Your return is always compared to your initial investment, so a good property appraisal is the best way to increase your return. Below are a few strategies you can consider to purchase discounted real estate.
Strategy 1. Use investment software functionality.
We live in a digital age. Therefore, to maintain a competitive edge, you need to use all the available tools. For real estate, this means using technology to search, analyze, and track transactions. This can help you find deals that elude other buyers so you stay ahead of the game. Real estate software helps Texas investors search for distressed homes and quickly contact owners through land tracking and direct mail campaigns.
Real estate software is designed to help investors analyze property values to calculate the maximum purchase price they can offer for a property before making a purchase; it allows you to track the performance and financial health of all your properties in one convenient application. You can receive regular reports on the profitability of your operations.
Strategy 2. Invest in acquisitions, auctions, and off-market real estate.
Buying distressed real estate is the best way to find value quickly, but remember that a diamond in the rough needs some polishing. Getting a good deal on a distressed property means you’re confident in investing the time and money to make your investment financially viable. When you don’t have the time or skills to hire a handyperson to fix your home, you can connect with the best local contractors to get the job done on time and at a fair price.
Strategy 3. Work with an investor-friendly agent.
Work with a top agent who is an expert in your local market. They will advocate for your best interest by helping you find great deals and negotiate like a pro. Good agents know local real estate trends and what areas to target and avoid. They will help you find deals before other buyers get to them, and keep you grounded in the laws and regulations that may affect your decision to invest in real estate.