If you are looking to invest in real estate, there are few places better than Texas right now. The state has a booming population, strong job growth, many major metropolitan areas, a diverse economy, and rock bottom interest rates. Whether you are just starting out in your entrepreneurial career, or you are a seasoned investor, here are some important things to know when investing in Texas.
Texas is big
No really, Texas is the 2nd largest state in the country by land area at 269,000 miles, 2nd largest in population at almost 29 million people, and 2nd largest by GDP at $1.6 trillion dollars. If you were to convert those numbers to a global scale, it would be the 39th largest by area, 47th by population, and 9th by GDP in the entire world. It’s absolutely gigantic. It has the company headquarters of 50 fortune 500 companies. All these numbers mean that there is opportunity to invest in the State, but there is incredible diversity in what is offered to invest in. A south-eastern megalopolis like Houston vs a western town like El Paso have massive differences in comparables. The rental to ownership ratio might be high in a college town like Austin, but low in a suburb like Arlington. Make sure you are aware that there isn’t a cookie cutter solution to investing in the state.
Know your budget.
Texas has very affordable housing compared to the rest of the country. But even the cheapest housing can cause issues if you don’t keep to your budget. With interest rates at historic lows, it’s a very good time to get in contact with different options. Hard money lenders, El Paso for instance, have interest rates starting at 7.99%.
Do your Research
Because of how large Texas is, it’s extremely important that you know where you want to begin investing. Every single city is different, and they each provide some sort of opportunity. Focus your research on some of the following questions:
*Who do you want to rent to? Do you want to rent to college students? Families? Professionals?
*Do you want your property to be in the more stable but lower profit large metropolises of the state, or do you want to invest in the high-risk high-reward West Texas oil and gas boom towns?
*What are the local trends in the area you are looking?
*What is the unemployment rate and job growth rate?
*What is the rent to ownership ratio?
*Would you rather become a landlord or a house-flipper?
*If you are going to rent to families, what do the local schools look like?
Having a solid answer to some or all of these questions should allow you to focus on certain cities in the state and on how you are going to strategize your investment going forward. If you are still having problems, consider consulting with a realtor in the area. Quality, indepth research will also allow you to maximise your budget by helping you realize whether the housing market you decide to invest in has room for negotiation.
Implement your Strategy
Now that you know what type of real estate you want, find the city in Texas that is right for you and begin prioritizing. If you want to rent to college students, then Austin or College Station is right for you. If you would like to start investing in oil boom towns, then take a look at Odessa. If you want a more stable city, then you can’t go wrong with Dallas or San Antonio. And if you can’t decide or you want to diversify, then Houston is right for you.
As you can see, Texas is a prime market for real estate. By taking this advice into account, and making sound financial decisions, there is no reason why you shouldn’t quickly profit. Take advantage while you can!