It is a Landlord’s Market in Dallas Texas

I’ve been watching the rental market in the greater Dallas area for a number of years. It’s finally a landlord’s market again.

Since 2008 we have seen a steady increase in capitalization and occupancy rates. We’re to the point today that any decent rental property is leased in less than a week.

There’s nothing magic about the increase. It’s simple economics. As the availability of easy money dried-up in 2008, those would-be buyers went back to leasing homes. This allowed the glut of inventory we once had to slowly decrease.  This stabilized occupancy rates and prevented the downward spiral of capitalization rates we saw during the market boom.

Come forward to 2010 and there are a couple of other factors that are driving the need for rental and lease homes in DFW.  As homes went into foreclosure or were short-sold, those homeowners had no choice but to look for rental homes. While the Texas economy is stable, many of the people who could still qualify for a mortgage decided to sit it out and continue to rent. These two factors have basically drained the rental market in the area.

Currently I have almost 50 people looking for rentals and there are so few available. As soon as they come on the market, there are lots of showings and multiple lease applications.

I listed a large home in Frisco on a Friday. I had four applications on Monday. These were solid applicants with high credit scores, little debt, and substantial incomes.

We recently purchased a property for a local investor and leased it for him in less than a week. The Gross Rent Multiplier exceeded 10 with a Capitalization Rate of about 6.5 percent. This is prior to taxes and does not factor in appreciation over time.

It’s a great time to purchase investment property! Prices are low and the need for rental homes continues to climb.

Are you looking to purchase investment properties? Contact us! We have the experience and knowledge to find good investment properties, lease them to suitable tenants, and provide on-going property management if needed.