Forbes magazine reported this month that Texas is one of the best real estate investment property states in the country. In fact, it called it the United States of Texas because of the various attractive real estate markets in the state that are very different from one another. While the oil business is synonymous with the Lone Star State, the article notes that oil exploration, pumping, processing and financing occur in various real estate markets in the state, and there also are other industries in some Texas cities that are more important than ‘black gold.’
Houston is a difficult market for some real estate investors right now because it is hard to know what the long term effects of flood damage are. However, the possibility for future flooding could encourage more people in Houston to rent and not buy, which could lead to more rental property demand.
Dallas has been a popular place for real estate investors but prices have been climbing 10% per year lately. The higher prices mean more people turning to rentals, so this could be a good fit for many rental property investors. But prices are high and going higher, so some landlords could be priced out of the market.
Probably the most difficult market in Texas right now is Austin. It is a more challenging investment market right now because prices are so high. Rapid growth of the population led to a doubing of home prices in the last 10 years. The growing tourist and tech industries have really increased economic growth which is good, but prices are quite high. Investors who do buy here often find that the best path forward is to subdivide a large house into several units.
The good news for San Antonio real estate investors is this local market is one of the best in the states. Population growth has been solid but not so high to overwhelm the real estate market. Job growth is strong and tourism is more important in this city than oil. The strong military presence here leads to a strong demand for rental property. Home prices are generally in balance with incomes and rents, although home prices most recently did rise in some parts of the city by 10%. The rental property market in San Antonio is quite large, with 40% of people renting at this time.
Forbes reports the currentl population of San Antonio is 2.3 million, with 6% population growth over three years and 3.1% job growth rate. Home prices went up 8% from last year and the average home price is $235,000.
Most of my real estate investment properties have been in San Antonio over the years and I have done very well. Prices are higher today, but it is still possible to make at least 10% per year on your real estate investments here.