As the economic recovery gathers steam, many real estate investors in Texas are finding that there is even stronger demand today for affordable rental properties than a few years ago.
The San Antonio economy is doing well with low unemployment rates, rising wages and a growing population. But there are signs that the prices of new and existing homes in San Antonio are taxing the budgets of middle-class families. Many of them have good incomes, but may not be able to afford rising home prices and down payments.
Last month, the National Association of Realtors stated that the sales of existing homes in San Antonio dropped 2.3% in April 2017. Prices have continued to surge, and sometimes multiple offers are coming in on some affordable homes.
The increase in prices in the last few years of existing homes has somewhat exceeded the rise in wages. So, how is this good news for investors?
Well, investors interested in buy and hold properties and high ROI investment properties in Texas should strongly focus on rehabbing under market value properties and renting them out.
There are plenty of San Antonio families who have enough cash to pay for a rental deposit and $1000 per month in rent, but lack the down payment or income to qualify for a mortgage. In our owner finance market, we are seeing many people who have the income to afford the mortgage payment, but simply lack the cash for the down payment.
This means there is a serious opportunity for the rental property buy and hold investor. Also, with San Antonio properties increasing substantially in value, the buy and hold rental property investor will have a serious chance to increase their equity.
Here is a really nice buy and hold rental property deal I am featuring:
Address: 106 and 110 Dewitt, San Antonio Texas, 78210
Description: Location Location, just south of downtown, short distance to the river walk and the new San Pedro creek river walk extension project (multi-billion dollar inner city revitalization): properties are going to double in value in the next 5 years. Both homes need to be converted into 3 beds 1 bath: estimated repairs for both projects: 80K-40K each, purchase price for both investments: 80K, Max After Repair Value: 119K each or 230K for both, Package deal.
Price: $80,000 cash
Exit Strategy: I recommend buy/remodel/rent then resale in 5 years
The under market value San Antonio investor can buy both for $80k and rehab each one for $40k each. You should be able to rent each property for more than $1000 each. And the increase in equity due to their location will make this a very high ROI investment opportunity.