Time to Invest

Dallas crowned one of the best real estate investment markets for 2017

Dallas crowned one of the best real estate investment markets for 2017

8917 Sweetwater Dr. house for sale in Dallas
Now is an excellent time to invest in a rental property, says HomeUnion. Photo courtesy of The Michael Group

Rent is a huge topic in Dallas right now, mainly because it just keeps going up. While that's not great news for renters, it's excellent for those doing the renting, and HomeUnion concurs.

The online real estate investment management firm recently released its 2017 National Single-Family Rental Research (SFR) Report, and Dallas-Fort Worth comes off quite favorably. The study ranks 31 metro areas on factors including "investment opportunities for 2017, yields, rental demand, investment home prices, and capital markets conditions." Put in plain English: If you can swing it, now would be a smart time to buy a rental property in DFW.

That's because our stellar job growth (105,000 new jobs are expected for 2017, a 2.9 percent increase) is doing its part to encourage the formation of new households, most of which will not immediately enter the ownership pool. Couple that will an expected 3.5 percent increase in rent and a vacancy rate that's expected to drop to 6.7 percent, and suddenly it's a great time to be a landlord.

The study breaks it down even further, pointing out that "Unlike many investment markets, investors in Dallas are moving up the quality scale, while traditional buyers are moving in the opposite direction. With strong price growth, first-time buyers are being priced out of the market, though stable job gains will keep those would-be homeowners renting in similar neighborhoods. With cap rates above 6 percent and strong fundamentals, investors should reap short- and long-term gains."

All these factors put DFW at No. 9 on the list, with data that is strikingly similar to that of No. 1 Atlanta. What keeps ATL at the top is its manageable entry prices for investors and a vacancy rate that's predicted to end 2017 at 5.1 percent, in addition to predictably healthy job growth.