The National Association of Realtors lists Dallas as one of the top 10 markets for investors in a post-pandemic world. With a growing population and not enough housing to keep pace, it’s easy to see why investors are flocking to the Dallas-Fort Worth area of North Texas.
Yet, if you are new to real estate investment or just expanding your portfolio in a lucrative market, it’s easy to become overwhelmed.
Today we’ll compare Dallas to other markets and unpack a few of the most desirable neighborhoods investors are flocking to. We’ll also uncover five of the most common tenant issues that Dallas landlords face and a few ways to mitigate them so you can expand your portfolio in a flourishing market.
Before hopping into neighborhood specifics, let’s take a bird’s eye view of the Dallas-Fort Worth Metroplex market.
According to a recent Buildium report, Dallas ranks…
The personality and particularities of Dallas neighborhoods could fill a decent-length book, especially considering the entire Dallas-Fort Worth Metroplex of nearly 8 million people. Today, we’ll look at three central Dallas neighborhoods with high percentages of renters that are particularly attractive to real estate investors.
One of the oldest neighborhoods in Dallas, Deep Ellum is just east of downtown. In 2023, Deep Ellum will celebrate its 150th birthday. A local music scene that has hosted many jazz legends throughout its history, such as Blind Lemon Jefferson, there’s even a well-known “Deep Ellum Blues” that has immortalized the neighborhood in song.
For real estate investors, this neighborhood is particularly enticing. The Deep Ellum neighborhood has an urban feel with a high percentage of renter-occupied households. It’s a multi-family unit investor’s paradise.
A haven for people of all ages, Uptown–just north of Downtown Dallas–is home to the Katy Trail, Dallas’ LGBT neighborhood of Oak Lawn, and high-rise condos popular with empty nesters looking for a central location. The dense urban district is home to luxury shopping, restaurants, coffee shops, bars, parks, and easily walkable streets. Plus, the majority of residents rent instead of own, so it’s ripe for real estate investment.
Oak Cliff is an expansive neighborhood southwest of Downtown Dallas encompassing many smaller areas like Kessler Park, Bishop Arts, West Oak Cliff, Red Bird, and more. An area with a mixed urban/suburban feel, Oak Cliff houses a high population of renters and a mix of multi-family units, single-family residences, and duplexes.
No matter the neighborhood you choose to invest in, Dallas real estate comes with its fair share of struggles. Here are a few of the top tenant issues you may face as a real estate investor and landlord.
Staying on top of maintenance is a challenge for many landlords. Landlords are responsible for keeping the property up to building codes, the security up to date, and common areas both clean and functioning. As you can expect, many other day-to-day maintenance tasks can quickly compound into a seemingly endless list. Whether you are struggling with keeping units cool during hot Dallas summers, or scheduling regular roof inspections, APM’s Go-To Maintenance Guide supplies general maintenance checklists and suggestions to keep your property in tip-top shape.
While the majority of tenant/landlord relationships are amiable, there are always a few tricky tenants that make a landlord’s life difficult. At APM, we find that the best way to find and keep good tenants is a combination of thorough preparation, adroit advertising, and well-communicated expectations, coupled with clear communication and mutual respect.
Once you’ve found tenants you’re excited about having in your space, it’s also wise to invest time in getting to know them to cement a positive relationship.
Alas, even with the most thorough tenant-selection process, things can occasionally divert from the best-laid plans. It is wise to understand the legal eviction process so you’re armed with knowledge in a worst-case scenario.
You can’t legally evict a tenant unless eviction standards apply equally to all tenants. If they don’t, you violate fair housing laws and put yourself in a dangerous position.
In every eviction, you are legally required to give a written termination notice to tenants which document the reason/s for their eviction. If a tenant does not respond, pay rent, or change their behavior, then you can take your case to the legal system. At this point, you’ll probably want to seek legal counsel to advise you on exactly how to proceed in your state.
If the eviction does go to court, you should have the following things in place to plead your case:
Once a court has ruled in favor of the eviction they will issue a writ of permission. The situation is now out of your hands. Note that you cannot legally remove a tenant yourself, that’s a job for local authorities. Remember, you also cannot shut off utilities or change the locks—it’s illegal and violates squatter’s rights.
While Dallas weather can be unpredictable, one thing you can count on is the need for functioning air conditioning. With 18 summer days over 100 degrees in the summer of 2022, you can expect the temperature in Dallas will be warm over half of the year.
On the flip side, the short winter can bring bitter freezes that residents are rarely prepared for. Landlords must ensure that properties can stand up to extreme temperatures on either side of the scale to keep tenants safe and comfortable.
Besides extreme temperatures, flash flooding is common, and mold in older properties can be a persistent problem if not addressed early and fully. Be sure to get a thorough inspection before finalizing any real estate investment, as well as a history of the neighborhood’s weather woes. Flooding effects, in particular, vary wildly from neighborhood to neighborhood.
One of the most efficient and effective ways to ensure your investment is set up for success is to partner with a local Dallas property manager.
Property management firms vary widely in the scope of services they provide, so start by asking yourself what you want a property manager to do for you. One owner may only want to delegate certain tasks and functions to a property manager while remaining very ‘hands-on’ in other areas. Another owner may want to take a more ‘hands-off’ approach.
Fees also vary by location, the type of property, and the estimated man-hours involved in providing property management services.
The decision to hire a property manager involves a great deal of thought and consideration. However, even if you were initially confident in your hiring choice, you may find that with time, you’re just not sure you’ve signed on the best property manager for your needs.
Start your search with APM’s ultimate property manager questionnaire to get the right property manager for your Dallas rental property the first time around. This way, you’re poised for success from the start.
You can also explore the top Dallas property managers online here.