Everything’s bigger in Texas, and when it comes to real estate, that saying stays true. The Texas housing market is one of the largest housing markets investors are find most appealing. With Texas being the second largest state in terms of both population and land area, there’s a reason real estate is a booming business in the Lone Star State. If you want to get your feet wet in Texas real estate, you need to know what opportunities await you. Keep reading to learn about how to finance a rental home and where to invest.
Financing a Rental Home
Are you looking to grow your wealth or increase your cash flow? If so, you’ve probably thought about real estate investing. However, if you’re new to real estate, you may not know where to begin. If you want to rent out or flip a home, you’re going to need to buy it first, and many investors can’t afford to pay for a home upfront. If you’re like a majority of the population, you may need to take out some sort of loan.
A mortgage loan is a popular type of home loan in which a bank or creditor lends money with interest while taking the title of the borrower’s home. Once the borrower has completely paid off their mortgage, they will officially own their house. Mortgages are a secure way to obtain a loan. However, they come with mounds of paperwork and can take months to acquire. You’ll need to have a strong financial standing and high credit score in order to be approved.
If you don’t have time to wait for a mortgage loan to be approved because a property you’re looking at may get snatched up, a hard money loan could be helpful. If you’re looking in Texas, consult with a lender who issues Houston hard money loans, for example. With a hard money loan, creditors are mostly focused on the equity of your home, rather than your financial history. Many real estate investors lean towards hard money loans because they can typically get funds within 7-10 days upon approval.
Where to Invest
With so much land in Texas, you may have no idea what area to invest in. To start, it’s best to consult with a real estate agent. Whether you’re a new or seasoned real estate investor, hiring a professional real estate agent will ensure you find a property where you can raise capital for real estate development. If you decide to dip your toes into Texas real estate while residing in a different state, you can also take advantage of your mobile phone by downloading a real estate investment app that will give you insight on which properties are for sale and how to purchase.
Here’s a look at some of Texas’ hottest areas to invest in:
Austin
As the capital of Texas, Austin has a lot to offer. With rent averaging around $1300 (as of May 2019), you can get a nice bang for your buck from tenants if you invest wisely. Located along the Colorado River, Austin has plenty of coffee shops, historic landmarks, and museums! Also home to the University of Texas at Austin, there’s plenty of professors and students alike looking for a place to stay.
Dallas
Home to the world’s largest wholesale trade complex, Dallas is a happening place. The average rent in Dallas hovers around $1200 (as of May 2019), and both young millennials and retired old timers are moving to this modern city. Start saving for a rental property now if you want to make the most of your dollar because Dallas is on the rise!
San Antonio
There’s a reason Texans are so proud of their heritage, and it’s all due to this historic city where the struggle for Texan independence came to a showdown at the Alamo. Aside from the historic aspect, San Antonio draws in large numbers of young tech workers looking to start a career in the computing industry, one of Texas’s fastest growing markets. Plus, a beautiful Riverwalk cuts through the city and has flavorful Tex-Mex food that will wow your taste buds!
Houston
There’s no problem in Houston when it comes to real estate investing. The housing market trends in Houston show this city has plenty of opportunities. As the largest city in Texas, rent prices range from $1,000-$1,200 (as of May 2019) and the area attracts a diversified crowd. With the Space Center in the heart of the city and easy access to the blue waters of the Gulf, investing in Houston real estate should be at the top of your list.
The Bottom Line
Real estate is a great way to diversify your financial portfolio and collect steady cash flow. With many cities across Texas attracting millennials and retirees, the opportunities are endless. From information technology to oil and education, Texas has a lot to offer, which is why you should save up and finance a rental home in Texas as soon as possible!