Why I Did NOT Invest in Texas (Rental Property Market Analysis)

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In July 2020, I bought a rental house in Orlando, FL. A handful of people asked me why I did not invest in Dallas Texas in one of my previous videos, so here's a video answering those questions from a real estate investor's perspective. Here are the reasons why I did not buy an investment property in Dallas Texas. I hope this helps any investors out there!
Next in my series, I will cover how I selected the Florida market and searched for the house I ultimately bought. Follow for the out-of-state investment series!
If you need a realtor recommendation, I recommend Tiffany Theodore in Dallas (DFW) Texas area. Her email is tiffanytheodorecheng@gmail.com
Contents:
0:00 Intro
0:22 Property Taxes and Assessments
1:37 Market Competition in DFW
2:22 Investing Criteria
3:15 Return on Investment Expectations
New Rental House Pays for Maserati: • I Bought a Rental Home...
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Опубликовано:

11 июл 2024

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Комментарии : 124

@EdwardInTX 3 года назад

How YOU can buy your Rental House! (Part 1) ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-SUkS76XSscA.html

@johnlepkowski3831 3 года назад

I live in Plano Texas. Tax on my 3200 sq ft house is about 6k. That’s our total tax including school. No income tax. I’ve lived in several cities around the country and I’m amazed at what we get for the money here. Schools are completely rebuilt and updated every 20 years, roads are kept in amazing shape, parks and rec are top notch and beautiful. Government is easy to deal with and for most part keeps out of folks business. It’s $89 per year to register any car or any value. But most of all it’s a very pleasant place to live. Nice folks and lots to do. Schools in Plano are awesome.

@shambrown 3 года назад

I assume that you’re getting the homestead deduction .

@johnlepkowski3831 3 года назад

shambrown of corse I’m getting the deduction on my residence. I do think housing costs in my area is getting a bit out of hand. We are about 5 min from legacy west development and just sold my wife’s parents house. A older 1800 sqft place in need of updating. First day on market there were 73 calls. Sold that day for 20k over asking. As soon as a house is offered for sale or rent, it’s taken. Before coming here, my last home was in nyc. Taxes were about 3x what they are here when you take into account bridge fees, car registration, and everything else. You couldn’t pay me enough to go back to the northeast. I love it here. Gets a little warm (that’s a understatement) during summer but everything including my garage is air conditioned and electricity is about 7cents per kw so we can afford to air condition everything.

@40EntrepreneurDrive 2 года назад

@@johnlepkowski3831 do you mind sharing what company offers you the 7¢ per kilowatt? I've been looking to shave down my budget and my electric bill is my highest expense averaging about $400 most of the year with a dip down to $250 a few weeks in Spring/ Fall. at the moment I can't find anything below 10¢ pkw here in Fort Worth. Currently paying 14¢ pkw.

@sudhirraom Год назад

I do not how you managed to reduce the tax on a 3200 sf home. I live in Murphy Tx not too far from you and my tax this year is $7800 for 3100 Sf home. Every single point mentioned in this Video is correct. Only very long term investors can make some money from home appreciation.

@allymattcar 3 года назад

Extremely informative! Thank you so much for sharing!!!

@EdwardInTX 3 года назад

Thanks for stopping by!

@WestbyNorthwest 3 года назад

Great information and I totally respect your philosophy on buying cash flow rental property.That 15 percent rule is a great guide.

@EdwardInTX 3 года назад

Thanks! Hopefully all these purchases will allow me to retire comfortably someday

@keithscott7774 3 года назад

Great post! Patiently waiting for the 5 part RE series

@EdwardInTX 3 года назад

Working on it! I plan to cover how I identified the market and setup my RE searches next week.

@keithscott7774 3 года назад

EdwardInTX can’t wait! Thanks for sharing your journey.

@MillennialonFIRE 3 года назад

Very cool video. I had no idea about property value there. Thanks for sharing! Liked and subscribed new small youtuber here! Can’t wait to see the next one

@EdwardInTX 3 года назад

Thanks for the sub!

@simonassouline45 3 года назад

Good and informative blog!

@EdwardInTX 3 года назад

Thank you!

@SuyinOng 3 года назад

Cool video, Edward! Thanks for the insight into the property market in Texas

@EdwardInTX 3 года назад

Thanks for watching!

@SuyinOng 3 года назад

@@EdwardInTX Making my way through your videos!

@johnlepkowski3831 3 года назад

Very easy if you bought a house 20 years ago and lived in it. As a investor, this is probably not such a good time to buy.

@sweetheelys417 3 года назад

APPRECIATE this video! i totally forgot to consider property tax and landlord/laws

@EdwardInTX 3 года назад

Glad this helps!

@ellie7541 3 года назад

Wow, Edward, your video just came in time, I have been actively looking for an investment property in Edinburg/McAllen, Tx areas. In fact, I almost made an offer for an owner-financed townhouse 3 days ago. But, something, a feeling just told me to wait...anyways, the house in in "Option" now. I'm sure, I'll re-watch this video again to help me decide and review other out of state investment opportunities. Great information, thank you!

@EdwardInTX 3 года назад

Super cool! Glad to hear it helps!

@joel4210 2 года назад

That property probably doubled by now. The McAllen area is booming.

@CRPizza925 3 года назад

Great video, spot on with your info. Oak Cliff and Denton are about all that’s left for finding anything near that value.

@EdwardInTX 3 года назад

Thanks!

@autumnkim2384 3 года назад

Great video !! I’m currently in LA trying to move to Dallas and I found your channel ... I’ll be going to uptown Dallas area next month to check out the neighborhood. My co worker who lives in Plano recommend me uptown. What’s your thoughts? I’m in my 30s currently living in suburbs

@EdwardInTX 3 года назад

Uptown is a good area to live in!

@Thecoolguy249 2 года назад

Thank you. I though Corpuz christi texas is one of the good place to invest. any advice?

@rfink222 2 года назад

I bought a rental property for $200K near Austin, the property taxes have increased to $8,800 a year because the house doubled in value.

@nibzlegend99 2 года назад

Did anybody do Real Estate Express in Texas? Does anyone thing going over the summaries of each chapter and the mock exams will be enough to pass the test? atleast the national portion?

@bobwa399 3 года назад

Edward, I am not from the US and want to buy a cheap property some where between 10k-30k and then get at least USD200/pm NET rent AFTER all the deductions that may be. I don't know US property laws for foreigners and related Taxes and other deductions. Any information /guidance from you will be appreciated. Thanks.

@TheRealEstateInvestingAcademy 3 года назад

Appreciate the video but I think you may be wrong here. Yes, there are some headwinds as an investor but the state is positioned too well for BIG upside as an investor to not invest. There are what is called “edge markets” that make complete sense. I’ve been targeting 3 in Austin.

@REVerbtalk 2 года назад

I just subscribed to you too, don't find many so local on here.

@TheSkatereel 3 года назад

does it make sense to invest in neighboring counties that are less developed to save on property taxes? Or are the savings in property taxes usually not worth the lower rental income in those further city center counties?

@EdwardInTX 3 года назад

It does make sense to invest outward. Example being I'm in DFW but I looked at a decent deal in Crowley, which is 30 min south of Fort Worth. Your point on the balance between savings in property taxes vs the lower rental income is correct. It is possible to find deals though!

@vanesagonzalez8198 3 года назад

I loved your description about yourself... lazy investor! hahha Really helpful video!

@EdwardInTX 3 года назад

Thanks!!

@davidtrujillo9363 3 года назад

Hi Edward, Is it possible to buy income property in another state if you don’t own a home? I live in Los Angeles looking into buying in Florida since a spend a lot of time in the Cape Canaveral area for work 40% of the year

@EdwardInTX 3 года назад

Yep. I'm releasing a video on Wednesday starting this series and will release 5 parts total on this topic

@humlocker 2 года назад

I am just a beginner so I have a question that might sound like a child is asking. I own two homes in Texas. One is a rental property I own. the other is a new with a mortgage, i used the rental house to pay for the new house I lived in. your right about property taxes in Tx they keep going, unfortuately in Tex if you own more than one home only the one you live is exempt, and rent has to go up regardless, but now I m selling my rental house at 150k but after seeing your video I might want to think it over, the value of my house might go up since the census is showing San Antonio is the fast city growing and everyone is moving here. should I sell or should I rent it. also what did you mean saying you can only get your investments from class C? explained class C

@EdwardInTX 2 года назад

If you feel like it will continue to go up, keep it. Just make sure the rent covers all of your expenses. I can't justify purchasing a new investment that will cash flow at these prices unless I can have a strong feeling that it will continue to appreciate.

@PoultryFarms 3 года назад

I agree with you

@anahibustillos Год назад

Hi Edward! Now that its 2022 do you still feel the same? Loking between TX and NM...

@EdwardInTX Год назад

Appreciation is good, cash flow still sucks depending on how far from a big city you're looking at

@johnwest2986 3 года назад

Hey Edward, when will you be posting a video on how you went about finding the Florida property that already had tenants? I’m looking to invest soon and want to find a similar property. I’ll even buy one similar to yours if there are any available near yours lol.

@EdwardInTX 3 года назад

That'll be next week! I will explain how I searched for it and all.

@johnwest2986 3 года назад

EdwardInTX looking forward to it!

@Imperial0666 3 года назад

@@EdwardInTX p

@stanmoney8470 Год назад

I'm thinking of doing the same thing. I find better prices on Zillow out of state.

@amalHope3 3 года назад

In Austin suburbs, the property taxe is more than 3%

@danielkamui6559 Год назад

Where can you possibly find 15% cap returns

@PK-le2ok 3 года назад

Edward, do you happen to know of a solid property management company in either San Antonio or Henderson, NV?

@EdwardInTX 3 года назад

Fadra Kyle, First Serve Realty in Las Vegas. www.firstserverealty.com/

@monauman6111 3 года назад

How you manage the out-of-state rental property?

@EdwardInTX 3 года назад

I hire a property manager. I'll explain in a different video

@SteveAubrey1762 3 года назад

Yeah, my mum had a house in Plano, a little postage stamp yard- she paid, I think it was $3000/ yr. property taxes. I bought a 3-acre piece of property in Florida, with a 4 bedroom double wide manufactured home on it and I pay almost $700/ yr. I'm working on dropping a second manufactured home on the same property.

@EdwardInTX 3 года назад

Very cool! I plan to buy more in FL!

@mcl3491 3 года назад

great video. texas is very hard to invest in i see now why you dont maybe could u explain your process to finding a legit turnkey house that will work and is not a scam. also what you needed before you where able to begin investing out of state and tips on how to start. thanks also would love to maybe email you or someting or private message lmk

@EdwardInTX 3 года назад

Yeah that's going to be next week's video. I will show how I found the market, the house, and other related intro stuff. Feel free to email dtbdaman5@gmail.com

@simonehancock643 2 года назад

Since you invest in FL. Who do you pay to monitor your property?

@EdwardInTX 2 года назад

I put mine with The Listing Real Estate Management

@stanmoney8470 Год назад

That's true!

@butiki8408 2 года назад

So your not advising military to buy a house in texas?specially not staying more than 3 years?

@ezymarkz 3 года назад

That's not lazy - That's smart - regarding major works to property - I'm the same with my investments, major issues with foundation and roofing is a no-go for me, can end up in the $10s of thousands and would require the property to be vacant during those works. General maintenance, paint, carpet and minor cosmetics is fine

@EdwardInTX 3 года назад

Glad we're on the same page!

@ezymarkz 3 года назад

@@EdwardInTX - To make things worse - most tenants do not see the the value of a fixed roof (so long as it isn't leaking) or foundations as it isn't something they see daily - all that money spent and hard to justify jacking up the rent.

@EdwardInTX 3 года назад

@@ezymarkz Yup absolutely true! That's where I end up seeing a lot of patchwork on certain houses.

@PoultryFarms 3 года назад

Do you think buying a condo is a good start?

@EdwardInTX 3 года назад

If you can find one where you can finance it and the HOA fees aren't digging into your profit too much, yes.

@PoultryFarms 3 года назад

Thanks

@veo16 3 года назад

15% cash on cash is high. Nowhere is going to have that. 7% already beats the stock market’s volatility. Being happy with that would take you far.

@EdwardInTX 3 года назад

I agree. I'm happy about this investment

@giofromtexas2679 3 года назад

Yea property taxes is a mf'er in Texas. That's one main reason why I'm contemplating buying a home in Texas. Every year I would have to pay around $2500-3000 in just property taxes. For a modern 3/2/2 house. That's a huge chunk of change.

@EdwardInTX 3 года назад

Absolutely man. I think the property taxes are fine as it still beats paying $10k income taxes plus another $3k for a house in my previous state. It's just the tax increases that are a problem if the house is not under homestead exemption. Make sure you file that homestead exemption!

@giofromtexas2679 3 года назад

@@EdwardInTX oh absolutely I agree 100% with you on that!!!

@carabuchanan7384 3 года назад

East Texas here. Our home is 10k a yr in property taxes

@ashrafayyash7387 3 года назад

Spot on. I live in Austin and I invested here already but thats it for me. Investing in major cities in TX is simply not profitable anymore. Banking on appreciation is dump unless you can control the future. Midwest and little known cities is the places to invest.

@EdwardInTX 3 года назад

Been looking at midwest here as well. My Indiana property has been doing fine.

@ashrafayyash7387 3 года назад

I want to ask you if you can explain how do you get to know and meet agents and companies from out of state. Will you be able to make a video maybe on how do you get to the point where this agent was able to bring to you this deal.

@EdwardInTX 3 года назад

@@ashrafayyash7387 I mentioned it in Pt1 below in my mini-series! Pt 0: "House Pays For Maserati": ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-Hmhz1uL1oSo.html Pt 1: "Finding My Rental House": ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-SUkS76XSscA.html Pt 2: "Negotiate and Search for Realtor/Property Manager": ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-_zKqrVyqcO4.html Pt 3: "Insurance Search and Home Inspection": ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-aMyC8JQR-mA.html Pt 4: "Chasing $$$ and Property Mgmt": ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-C6S_YmHfzJ4.html Pt 5: "Lower Taxes Legally": ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-Kfta0ROqJw8.html Pt 6: "Rental Property Repairs": ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-Pj7_lyuuv6A.html

@ashrafayyash7387 3 года назад

Awesome I will check them out.

@andreytravkin7579 3 года назад

But in theory it should be harder to buy something out of state, right. Can you make a video on how you're searching for new deals across the country? What problems do you face and etc..

@davidhernandez5145 3 года назад

Yeah I want to see this too!

@EdwardInTX 3 года назад

In theory yes, but I overcame that mentally. After investing in Vegas, Indianapolis, and Florida, I've defined my own process you can follow. I will cover how I search for new deals next week. Problems might be in a later video.

@EdwardInTX 3 года назад

noted!!

@davidhernandez5145 3 года назад

@@EdwardInTX yes please. Can't wait. Thank again

@EdwardInTX 3 года назад

Just released it yesterday! ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-SUkS76XSscA.html

@REVerbtalk 2 года назад

I don't either, Texas is saturated, taxes, the overrun amount of agents with overpriced properties. Sellers who are in the clouds, The self-marketed inflation... on and on. I have a property in Ohio... smooth and with $2,000 down and I produce $1,400 a month on a $1,000 mortgage(non refi) and self-contained... Freakin steal.

@EdwardInTX 2 года назад

Sounds about right. Great to hear your perspective!

@keljarush103 2 года назад

it doesn't make sense buying in texas even to buy and leave behind . crazy numbers I cancelled 2 sales last month , one is $10,500 and the other one $7500 in texas a year . crazy not making sense

@EdwardInTX 2 года назад

Agreed

@knpatel86 3 года назад

What other market you recommend?

@EdwardInTX 3 года назад

Ohio, Arkansas, Indiana

@EdwardInTX 10 месяцев назад

If you need a realtor recommendation, I recommend Tiffany Theodore in Dallas (DFW) Texas area. Her email is tiffanytheodorecheng@gmail.com

@zakuma22 3 года назад

In what sane investing mind would you buy a Maserati considering depreciation and insane insurance costs?

@EdwardInTX 3 года назад

Considering my RU-vid channel pays for it rather than my main income, I'm ok going insane there. Fun fact: I didn't pay as much as you think, and my insurance cost is $1200/year.

@zakuma22 3 года назад

@@EdwardInTX That is actually not bad for a Maserati...

@EdwardInTX 3 года назад

@@zakuma22 Absolutely. I do understand where you're coming from though--other people I know more than 40k for theirs and about 2k-3k insurance per year. Mine comes in at less than a new Honda Civic.

@zakuma22 3 года назад

@@EdwardInTX I forgot the part that if you buy a used/old one, insurance will be a different story. Given that maintenance is not an issue, then it is a good move.

@liamsism 3 года назад

Do not hurricanes concern you in FL?

@EdwardInTX 3 года назад

Yes, but I've done research insurance coverage and flood areas with help of other investors

@southtexashometours6809 3 года назад

someone messed up bad!

@aktejas_2095 3 года назад

Welp time to buy more Bitcoin and Cardano.., clearly USD didn't improve the quality of life or protect any communities....

@SilverbugInc 3 года назад

This is the second video of yours I’ve seen and both are equally giving terrible investment advice. To anybody reading this, if you listen to any advice this guy is sharing, consider it strictly for entertainment (if that). Texas RE has been a cash cow... and will continue to be for the unforseeable future.

@keljarush103 2 года назад

it is negtive in texas

@davemeraz5117 2 года назад

Wow.... what a bunch of BS!!!!

@finmas 3 года назад

Dude, you need to blink on the screen. It looks like you were reading from a script all the way through.

@gumerzambrano 3 года назад

$200k is nothing for a house 😂😂

@EdwardInTX 3 года назад

Yep

@MigrantFromVenezuela 3 года назад

By your own admission, you're not willing to take the necessary steps to secure a property and make the rental profitable. That's poor advice to be giving. People don't mind paying more, as long as they see value in what you're providing. Your analysis also doesn't include long-term property appreciation as a factor in your decision. Texas is a sellers market, and it just sounds like you don't want to put the work in. So it's probably best that you stay in Florida

@EdwardInTX 3 года назад

You're right. For those chasing appreciation, this is your market.

@MigrantFromVenezuela 3 года назад

Why would anyone buy an investment property that won't potentially produce a return? The only thing more ridiculous than that is the advice that you're providing. Stop offloading your shitty advice to people in exchange for a few bucks...

@EdwardInTX 3 года назад

@@MigrantFromVenezuela Good move assuming I'm not producing any return in FL. This is RU-vid, and I'm not even a financial advisor. If you're so triggered, feel free to make a video response.

@MigrantFromVenezuela 3 года назад

I've provided a rebuttal, and that is your advice to people is pure bullshit. You asked why and I told you