Investors find Texas attractive because of its booming economy, affordable housing and cheaper land prices, steadily growing population, and the fact that it is a homeowner-friendly state and without income tax. Together, these elements create a lucrative rental market that attracts investors from everywhere.
Reasons investors are attracted to real estate in Texas The state of Texas has one of the most attractive rental real estate markets in America. All the reasons that point to this state being a more favorable investment environment boil down to profitability, or in other words, a hot rental market. With that in mind, let's start looking in detail at why investors prefer to buy and own properties in Texas:
1. The Lone Star State offers a robust economy
Texas is known for its booming economy and low unemployment rate. Its high employment rates mean that there are more workers in the area who need housing. In addition, since the majority of the population is working, the vacancy and tenant turnover rates are low, because when you have a job, you can pay your rent.
So why does Texas have a thriving economy? This is due to large Fortune 500 companies moving into this state and other large companies moving into the Lone Star State as I write. Additionally, the technology and healthcare sectors, along with major universities, play a significant role in creating many stable, quality jobs for Texas residents, resulting in an increased need for rental real estate in the region.
The number of successful large corporations in this state creates a favorable economic climate which is why rental property investments in Texas can be so lucrative.
2. Real estate investors find Texas properties attractive because they are affordable
Another reason real estate investors love Texas is because housing is so affordable compared to most other states. Why is this so? Texas is known for its low cost of living, which translates to lower construction and labor costs. When these two items are cheaper, so is the cost of real estate.
The Lone Star State also has an abundant amount of land available, which translates into lower costs. To fully understand this, imagine that you are trying to buy land in California, where building land is very hard to find, causing prices to skyrocket.
In summary, the lower the purchase price of your investment property, the higher your return on investment will be, which is a very attractive incentive to invest in real estate in Texas.
Even when real estate is affordable, you may need additional financing. If so, visit our low interest financing page to find out what Fund & Grow can do for you to make the purchase of your next property possible.
3. You can enjoy the benefits of a landlord-friendly state.
When choosing a state to invest in real estate, if it is not owner-friendly, run away as quickly as possible because it is not worth the hassle or loss of income.
If you've been in the real estate investing business for a while, you know exactly what I'm talking about. Raise your hand if you've ever had a tenant take advantage of the system by living for free in the property YOU own. This has happened to me before, but never again, as future rental properties that I buy or build are now in Texas, as it is a very landlord-friendly state.
A landlord-friendly state means that it does not favor the tenant when they violate their tenancy agreement, as some states do. No, they favor the landlord, and their laws are put in place to take care of those who have a tenant who is not respecting their lease.
This allows for a quick eviction process, instead of dragging on for months and months, which can cost you a lot of money in lost rent and legal fees. Ok, now Texas looks pretty good to you, doesn't it?
For those of you who have designated yourself as the owner of their assets, you should check out this software that helps you manage your assets more efficiently, which can save you money. To learn more, check out the Landlord Studio website. It's designed to perform tasks like selecting tenants, tracking expenses, and more.
If you want to learn more about states that promote landlord rights, feel free to read our article titled – The 5 Most Landlord Friendly States.
4. Rental real estate in Texas is attractive because there is no state income tax
Every penny counts when trying to reduce your tax burden, but what if you could save thousands? Well, that's what you can do when you invest in rental property in Texas. This is because you will not be subject to state income tax, which can definitely increase your return on investment.
This is an important reason why real estate in Texas is attractive and worth considering. Since you will still have to pay federal taxes, I would like to recommend a book that I have read many times. You can find it on Amazon; it's called Tax-Free Wealth.
Additionally, you can consider reducing your tax burden even further by setting up a corporation. This will also allow you to protect your personal assets. I have clients who work with Royal Legal Solutions, as well as Corporate Direct. Both of these companies are excellent at creating an entity such as an LLC that you can put your rental property into, resulting in significant tax savings.
5. Its growing population drives a need for more rental properties
Another reason real estate investing is attractive in Texas is its growing population – there are probably people with U-Haul trucks on the highway going there right now. How can I know? Because this state has the second highest population rate in the United States and it has been growing steadily.
Data shows that in recent years, about half a million people have moved there every year. Many of them are trying to leave California, a country where real estate prices and the cost of living are high and houses are piling up because there is not much land left.
So what does this mean for real estate investors? This means that everyone who moves to Texas every year will need a place to rent, a place to call home.
As population statistics show steady growth, the need will continue. Property investors can take advantage of this opportunity, knowing that it means their properties will be rented out quickly, and they will have a low vacancy rate. In summary, this state offers a high demand for tenants, which makes rental property investments in Texas a safe avenue to build great wealth.
Which Texas city is best for real estate investors?
There are a few major rental hotspots in Texas that real estate investors prefer, these would be Houston, Dallas, Austin, and Lubbock. However, in my many years of dealing in real estate in Texas, I have found Lubbock in West Texas to be the best place to buy rental properties.
Expand your portfolio with lucrative rental property investments in Texas!
Seasoned investors, as well as those just starting out, are drawn to buying and owning real estate in Texas for the same main reasons – it's a great place that can quickly grow your portfolio, help you build great wealth and make your life easier as an owner.
If you want to invest in real estate in Texas, particularly in Lubbock, Morris Invest can provide you with new construction cash flow rental in this area. We make it easy for the investor by taking care of every detail – we even place a tenant for you, as well as a property manager.
We basically prepare you to receive consistent monthly rent checks that help you build wealth the smart way. You can schedule a free phone call where we can answer all your questions and talk about your investment goals. We look forward to talking with you and helping you create cash flow through real estate investing!