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3 Reasons Property Investment in Dallas has a Bright Future

Property investment in Dallas

What does the future hold when it comes to property investment and management? 

That’s the question that plagues investors and managers when markets become volatile like they are now. The real estate market outlook depends heavily on the state of the economy, inflation, interest rates, and market projections. 

The good news is, despite some contradictory predictions, the Dallas rental market continues to perform well, as rents and occupancy rates have hit record highs and have stabilized.

“The future of the Dallas rental market looks promising,” says the owner and CEO of Class A Management,  Cathy Fontana. “We’re seeing positive things for all our clients’ Dallas properties.” 

With more than 40 years of property investment and management experience in the local Dallas market, Fontana says she is confident about the future.

“Now is a great time to own and manage multifamily properties in this area.”

Here are the top reasons we’re optimistic about the future of property management and investing in Dallas and nearby areas.

Reason #1: Demand Remains High

It’s no surprise that demand is high. Dallas continues to adapt to the needs of current and potential residents. Even though the area ranks first in new construction, the vacancy rate continues to stay low. 

In addition to attracting new residents, 62 percent of 2022 residents chose to renew their lease. The continued trend of potential residents from other states, such as California, also contributes to high demand. So, why is this area so appealing? 

Here are some of the top reasons Dallas is attractive to potential renters: 

  • A robust job market
  • Highly rated schools
  • Favorable local tax laws
  • Easy access to various entertainment venues

An appealing environment with ample opportunities is great for residents, but how does this translate into high returns on property investment? 

Reason #2: Market Analysts Love the Dallas RE Investor Outlook

Data from 2022 investment property research speaks to a promising future. Market research gathers and analyzes data property managers and investors use to make informed decisions about where to place assets. An expert manager knows market trends and outcomes, and how to leverage these into property management opportunities that result in investor asset growth. 

Research numbers take the following data into account: 

  • Number of days vacant
  • Percent occupied by renters
  • Number of prospective renters competing
  • Percent of renters who renew their leases
  • Share of new apartments completed in 2022

The results are in, and they show good standing and great potential for the Dallas property management market. The Dallas occupancy rate reached its highest at 95 % during 2022 and currently sits at 92.4%, ranking the city first in occupancy rates. In addition to high occupancy, Dallas was ranked as the third most competitive market at the end of 2022. 

How does this compare to other markets? Dallas beat out Houston, San Antonio, and Austin when it comes to Texas metropolitan markets. These areas also ranked high, with occupancy rates sitting just above 90 percent. 

Knowing where your investments sit within a market is good for big-picture analysis. Still, to ensure overall investment success, consider other factors more personal to residents. 

Reason #3: Residents Choose to Rent in Dallas

Here are five factors going beyond basic supply and demand to show why Dallas residents are choosing to rent, keeping investment properties in high demand. 

  1. Builders are catching up: New construction is catching up from Covid-19 delays. The worst of the slowdown seems to be over, but there are still some issues with supply and labor. Even with a large amount of new construction in the area, occupancy is keeping pace with development. 
  2. Home ownership is too expensive: Home ownership continues to trend downward. As prices stay high and interest rates continue to rise, home ownership is proving too expensive for many. What is disheartening for home sellers is positive for real estate investors. The situation increases the potential rental pool and rental market competition, helping maintain and raise rents and occupancy rates.
  3. Would-be buyers are risk-averse: There is just the plain old truth that many people are just too fearful to own a home in a volatile economy. Renting is seen by many as the “safer” alternative to making such a sizable investment, raising the national average age of first-time home buyers to 36 years old. Expert predictions from the early fall of 2022 were that rents would continue to rise over the first half of 2023, causing concern about renters’ ability to afford price rates. In reality, multifamily rents either remained stable or went down
  4. Younger adults prefer renting: New graduates and young professionals continue to show a preference for renting. Studio apartments tend to see the highest price growth for rental rates. In response, more units are being shared among younger tenants as they learn to navigate life outside of a school environment.
  5. Community keeps occupancy rates high: Owners might feel pressured to change up the look of a property to attract renters to maintain occupancy. This isn’t the case. Many different demographics are looking for properties, including communities just like yours. Your marketing should focus on attracting the type of tenant you want by accentuating your property’s unique amenities, location, and community characteristics.

Class A Property Investment Services: Your Partner for Profitable Investing

Many real estate investors are searching for property investment and management services in Dallas. Whether you live locally or simply own an investment property in Dallas, you need a management company that knows this city and keeps up with the changing market. 

Class A Management actively manages over 2,400 units in the Dallas-Fort Worth Metroplex. Our team offers a comprehensive menu of management services to maximize your investment growth. From feasibility to property renewals, purchases to divestitures, and all the property management in between, Class A Management has the experience to guide you to the best market opportunities. 

Contact us to see how we can help keep your property at occupancy regardless of market conditions. With Class A, the future for your property is in good hands.