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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.

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The Top 3 Landlords Mistakes: How to Avoid Being a Nightmare Landlord

Top 3 Landlords Mistakes

The nightmare landlord. It’s that time-defeating persona many of us grew up with like Mr. Roper from Three’s Company and the infamous Mr. Heckles from Friends. They are impatient, demanding, and just a bit (if not a lot) intrusive. And, while these characters are just that: someone created from another’s imagination, they are based on reality. Because landlords like this truly do exist. Here are three landlord mistakes to avoid, so you don’t join their ranks.

1. Ignore tenants.

Especially after some time passes and landlords get set in their ways or think they’ve come to know when a tenant is a complainer or asks for too much, they begin to ignore or put off responding. Ignoring a tenant, however, could be your greatest landlord mistake. No matter what your personal feelings about a tenant are, they are the source of your income and success. Treat them as such. When not an emergency, ensure every tenant gets the same attention, with no more than 24 hours of waiting from the time of work order submission to the time of response.

2. Fail to communicate.

While the property is your business, it is the tenant’s home. They deserve to know what happens concerning the property with plenty of notice. So, don’t surprise them with construction or utility work; and definitely don’t surprise them with increases in fees or rent. Give notice often and consistently, and give it in different ways (email, phone, signs, etc.) to ensure everyone receives it and understands.

3. Invade privacy.

Just like Mr. Roper, there are those owners and managers who feel it’s their right to snoop, given tenants live on their property, they simply want to keep things orderly. But as previously mentioned, your property is also a tenant’s home. As such, you must give them the privacy and respect you would demand. Only when it’s reasonable to expect something suspicious from a tenant, such as illegal activity or an act that would place tenants and/or the property in danger, is it okay to pry. Even then, it’s best to let the police take over.

Avoiding landlord mistakes

These three common mistakes to avoid are just the beginning. Many investment property owners in Texas make other common mistakes. The best way to identify and avoid common landlord mistakes is to partner with an experienced property management company like Class A Management. With more than four decades of successful property management experience, our team knows all the landlord dos and don’ts. Whether you are a new owner or a seasoned property investor, we will work with you to avoid common mistakes and help guide your decisions to maximize your investment return. 

Make your tenant relationships positive. Contact the professionals at Class A Management. We are ready to be the face, eyes, and ears of your investment property.

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3 Texas Laws Every Investment Property Owner Should Know

3 Texas Laws Every Investment Property Owner Should Know

If you’re a property owner or manager in any state, you should always stay abreast of any laws that could potentially affect you, your tenants, or the property and business. As an investment property owner, having a basic knowledge of Texas landlord-tenant law, tenant’s rights, and pending legislation, is essential to your investment success. Here are three Texas laws every property owner and manager should know.

1. All Bills Paid

If your property has an all-bills-paid promise, this one is for you. This law states that tenants have the right to know if their utilities will be disconnected due to unpaid bills by the owner or manager. In other words, you are accountable to your tenants for keeping payments up-to-date. If you fail to make payments, the utility company you owe money to has the right to notify your tenants.

2. Breaking a Lease

In Texas laws, there is little leniency for tenants to break a lease; but there is a law that allows just that, and for good reason. According to this mandate, victims of domestic violence are now allowed to break their lease if they feel they are at risk. It’s not broken down, but it’s probably safe to say that the property owner or manager must be notified of the possibility from the beginning.

3. Pet Allowance

An updated law now gives disabled Veterans with post-traumatic stress disorder, who have a service animal, the same access as others with service animals for other reasons. This law also applies to your property’s pet policy. You may not prevent someone with a service animal from living on your property, even if you have a policy against pets. In addition to an exception to the pet policy, the property cannot charge a pet deposit for a service animal. 

Navigating Texas Laws 

Do you need help navigating Texas laws to help ensure your property is always in compliance? We can help. Class A Management offers an extensive range of services that covers all property investment and management processes. It’s our job to monitor changes in laws and advise you on how this impacts your properties. We also work with tenants through the lease management process to ensure every aspect of their occupancy is within state-mandated requirements. 

Contact us today with any of your property management questions. You will connect with an expert member of our team who will assist you in finding the answers you need.