A friend and I were discussing rental properties recently and I mentioned one of my recent acquisitions in Dallas, TX. He thought it was particularly interesting so I decided to share some of the specific details here. I find Texas to be a compelling buy & hold market right now for a few reasons:
- Low Prices: My 4 bed, 2 bath, 2200 sq/ft house was $112k
- Rents are relatively high (that home rents for $1295 / month)
- Economy is BOOMING à check out Texaplex video
- 4 of top 10 fastest growing metro areas in the US
- JOBS: Texas added 700k+ net jobs in last 10 years
- Nearly half of new US jobs since 2009 were created in TX
This particular property was a “conventional” purchase where I came up with a 20% down payment. The mortgage, interest, taxes, and insurance costs are $760/month. Tenant pays utilities etc. The property management company charges 9% of rents to be the primary point of contact for any issues, collects rent via certified check/money order, and directly deposits it into my account each month.
The positive (take home) cash flow after all expenses is $420 / month. For those keeping score that equates to a 20%+ [cash on cash] return on the down payment. Compare that to what I was earning in my bank account, stocks, or mutual funds…crushing it.
My favorite part about this investment is that I’ve never spoken to my tenant, actually – I’ve never even been to Dallas. I just receive courtesy calls from my property management company making sure I’m a happy camper. So far it’s been a completely passive source of income.
If you’d like to learn more about my experience with “turnkey cash flow rentals” just give me a shout.
PS – Don’t forget I pay (at least) $2k finder fees on any ugly properties you bring in for me to fix & flip.