10 Things You Need to Know When Investing in North Texas Real Estate
The Dallas/Fort Worth real estate market has been growing at an astounding rate. Residential market shows steady paced growth with increase of house prices in double digits driven by a rise in population. The tight lending restriction is also fueling the spike in market prices.
Population explosion is a direct effect of the increasing numbers of companies that are relocating to Dallas. There are currently over 15 companies that are to set up production plants or headquarters in the Dallas/Fort Worth area. The Dallas/Fort metropolex is locally known as every entrepreneur’s heaven. Taxes and cost of living is cheaper as well. The North Texas economy is one of the most diverse in the country, and one of the best places to find employment. These are only a few reasons for Dallas’s sudden popularity.
If you’ve been considering investing in Dallas real estate, here are 10 things you must know before you make your big move:
1: Is the home really worth it: Buying a home is one of the most important financial decisions. Yes, buying is 35% cheaper than renting but sure is a huge amount to invest at one shot. It is ultimately your decision, so make a wise one.
2: Familiarize the home buying process: There is no downside to being prepared. If unsure of where to start, a good resource is the Department of Housing and Urban Development (HUD) which has informative articles and videos. Another excellent starting place is to contact an experienced Realtor who can help answer any questions you might have. It’s very important that you find an agent you can trust, because you should feel comfortable asking any questions you might have about the buying process before you get into a financial situation you’re not entirely comfortable with. A good agent will do everything possible to make sure you’re asking the right questions and looking at the best home in your price range.
3. Reaching for the stars: Here, it’s the case of fixer-upper houses. Invest in the house only after you get it thoroughly inspected. Say a house in Highland Village opens up and miraculously it is within your budget; don’t jump at the first chance you get. Have the foundation inspected first, and make sure you know exactly what you’re getting into. This is another reason an experienced Realtor is invaluable: they might notice details you’d have missed on your own.
4. Research the house you want to buy: Asking simple questions like the length of time the house has been on the market for will provide insights on the market condition and house pricing. Fair price can also be determined by home market evaluation on comparable homes. Inspect the insurance, utility and tax bills before signing on the dotted line, and try to get as comprehensive picture as possible before you close.
5. Sell to buy: If you’re selling to buy, decide on which to conclude first. If buying is first, get the paper work in order (mortgage) to make sure you’re comfortable with your financial situation in case the unexpected happens.
6. Save up for the Down payment: Pay a larger amount for the down payment, and there are significant savings on the mortgage payments. Make sure you speak with an experienced mortgage lender who can explain all of your financing options, and what the pros and cons of each loan are before you make your decision.
7. Get the finances in order: When your finances are in order, qualifying for a loan or mortgage becomes easier. The essentials are: on time payment of bills, no credit mistakes and maintain a tab on credit purchases. If the new home finances are greater than your previous living conditions, try to live on the new budget for a few months to decide if you can afford it.
8. There are always deal breakers: If there are dealmakers, then there are most certainly deal breakers. A few potential deal breakers for you might include: a broken roof, sewer line issues, high-risk flood zone, restrictive local zoning rules on home improvement, plumbing issues and outdated electrical system. Look beyond the fancy kitchen countertops for tell signs of bigger problems. These deal breakers will vary depending on what you are comfortable spending on repairs, or you confidence in your DIY skills.
9. Don’t spend all that is saved: Always hold back a sum when you invest. It is wise to invest in a home that is less than what you can afford. Use online calculators that help you determine the sum you can afford based on the current income and outstanding debts. You do not want to end up house poor at the end of it all. Expert’s advice on 30/30 rule- 20% down payment, 10% buffer and mortgage less than 30% of gross income.
10. Only fools’ rush in: Take your time. There is no take-backs once the formalities are through. Take a look around before you seal the deal. If the dream home is already under contract don’t lose hope, offer a backup offer on the home. If you miss on a few contracts – don’t get discouraged. The Dallas/Fort Worth real estate market will always have highs and lows, and if you’re working with a great Realtor, you will find that perfect property.