Is Airbnb Dallas an excellent investment opportunity in 2022? Why should you invest there?
The Dallas real estate market is one of the hottest housing markets in the US. Homes in the state sell fast and attract intense bidding wars. A tale is told of one buyer who was offered as much as $50,000 by another buyer to walk away from a home they’d just secured. The buyer under contract still turned down the offer. Such a scenario should paint a clear picture of the current state of the Dallas housing market.
Airbnb businesses were majorly affected during the pandemic years due to travel restrictions and lockdowns. However, the year 2022 tells a different story since Airbnbs are on the rise again, and many people embrace domestic tourism.
Many short-term rental owners are considering Dallas, Texas, as a prime location for the Airbnb business. In this guide, we’ll discuss whether this market is great for Airbnb investment and why.
Table of Contents
- Why Invest in the Dallas Real Estate Market?
- Dallas Housing Market Performance
- Dallas Tourism Activities and Attractions
- Airbnb Dallas Ordinances
- How to Find Profitable Airbnb Properties in Dallas
- Key Takeaways
Why Invest in the Dallas Real Estate Market?
Dallas is one of the most popular metropolitan areas in the US. Many people consider it a gateway market for real estate investors looking for a dependable and liquid market to invest in. Fortunately, even with its popularity and soaring growth, the market remains accessible.
For starters, the National Association of Realtors ranks Dallas as one of the top 10 housing markets in a post-pandemic environment. While home prices in the city continue to rise, they’re surprisingly still affordable.
The affordability of the homes is brought about by the fact that the cost of living is reasonably low, the job market is robust, and the local cultural scene is vibrant. The cost of living in Dallas is about 50% less than in other major cities, such as New York and San Francisco.
Many people and businesses are moving to Dallas since there’s no state income or inheritance tax. Forbes also ranks Dallas as the second-best city for careers and businesses in the US. Based on recent research by the US News & World Report, Dallas is among the best places to live and retire in the country.
So, what does it mean for Airbnb Dallas investors?
Here are some crucial Texas real estate market data from Mashvisor to help us understand the Airbnb Dallas market better:
- Median Property Prices: $487,747
- Average Price per Square foot: $245
- Airbnb Rental Income: $3,012
- Airbnb Cash on Cash Return: 3.08%
- Airbnb Daily Rate: $181
- Airbnb Occupancy Rate: 51%
- Traditional Rental Income: $1,821
- Traditional Cash on Cash Return: 1.92%
- Days on Market: 72
- Walk Score: 46
The data above demonstrates that Airbnb Dallas is more profitable compared to traditional rentals in the same market. With a monthly Airbnb rental income of $3,012, you’ll generate enough revenue to settle your monthly property bills and remain with a handsome net profit. The Airbnb cash on cash return is also higher than the traditional cash on cash return.
The Airbnb occupancy rate is also higher than average. It means that your short-term rental will receive a constant flow of guests during the better part of the year.
Dallas Housing Market Performance
As we’ve mentioned before, the Dallas housing market’s been on an upward trajectory, and there’s data to support that.
In the past five years, property prices in Dallas increased by over 78%. According to the most recent report by Texas Real Estate Research Center, the median property price in Dallas was $360,000 in November 2021. It compares to $300,000 in the previous year.
Similarly, the average property sales price rose by 17%, from $373,003 to $436,662. The average price per square foot subsequently went up from $156.05 to $190.69.
The median days on market for listings in Dallas is 62 days. Single-family homes in the said market sell roughly 14% faster compared to a year ago. Active single-family home listings were down by 26.06% compared to the previous year.
With a median property listing price of $1,700,000, Preston Hollow is the most expensive neighborhood in Dallas. In contrast, Pleasant Grove is the most affordable neighborhood, with a median home listing price of $195,000.
Currently, there are 1,502 properties for sale in Dallas on the Mashvisor platform. The properties’ prices range from $64,000 to $4,200,000. The figures show that you can invest in the Dallas real estate market without much capital.
Dallas Tourism Activities and Attractions
One of the greatest pillars of any Airbnb business is tourism. If your Airbnb is located in a tourism hub, you’re assured of a constant flow of guests throughout the year. Luckily, Dallas boasts a lot of tourist attractions.
Here’s a breakdown of why tourists and travelers will book your Airbnb Dallas TX:
It’s no doubt that locals in Dallas love the outdoors. There are many green spaces and bountiful parks that bring visitors to the city every day. In total, there are over 22,000 acres of parks and 125 miles of biking and hiking trails.
White Rock Lake and Klyde Warren Park are two of the most popular green spaces here. The Trinity River is under development to become a 10,000-acre nature district. Once complete, it will be 12 times larger than Manhattan’s Central Park.
The Dallas Zoo is undoubtedly one of the biggest tourist attractions in the city. It was established in 1888, meaning it’s one of the oldest zoos in the US. The 106-acre park is home to 2,000 exotics animals from over 406 different species. The zoo is popular with families who flock to the park to see the Giants of the Savanna, Wildlife Amphitheater, the Otter Outpost, and the Endangered Tiger Habitat.
Local History and Museums
Dallas packs a punch for history lovers. The African American Museum houses a myriad of displays of African American historical, artistic, and cultural material. You’ll also find full references to traditional African themes and cultural icons. The museum is also home to a collection of artworks alongside a historical archive and library.
Opened in 1903, the Dallas Museum of Art is one of the largest museums in the US. It showcases a collection of more than 24,000 works of art from America and around the world. It includes everything from ancient artifacts to contemporary art. Art highlights in the collection include art and cultural artifacts from Egypt, Rome, and Greece.
For aviation history lovers, Dallas will allow you to experience the time of your life. The Frontiers Flight Museum features more than 30 aircraft and an impressive display that shows you the journey from the beginning of aviation from Leonardo Da Vinci to modern-day space exploration. Another lovely aviation museum in Dallas is the Cavanaugh Flight Museum. It houses a collection of historical aircraft stored in a huge hangar and various other exhibits and artifacts.
The shopping scene in Dallas is one to die for. There are more shopping centers per capita in the Dallas-Fort Worth Metropolitan area than in any other US city. The city is home to the Neiman Marcus store and Highland Park, which is the city’s oldest shopping center. Dallas offers an abundance of shopping stores and shops to meet your shopping needs.
Dallas is home to a vibrant local food scene. Texas is popular for Tex-Mex and barbecue. Barbecue restaurants, such as Pecan Lodge, run out of barbecue almost every day. Residents religiously adhere to Taco Tuesdays, which also include complements of frozen margaritas and queso. The Taste of Dallas food festival also attracts tens of thousands of visitors to the city every summer.
The abovementioned tourism attractions and activities are proof that travelers flock to Dallas throughout the year. It means that your Airbnb Dallas Texas will see a good occupancy rate.
Airbnb Dallas Ordinances
As you can already see, Dallas is one of the biggest travel destinations in the US and the entire world. Dallas hotels can be expensive and even unavailable, especially during high seasons. It shows that investing in an Airbnb in Dallas is profitable since demand is always sky-high.
If you’re already toying around with the idea of becoming an Airbnb host in Dallas, you need to be aware of the Dallas Airbnb laws and regulations before you can proceed. In such a way, you can do things the right way and avoid possible penalties or fines along the way.
Currently, there are no official laws and regulations surrounding Airbnbs in Dallas. However, if you own a condo located in a Class A dwelling, you may be prohibited from running an unhosted rental for less than 30 days.
In addition, remember that your location HOA may have particular bylaws that can hinder your Airbnb business. Some may impose minimum or maximum lease periods, while others even outrightly prohibit using properties for vacation rentals. Also, keep in mind that listing your home as a vacation rental may attract additional property taxes.
Some property owners living close to short-term rentals in Dallas recently lodged a formal complaint against the Airbnbs. Most of the complaints relate to noise, congestion, and safety. As such, the local authorities are looking into potential regulations for vacation rentals. You might want to keep your ears to the ground for that.
As we always say, consult the local authorities and your real estate attorney to avoid any legal issues.
How to Find Profitable Airbnb Properties in Dallas
Investing in Airbnb Dallas isn’t that much of an uphill task. It doesn’t mean that you should invest blindly. You need to carry out your due diligence and conduct an Airbnb analysis to find the most profitable Texas investment properties.
Airbnb analysis involves looking for the hottest neighborhoods in an area, analyzing historical data and predictive analytics, and also calculating your potential returns from a property. It looks like a lot of work to do manually and organize on spreadsheets. Don’t forget that the calculations should be accurate because you’ll be making business decisions based on the numbers.
To help you with the calculations, you can turn to Mashvisor. To start with, Mashvisor is a real estate data analytics platform that was developed to help investors carry out neighborhood and rental property analyses quickly and efficiently. All the data you find on Mashvisor is based on real statistics and the existing performance of rentals in the market.
You don’t need to worry about the credibility and reliability of the data since Mashvsior pulls it from reliable websites, such as Airbnb itself and other short-term rental listing platforms. The best thing is that you can carry out and complete your analysis and calculations in just a matter of minutes.
Here is a breakdown of the real estate tools you find on Mashvisor:
Real Estate Heatmap
Location is one of the core pillars of any real estate investment. You should strive to research and understand the real estate market’s historical performance and future trends. The process can be a bit complicated since you’re also trying to make predictions about the future.
Mashvisor’s Heatmap tool helps you identify the most profitable neighborhoods in the Texas housing market. The best thing about the tool is that you can carry out market analysis even in a city you may not be familiar with. The analysis you carry out with our Heatmap is based on crucial metrics, such as cap rate, cash on cash return, rental income, and occupancy rate.
Rental Property Finder
After identifying a profitable neighborhood, you now need to find a lucrative property to invest in. You want to find a Dallas investment property that matches your criteria. Driving through neighborhoods to find such property can be time-consuming and energy-draining.
Mashvisor’s Property Finder is one of the best property listings platforms you can find. It lets you search for profitable property in just a matter of seconds. You can filter through the search results using a number of filters to identify top-performing properties.
Rental Property Calculator
The Rental Property Calculator helps you analyze a rental property further by determining its profitability. It’s also referred to as the Investment Property Calculator. The tool relies on predictive analytics to provide you with reliable estimates of the property’s rate of return on investment metrics, namely cap rate and cash on cash return.
You can compare different properties by looking at their performance potential so that you can identify the best one for your investment strategy. Also, the calculator stands out since it uses both traditional and Airbnb predictive analytics so that you can identify an ideal rental strategy for your investment.
Related: What Is a Good Cash on Cash Return?
Investing in Airbnb Dallas offers a lot of profit potential. Such an investment will propel you toward your income and investment goals. The best thing is that you don’t need to need a lot of capital to start.
Mashvisor is the best platform for you to walk along your real estate investment journey. We provide useful tools that will help you conduct reliable neighborhood and property analyses. Book a demo to learn more about how our tools work.