Fort Worth investment properties are looking more attractive than ever.
According to the U.S. Census Bureau, Fort Worth’s population ballooned by 24% from 2010 to 2020, making it the fastest-growing large city in the United States (of the 50 largest cities).
Despite this extreme growth, the National Association of Realtors still ranks Dallas-Fort Worth (DFW) as one of the top 10 most undervalued markets in the country for 2022.
So, if you’re searching for a hidden gem investment property, Fort Worth is a promising place to look.
Before you get lost down a property-hunting rabbit hole, it’s important to understand the overall market.
In this guide, we’ll look at:
- Important Fort Worth real estate market trends for 2023.
- Fast-growing neighborhoods and towns full of investment opportunities.
- Tips for finding and financing an investment property in Fort Worth.
Let’s jump in.
Why invest in Fort Worth real estate?
Fort Worth has a bright future.
As mentioned, it was the fastest-growing large city between 2010 and 2020, and the second-largest grower from 2019 to 2020. Population forecasts predict that DFW could hit nine million residents by 2030.
There’s just one small hiccup.
Fort Worth is attracting a huge influx of residents, but experts say many are currently commuting to Dallas and other nearby cities for work.
To curb this trend and grow the economy, Fort Worth is working hard to attract new companies and jobs to the city. At this point, the city doesn’t house nearly as many Fortune 500 companies as Dallas or Austin, but things are moving in the right direction.
The city is currently home to the American Airlines headquarters, and last year Charles Schwab moved in from San Francisco, bringing thousands of jobs along with.
The city’s proactive efforts have also paid off during the pandemic. While COVID-19 has plummeted many labor markets in the country, job growth in Fort Worth-Arlington rose by 2.2%.
If Fort Worth managed to boost the job market during a pandemic, imagine the growth potential in a post-pandemic world.
Fort Worth real estate market trends
Fort Worth continues to take 2022 by storm.
According to the latest report by the Greater Fort Worth Association of Realtors, the median home price sat at a record-high $341,000 in October 2022 — up 10% from last year.
While active listings are up a whopping 91.7% from last year, buyers are still snatching up newly listed houses within 35 days, only up 5 days than last year.
Rental prices aren’t looking too shabby either. According to Zumper, the median rent for a 1-bedroom apartment is going for $1,250, up 14% year-over-year.
These attractive rental prices and record-high home values come amid low housing supply. Inventory grew a slow increase with Fort Worth currently having 2.3 months of inventory. That means if no new homes were listed for sale, homebuyers would burn through the available inventory in 2.3 months. The current inventory is 1.7 months more than the historic low seen earlier this year in February 2022, when Fort Worth inventory was only at 0.6 months.
At present, Fort Worth would need 6.5 months of inventory to be considered a balanced market, which doesn’t seem plausible for the foreseeable future. Until a balanced market is achieved, the unchecked demand continues to drive up property values.
Despite Fort Worth’s massive growth, it’s still considered an undervalued real estate market.
According to the National Association of Realtors, DFW has a below-average home value-to-income ratio of 3.0. That means homes are still priced reasonably when compared to the median family income. For comparison’s sake, the national average home value-to-income ratio is 3.3, Austin sits at 4.0, and Los Angeles tops the charts at 7.9 (and rising fast).
In other words, Fort Worth real estate still has room to grow before it’s considered overvalued.
Hot neighborhoods for Fort Worth investment properties
Fairmount is a unique historic district located just southwest of downtown Fort Worth.
The beautiful neighborhood, dating back to the 1800s, has seen a rise in investment and growth over the past decade. All of these developments — including plans for a brand new skate park this year — continue adding value to the neighborhood. And even amidst all the interest, there is still room for new investors.
People love living in Fairmont, and it was recognized as the USA neighborhood of the year for social revitalization and neighborliness last year.
Westlake is a town located at the border of Denton County and Tarrant County’s northern tip.
It is the home of the new Charles Schwab headquarters, which moved in from San Francisco last January.
Charles Schwab’s Westlake campus houses over 2,800 employees and began a hiring spree of over 1,000 additional employees last June.
The number of Schwab employees is greater than Westlake’s entire population, suggesting the need for major real estate developments in the future.
Arlington falls smack dab between Fort Worth and Dallas, making up the eastern edge of Tarrant County.
It’s home to The University of Texas at Arlington, Texas’ fourth-largest university. With around 40,000 enrolled students and five years straight of record-setting numbers of incoming freshmen, it’s a great place to own a rental property.
Zumper also ranked it as the most affordable city in DFW, making it an accessible option for first-time investors.
Euless also lies on Tarrant County’s eastern border, giving it easy access to both Dallas and Fort Worth.
Over the past year, one-bedroom rental prices in Euless grew by 25%, according to Zumper, which is faster than any other town in the DFW metroplex. It was even featured in a New York Times piece on ideal places to live.
The demand for single-family rentals is also booming in other towns and neighborhoods along Tarrant County’s eastern edge. As the DFW metroplex grows, this central location could become increasingly coveted.
For even more hot neighborhoods in the DFW area, check out our guide on investment properties in Dallas.
How to buy an investment property in Fort Worth, Texas
The process for investing in Fort Worth real estate can be broken into five steps:
1. Determine your investment strategy
To save time property hunting, clarify what investment strategy you want to pursue. There are several ways to build wealth with real estate, each with advantages and disadvantages.
A few of the more common options include:
- Fix and flip
- The BRRRR method
- Turnkey rental properties
- New construction projects
Once you have a business model in mind, you can narrow down your property search and financing strategies.
2. Research your financing options
Since the best investment properties in Fort Worth move quickly, it’s best to know how you’ll fund your project in advance.
Three common financing options are:
- Conventional loans. Banks and traditional lenders usually offer the lowest rates, but their strict requirements make them inaccessible to many investors. They can also take months to close.
- Hard money loans. Hard money lenders in Fort Worth (or elsewhere in Texas) have loan programs designed specifically for real estate investors. They’re faster to close, involve less paperwork, and have more investor-friendly requirements.
- Joint ventures. You can also finance your project by pooling together funds from a group of investors. This typically requires a proven history of successful projects.
In many cases, winning a deal comes down to speed. And if speed is your main concern, a hard money loan is the way to go.
Whichever option you choose, take time to get to know a few lenders. That way, you’ll know exactly who to call when you find an investment opportunity.
3. Hunt for investment properties
You can search for investment properties yourself on popular real estate websites, but since this is where everyone looks, don’t expect to find any hidden gems.
For less competition, network with wholesalers and agents familiar with the neighborhoods you’re interested in. They might be able to help you find lesser-known opportunities that haven’t yet made it to the MLS.
Once you find a promising Fort Worth investment property for sale, do your due diligence. This includes investigating factors like:
- Vacancy rates
- Resident demographics
- Job and population growth
- Home value and rental price trends
- Percentage of renter- vs. owner-occupied homes
- Plans and proposals for future developments in the area
It’s tempting to pull the trigger the second you find an attractive deal, but don’t forget to run the numbers. If you’re planning to work with a hard money lender, they’ll want proof of the property’s investment potential.
4. Finance your project
Since you’ve already built relationships with lenders, this part should be easy.
If you decide to go with a conventional loan, know that it may take months before you’re able to close. If you’re confident the seller won’t find another buyer during that time, this could be a great option.
But if you’re worried the opportunity might slip through your fingers, a private money lender in Fort Worth can get you funded with a short-term residential loan in as little as 48 hours.
5. Refinance (if needed)
Short-term residential loans are only temporary solutions. After 6 to 24 months, you need to refinance.
If you meet your bank’s strict requirements, you can refinance with a conventional mortgage. If not, you can work with a hard money lender to refinance into a long-term rental loan. These loans are similar to traditional mortgages, just with fewer hoops to jump through.
At Longleaf, we can save you fees by bundling your short-term residential loan together with your refinance.
Need financing for a Fort Worth investment property?
Longleaf Lending is a Texas-based private lender and offers flexible loan programs designed for property investors who need to close as fast as possible. If you have any questions about Fort Worth investment property financing, give us a shout at 979-200-2823 or email@example.com.