Airbnb Dallas: Why & Where to Invest

If you’re looking to invest in Airbnb Dallas, here are some guidelines that will help you expand your portfolio and maximize profits. 

Dallas is an excellent place for investing in real estate. It’s got low crime rates and living costs, which make it easier for tenants to pay their rent. 

Table of Contents

1. Dallas Real Estate Market Performance
2. 4 Reasons to Invest in the Dallas Real Estate Market
3. 3 Best Areas for Airbnb in Dallas
4. 3 Tips to Run a Successful Airbnb Business

The Dallas real estate market has a huge potential for seasoned investments. The attraction of this real estate hotspot is reflected in many favorable factors, such as low living costs, low crime rates, and a growing population.

However, investing in a real estate market implies a deeper and more thorough analysis. For example, investing in Airbnb Dallas requires the real estate investor to consider all the factors specific to this investment strategy and evaluate the potential profits.

Ultimately, you’ll find the answer to the question: Why and where to invest in Dallas?

To help you reach your decision, we’re going to break down everything we know about the Dallas real estate market, some hotspots you should research, and tips for running your Airbnb business.

Dallas Real Estate Market Performance

Over the years, Dallas has significantly risen on the ladder of real estate markets with potential gains.

First and foremost, Dallas is one of the most popular metropolitan areas in the US. It’s also one of the fastest-growing areas at the moment, with almost eight million residents. 

Many people consider it a gateway market for real estate investors looking for a dependable and liquid market to invest in. 

The affordability of the homes is due to 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. 

Let’s take a look at the latest real estate market data from our May 2023 location report:

• Median Property Prices: $679,041
• Average Price per Square foot: $469
• Days on Market: 18
• Number of Traditional Listings: 5,495
• Traditional Rental Income: $2.937
• Traditional Cash on Cash Return: 3.29%
• Traditional Cap Rate: 3.35%
• Price to Rent Ratio: 19
• Number of Airbnb Listings: 3,437
• Airbnb Rental Income: $2,614
• Airbnb Cash on Cash Return: 1.79%
• Airbnb Cap Rate: 1.82%
• Airbnb Daily Rate: $165
• Airbnb Occupancy Rate: 36%
• Walk Score: 48

As you can clearly see, investing in Airbnb in Dallas isn’t as profitable as owning a traditional rental property given the difference in cap rates and cash on cash returns. However, investing in a short term rental in Dallas still isn’t a bad idea considering its popularity among tourists and visitors. It attracts over 22 million people who spend more than $4.4 billion in the city every year.

Related: How To Calculate Cap Rate for Potential Income Property

Rental Arbitrage in Dallas: Is It Legal?

Yes, it is.

It’s perfectly legal to run a rental arbitrage in Dallas. If your Airbnb business continues to grow over time, and your goal is to purchase an investment property, engaging in rental arbitrage can be your first step. 

The only disadvantage of this rental strategy is that you’ll have to invest a bit more money in equipping your property if you want to attract a specific tenant group.

4 Reasons to Invest in the Dallas Real Estate Market

As we’ve mentioned before, the Dallas housing market’s been on an upward trajectory, and there’s data to support that.  

Without a doubt, one of the greatest pillars of any Airbnb business is tourism. If your Airbnb is 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 are the four main reasons to invest in this real estate market:

The Outdoors

The locals and tourists who come to Dallas grow to love the outdoors. Many green spaces and bountiful parks 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.

Downtown Dallas also offers a one-of-a-kind experience at the Dallas World Aquarium.

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, the Wildlife Amphitheater, the Otter Outpost, and the Endangered Tiger Habitat.

Local History and Museums

Dallas packs a punch for history lovers as well. 

The African American Museum houses a myriad of displays of African American historical, artistic, and cultural material. The museum is also home to a collection of artworks alongside a historical archive and library.

It’s 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. 

For aviation history lovers, 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. 

Shopping

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, the city’s oldest shopping center. Dallas offers an abundance of shopping stores and shops to meet your shopping needs.

Local Cuisine

Dallas is home to a vibrant local food scene. Barbecue restaurants, such as Pecan Lodge, run out of barbecues 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 tourist attractions and activities are proof that travelers flock to Dallas throughout the year, which means that it will see a good Airbnb occupancy rate.

Related: Where To Find the Best Comps Calculator

3 Best Areas for Airbnb in Dallas

One of the main advantages of Mashvisor as an investment tool is that it always relies on up-to-date and accurate information regarding market data. It helps the real estate investor have a clearer picture of the current condition of the market.

To help you kick off your search for the best areas for Airbnb in Dallas, here are the three most profitable locations from our May 2023 location report.

The following locations are ranked from highest to lowest cash on cash return.

1. Farmers Market District, TX

• Median Property Price: $544,111
• Average Price per Square Foot: $267
• Days on Market: 20
• Number of Airbnb Listings: 869
• Monthly Airbnb Rental Income: $2.580
• Airbnb Cash on Cash Return: 1.74%
• Airbnb Cap Rate: 1.77%
• Airbnb Daily Rate: $157
• Airbnb Occupancy Rate: 45%
• Walk Score: 94

First on the list is Famers Market District. From its name, it’s obvious that this is a dream come true for foodies who love to try something different. Every Saturday, a number of vendors will come and showcase their delicacies.

It’s also important to mention that this district is one of the safest places to live in Dallas.

2. Reunion District, TX

• Median Property Price: $850,799
• Average Price per Square Foot: $329
• Days on Market: 17
• Number of Airbnb Listings: 726
• Monthly Airbnb Rental Income: $3.268
• Airbnb Cash on Cash Return: 1.60%
• Airbnb Cap Rate: 1.63%
• Airbnb Daily Rate: $164
• Airbnb Occupancy Rate: 46%
• Walk Score: 50

Next on the list is Reunion District, or La Reunion (its original name), which is most famous for the Eddie Bernice Johnson Union Station and Reunion Tower. If you’re visiting the tower, take this chance to dine in one of its most famous restaurants, Five Sixty. 

3. Near East, TX

• Median Property Price: $508,224
• Average Price per Square Foot: $274
• Days on Market: 18
• Number of Airbnb Listings: 481
• Monthly Airbnb Rental Income: $2.267
• Airbnb Cash on Cash Return: 0.88%
• Airbnb Cap Rate: 0.89%
• Airbnb Daily Rate: $174
• Airbnb Occupancy Rate: 34%
• Walk Score: 43

Last on the list, we have the Near East. This place is filled with historical landmarks, beautiful nature, and one of the best taco shops. This neighborhood is an excellent choice for tourists who want a simple yet fun weekend getaway from all the noise and people.

Finding and calculating the potential profit for the dream Airbnb property can be a time-consuming and nerve-wracking process for the investor. Luckily, with the advancement and development of online tools, finding lucrative property has become a breeze.

Mashvisor’s Airbnb Rental Calculator is a must-have. Our tool will help you narrow your search and pick the most profitable investment property that fits your requirements and budget in less than 15 minutes.

You won’t even have to enter the Airbnb data yourself. It’s all provided for you.

To help you find the best vacation rental in Dallas, sign up for our 7-day free trial now.

3 Tips to Run a Successful Airbnb Business

Whether it’s Dallas or any other real estate market in the US, the key is to focus on progress over perfection. Running an Airbnb is a very demanding business in today’s fast-paced world.

That’s why it’s crucial to pay attention to every factor that can bring you bigger profits.

To ensure that you’re doing the best for your Airbnb, here are three crucial tips:

Tip #1: Take Amazing Photos

There’s no doubt about it. Top-rated vacation rentals have listings with professional-grade photographs showcasing every corner of the property. 

Considering that 90% of your future tenants will come across your Airbnb through online sources, it is very important to present it in the best possible light. 

So, if you have unique amenities in your Airbnb private room or purchased new decorations that will attract more attention, include them in your gallery.

Tip #2: Respond to Guest Queries Immediately

Next, you need to work fast if you want to boost your occupancy rate. 

Although it might be highly rated for location, your Airbnb is certainly not the only one on the market. So, whenever you see a question pop up in your inbox, it’s in your best interest to answer it ASAP and address their concerns. 

Responding promptly to questions and feedback is valued. We’re positive that a majority of guests agree with this statement.

Tip #3: Keep Your Airbnb Spotless

Running an Airbnb property means you’ll have tenants coming in and out of your property more frequently. Your Airbnb property’s highlight shouldn’t just be aesthetic. It should be rated for location cleanliness as well.

That’s where the cleaning fees come in. It is a fee that the host charges guests for cleaning after their stay. Generally, it is less than 10% of the total reservation cost.

Related: Mashvisor’s Airbnb API: Everything You Need To Know

Key Takeaways: Airbnb Dallas

We have successfully concluded the story of investing in Airbnb Dallas. Let’s once again go through the key takeaways and summarize our impressions.

Is Dallas good for Airbnb?

Yes. Investing in Airbnb Dallas offers a good profit potential for the real estate investor even with an Airbnb cash on cash rate below 2.0%. This real estate market is popular among investors for the following reasons: 

• growing population
• low living costs
• low crime rates

It offers people beautiful outdoors, irresistible shopping sprees, and some of the best Taco Tuesdays.

The three most profitable locations for investing in Dallas Airbnb are the Farmers Market District, Reunion District, and Near East. The final decision, though, depends on your personal preferences and how much you’re willing to put in financially.

If you’re looking to upgrade your Dallas investment property, you should make sure to equip it with professional photographs, respond immediately to guest queries, and keep your Airbnb spotless.

When it comes to pinpointing the best investment property, it’s highly recommended to have access to a helpful investment tool. That’s why Mashvisor is the best platform to have in your real estate investment journey. 

Book a demo with one of our Product Specialists to learn more about how our tools work. We’re eager to answer all your questions.