Texas is known for its independent spirit. Its history is steeped in triumph over struggle, and the state still draws in strong willed people looking to create their own opportunity. Does it really surprise anyone who lives here that, in the midst of a national recession, Texas has been consistently identified as one of the states leading the rest of the nation out of the current downturn?

Regardless of the current economic struggles during the recent recession, the overall business climate in Texas remains in better shape than other parts of the country. The state’s unemployment level has remained at or below 5 percent since July 2006, according to the U.S. Department of Housing and Urban Development’s (HUD) Comprehensive Housing Market Analysis. Many businesses continue to expand or relocate to the state, San Antonio’s military bases are becoming the top medical training installations for the entire nation, and many local real estate markets have held their values.

“Overall, our market has grown in the last six years,” says Florence Terrell, chairman of the Board of the San Antonio Board of REALTORS®. , or SABOR (www.sabor.com) “We’ve seen fluctuations in the number of sales, but the average home sale price has steadily increased while population continues to grow in San Antonio. We even ranked fifth for cities with the largest population growth from 2007 to 2008, according to the U.S. Census Bureau,” added Terrell.

With this increase in population, the number of households in the San Antonio Housing Market Area (HMA) has increased by 11,200, or 1.7 percent a year since 2000, according to HUD. The combination of lower unemployment, an increase in households, low interest rates, reasonable prices, and availability of property continues to make San Antonio a strong real estate market.

Rental Properties

“Now is an exceptional time to buy investment or rental property,” said Adona Lowery, vice president of Exit Slater Realtors. “Other parts of the country may be in distress, but the real estate climate in our city is offering opportunities to find great deals for anyone looking to purchase a home as a residence, investment or rental property.”

When looking to invest, it is critical to have a clear end goal in mind for the property. If purchasing property as an investment, plan to hold it for three to five years to recoup the maximum equity of the property.

Rental properties in the area, especially with the coming wave of military medical personnel soon moving here from around the country, can be an excellent investment for generating rental income. Rental properties pose a host of different consideration when deciding on the right properties to purchase for leasing.

“Location is the number one factor for deciding on where to purchase any property,” Lowery says. “But if you want your rental property to have an edge over other properties on the market and for it to bear the most rental income, do your research. Look for a good school district, a neighborhood with an active homeowner’s association, and desirable community amenities such as pools or tennis courts that are going to be attractive to renters or for resale,” adds Lowery.

There are several areas in San Antonio that are booming with opportunities in rental and investment properties. Lowery says that one area holding its value in the changing market and sustaining a positive rental rate is North Central San Antonio, including Stone Oak, Encino Park and Lookout Canyon, where there remains numerous properties perfect for rental properties, as these areas remain consistently full with tenants.

According to Terrell, Northeast San Antonio is also a prime location to consider for rental properties. “With the expansion planned at Fort Sam Houston and the increase in military personnel anticipated, the Northwest area offers some great opportunities for new and pre-owned homes,” says Terrell.

At the edge of Alamo Heights and the San Antonio Country Club, a different kind of investment opportunity now rises above the San Antonio skyline in dramatic fashion. The Broadway San Antonio, a luxury high-rise scheduled for opening in February 2010 at the corner of Hildebrand and Broadway, offers a lifestyle unlike any other found in the city.

“With luxury high-rises, you can have the ultimate in lock-and-leave living.” says Mike Reddell, project manager of The Broadway and president of Ironwood Marketing Group in Dallas. “You know your investment will be taken care of; you don’t have to stress about any of the things that are time wasters in other types of dwellings. The next generation high-rise provides a staff to take care of everything.”

Condominiums are an attractive investment option because they are low maintenance, provide a number of conveniences and usually have access to transportation and/or near major arteries of the city.

“It is a good time to invest in a luxury high-rise in San Antonio because the market is in its infancy, and there is little supply and great demand.” says Reddell. “People are discovering that there is a better way to live. In cities across the country, the trend is to move from urban sprawl to urban infill. High-rise living accommodates a wide range of lifestyles contained in a micro-community. And San Antonio is not an exception to this trend.”

Regardless of what type of property you choose to invest in, there are certain factors to consider before signing on the dotted line. Before even considering investment properties, decide if you want to invest alone or as part of an investment group. Investment groups are useful to reduce individual exposure and risk, but there is also less control over the decision making process.

“I have worked with groups who bought properties without researching the locations and some of the properties ended up in foreclosure,” Lowery recounts. “But, I have also worked with others who have several properties with very successful rental rates. You really have to research who you are investing with and have an opinion on the direction of the investment.”

Lowery suggests involving a property manager or property management group with experience and professional credentials to oversee your rental property. The National Association of Residential Property Managers, or NARPM (http://www.narpm.org/), is the largest of these groups. Be sure to talk with prospective property managers before hand, ask them what they know about the area and let them do a market analysis for rentals in that area – consider them as your primary resource.

“Working with a property manager is important because the laws change quickly in real estate,” says Lowery. “Property managers take on the day-to-day responsibilities of a rental unit. They handle the paper work, collect rents, coordinate move-ins and move-outs, handle the screening of potential tenants and other issues that arise.”

When you start looking at specific properties, whether it be as a primary residence, a rental unit or an investment to sell, make sure you have a clear plan established for your future goals. Moreover, always seek the advice of a tax professional and real estate attorneys to understand the rules, limitations and tax implications of investment properties.

“Consider how you will use the property,” says Terrell. “Will you buy the property and occupy it, make some improvements and then sell it? Will you get a fixer-upper to try to flip quickly and get out? Will you buy the property and use it as a rental property? Is the property a write off?”

“For rental property, take note of the age of the property. The newer the house, the less the repairs and maintenance you will have to worry about,” Lowery said. “An older property needs more money. Many of the newer homes come with builder warranties that take care of any maintenance needs for one to two years. There are also several home warranties on the market to consider if you do purchase an older home,” concludes Terrell.

There are many details to examine with every real estate transaction. Just like other investments, make sure you research your options.