• by The VRET Team

Real Estate Opportunities in Tulsa, Oklahoma

It was once the dividing line between the Creek and Cherokee nations. During the 1880s, it became an important stop for the St. Louis and San Francisco Railroads. The discovery of oil ushered in a rapid period of growth and, by 1912, it was considered “the oil capital of the world.”

Which city are we talking about?

If you guessed Tulsa, Oklahoma, you’re correct. A humble town that started with a few cattle ranches has now grown into the second-largest city in Oklahoma, with over $1 miilion residents in the greater metro area they are proud to call it “home.”

Of course, you didn’t come here for a history lesson. You’re here because you want to learn more about investment and real estate opportunities — and you’re in the right place.

Whether you’ve been researching Tulsa for a while or you’re just now considering it as an investment opportunity, there’s a lot to learn. Keep reading below as we discuss why Tulsa offers some of the best real estate opportunities in the nation.

Why Choose Tulsa, Oklahoma?

Its fascinating history is just one small part of what makes Tulsa an investor’s dream. Here are some reasons why Tulsa ranks as the fourth-hottest housing market in the US.

Affordable Cost of Living

While other cities make headlines about soaring costs, Tulsa (and Oklahoma as a whole) has managed to maintain an affordable cost of living. Overall, it’s nearly 17% below the US national average!

Oklahomans, on average, pay 24% less in taxes than their neighbors in other states. And while the average rental price for an apartment has passed $1,200 nationally, renters can find great properties in Tulsa for under $900.

It’s little wonder that the area has swelled to more than 1 million residents in the greater Tulsa metropolitan area. Residents can expect to spend just 23-29% of their income on rent. In fact, in 2019 Tulsa ranked #1 on the list of the country’s most affordable cities for renters.

Booming Job Market

Here’s another reason why your Tulsa investment property will never sit empty — the local economy is thriving. While the nation’s average unemployment rate sits just under 4%, the unemployment rate in Tulsa is 1.9%.

There are plenty of jobs to be had with energy industry leaders like QuikTrip, ONE Gas, and Helmerich & Payne. Meanwhile, companies like AAON, AT&T, Baker Hughes, BlueCross BlueShield, and the OSU Medical Center each boast more than 1,000 employees.

Tulsa is also home to two of the nation’s largest oil refineries and the world’s largest airplane maintenance center. The multi-billion dollar Google Media Center sits just outside of town. Tulsa appears on the list of North America’s “up and coming” tech talent hubs.

And, just in case you need more convincing, Tulsa is also the headquarters for three Fortune 500 companies.

Ideal for Students & Retirees

Tulsa draws students from around the country (and the world) with its offerings for higher education. The big hitters are the University of Tulsa, Oral Roberts University, and the University of Oklahoma’s Tulsa campus. 

Bonus: Tulsa is incredibly easy to get around, with an average commute of just 18 minutes. There’s also an extensive network of paths and trails for those who prefer to walk or bike around town.

Meanwhile, retirees can enjoy many perks of making the move to Tulsa. The tax benefits are immense, with a full exemption for Social Security retirement benefits as well as deductions toward a 401(k) or pension plan. There’s also a strong healthcare system and ample opportunities for outdoor recreation and entertainment.

Big-City Convenience Surrounded by Nature

It’s hard to find a place that ticks all the boxes, but Tulsa is one of them. It boasts every modern convenience you could want in a big city, from arts and entertainment to cultural festivals and a lively nightlife scene. 

At the same time, you don’t have to travel far to find natural beauty. The Arkansas River offers ample opportunities for watersports, while the Gathering Place (a 100-acre riverfront park) was recently voted the best city park in America. Families with kids (and anyone young at heart) will enjoy the close proximity to the city’s zoo, aquarium, and discovery museum.

Nearby, Tulsa residents can enjoy the Oxley Nature Center, the Lynn Lane Reservoir, and the Turkey Mountain Urban Wilderness Area. Just a short drive away, there are the Ouachita Mountains and the beautiful lake district of northeastern Oklahoma and southwestern Missouri.

Tulsa Real Estate Market 2022

We could go on and on about the benefits of living in Tulsa, but now let’s shift our discussion to the topic at hand: investing in Tulsa real estate. What should you know about the current real estate market in Tulsa, Oklahoma?

In a word, it’s hot.

Between 2018 and 2020, Tulsa’s median listing price grew by 33%, from $219,833 to $292,300. The pandemic accelerated this trend further as people switched to remote work and chose to leave higher-priced cities.

Although we’re no longer enjoying those rock-bottom interest rates like at the beginning of the pandemic, Tulsa still ranks among the top five US cities to purchase a home. The median sales price has gone up 11.33% year-over-year, with most homes in Tulsa selling for the full asking price.

With more demand than inventory, the average time on the market is a blindingly fast eight days.

Of Tulsa’s 121 neighborhoods, Maple Ridge Historic District is by far the most expensive, with a median list price of $550,000. The city’s most affordable neighborhood to buy property is Charles Page, where the median list price is $62,000. Other areas including Downtown, Hillcrest, North End, and Basque Block are all poised for future growth.

What About the Renter’s Market?

As an investor, one of your biggest concerns is your income potential from renting out your property. You’ll be happy to learn that, despite the affordable cost of buying a home in the area, 48% of Tulsa residents are renters.

Here are some key stats to consider:

• The average rent in Tulsa has increased by 15% year-over-year
• During the past three years, the price for a 3-bedroom rental in Tulsa has grown 30%
• 73% of the housing units in Tulsa are single-family homes
• The most affordable neighborhoods for renters include Suburban Acres, Sequoyah, and Carriage Trail, where average rents are about $735/month
• The most expensive neighborhoods in Tulsa are Stone Creek Farms, Maple Heights, and Sunrise Terrace, where average rents range from $1,650 to $2,000/month

Another reason for the booming rental market is the city’s widely-applauded Tulsa Remote program, which offers remote workers $10,000 cash to move to Tulsa. To say there are incredible real estate opportunities in Tulsa is the understatement of the year!

The national real estate market has had its ups and downs over the past five years, yet Tulsa remains extremely affordable. With so much growth in the area, now is the ideal time to get started in real estate investing. 

The Best Real Estate Opportunities in Tulsa

As a new investor, you want to avoid common mistakes and get it right the first time. After all, the market will always be there, but you only have so much money at your disposal.

Here are three common paths investors take when beginning their real estate journey.

New Construction

New home construction in Tulsa soared during 2020, with growth rates at an all-time high of 22.8%. That trend hasn’t slowed down yet, with new single-family homes, duplexes, and quad-plexes sprouting up all over the metropolitan area.

Existing Properties

Some of the best investment success stories begin with existing properties. It’s often possible to get an older property, fix it up, and sell it for profit or hold onto it as a rental property.

The city of Tulsa also has 19 different Opportunity Zones for real estate. These zones allow investors to reduce their tax payments on gains while investing in projects within certain geographical areas (generally low-income areas).

Commercial Real Estate

Homes and apartments aren’t the only options for real estate opportunities. Some investors choose the commercial real estate route with retail space, office space, hotels, restaurants, or healthcare facilities.

Tulsa Real Estate Investment Strategies

By now it’s clear that there’s no “one size fits all” real estate opportunity that will work for everyone. There are a number of different paths you might take that lead to both active and passive income.

With this overview of Oklahoma real estate in mind, let’s briefly consider the four main strategies for investors in Tulsa.

1. Buy & Hold

As the name suggests, a “Buy & Hold” investment is when an investor buys a building and keeps it for a long time.

During that time, the investor uses the property to generate rental cash flow and grow the owner’s earnings. Down the road, when the market value of the property has increased, the investor has the option of selling that asset if it’s to their benefit.

You’ll need to consider a variety of factors with this type of investment, including the property appreciation rate and price to rent ratio. When done correctly, this is one of the best ways to build wealth with real estate.

2. Long-Term Rentals

Closely related to the first strategy is the long-term rental path, or BRRRR. This stands for:

• Buying a property
• Renovating it
• Renting it
• Refinancing it
• Repeating the process

BRRRR is a proven system for continuous expansion. The key to this strategy is being able to get a “cash-out” refinance.

You’ll add to the value of the property beyond the costs of buying and fixing it up. The property is then refinanced and you’ll earn the difference, or equity, in cash. You’ll place this capital into the next asset and repeat the process, building your wealth steadily over time.

3. Short-Term Rentals

The short-term rental market (stays of less than four weeks) is booming.

Airbnb hosts have earned an impressive $70 billion since the platform launched in 2007. Other major players include VRBO, HomeAway, and Vacasa. There’s also the need for short-term corporate housing, especially in industry-rich cities like Tulsa.

Rather than investing in properties for long-term rentals, you can charge a higher nightly or weekly rate for holidaymakers or business travelers.

4. Fix & Flip

The fix and flip approach involves buying a property that needs improvements or restoration. The investor adds value by making upgrades to the property and then selling it for a higher market worth.

This approach can yield great results, but it’s not without risk. You need to be able to accurately assess how much you’ll spend on the restoration to ensure you can sell the property for a profit. You also need to be capable of buying the home for below-market worth.

In addition, you need to understand the local real estate market where the property is situated. One of the biggest factors is the average number of Days On Market (DOM) for other houses in the community. To “flip” real estate for a profit, you have to be able to liquidate the revamped property before you need to shell out capital to maintain it.

Which real estate opportunity is right for you? You can learn more about these different paths and other options with our free resources for investors.

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Get Started in Tulsa Real Estate Investing Today

As we’ve discussed, real estate opportunities in Tulsa are among the best in the nation. With a low cost of living and terrific job opportunities, it’s no wonder so many people are flocking to the area.

What does this mean for you, the aspiring real estate investor? If you’ve been searching for the right place to begin your investment journey, Tulsa might be the perfect location.

Understandably, you’ll need some professional guidance along the way. Our team is standing by to help you through every step of the process, from creating a custom plan to locating the best investment properties for you.

Contact us today to discuss your investment goals and take that all-important first step towards financial freedom..