Austin or Scottsdale for 1st investment property?

Question

Hey Everyone!

My husband and I cannot decide between Austin and Scottsdale, AZ. Area for our first investment property. Does anyone have experience with investments in both places that can help me with pros and cons for both areas?

Thank you

Alexis

Alexis Davila · Answer

@Dan Burstain

Thank you. We were definitely leaning more towards Austin!

Alexis Davila · Answer

@Ryan Kelly

Thank you for the info. Would you be able to tell me if there are any up-and-coming areas just outside of Austin?

Alexis Davila · Answer

@Jaron Walling

Thank you.

Dan Burstain · Answer

Hi Alexis,

IMO If you look at the volatility in median sales price between the two cities you will see Austin is a much safer bet. If you look at the huge job base Austin has with the government and university to support any downturn in the economy (as it has done for 40 years now with the biggest drop being 2.9%) Austin is the better bet. If you look at the future job growth between the two cities, Austin is the better bet. Take a look at the major employers. Take a look at companies putting billions of dollars each into the city in the next 5 years (Austin has Apple, Tesla, Amazon, Oracle, Samsung, etc). I think it is a no-brainer, IMO.

Jordan Moorhead · Answer

@Alexis Davila what does the data say and what do the properties you're analyzing look like?

Jaron Walling · Answer

@Alexis Davila It depends on how much you want to invest. Look at the average cost for property in both cities and hyper narrow down to the neighborhood and street. Find out what other investors paid for distressed or turn-key rentals. You'll probably find Austin to be a bit cheaper. I always thought Scottsdale was crazy expensive with all wealthy hired folks living there and golfing everyday, but I'm just an outsider from the mid west :-)

Austin is exploding and has been for a while. It's not going to slow anytime soon. The tech industry has embraced it and numerous companies are relocating to Texas. That's my pick.

Ryan Kelly · Answer

@Alexis Davila Long term, I think Austin is a great play and I invest here myself. At the current moment, Austin is experiencing record low-inventory as extreme buyer demand has overwhelmed the market. You will need a lot of cash down to make a SFH property cash flow (40%+) and expect high competition (30-70+ offers). Small multi-family, rent by the room, and AirBnB (outside of Austin) can offer some higher yields, but again, beating out the competition is the name of the game currently.

Austin or Scottsdale for 1st investment property?

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