Investing Real Estate in Texas!

3 Replies

Hello! I was wondering what you thought of buying single family homes in Texas (specifically Austin), the pros and cons. I live in Arizona but I see a good opportunity for real estate in Texas. Also some tips on buying properties out of state. I personally feel like your much more likely to be successful if you don't limit your market to your hometown.

I was also wondering what some good sources are for finding out vacancy rates. Also how you personally research a good area for investment rental properties without visiting and what you look for when you visit the area for a week. If these questions have been shared before, please reference the discussion.

Thank you!

Hey Ryan! I agree with you about tapping into multiple real estate markets. It's a great way to expand your portfolio. The pros and cons of buying single family homes here are relative to your financial circumstances and strategy (i.e. cash flow, appreciation, etc). 

Based on the properties I've come across, multi-family (duplex, quadplex) dwellings provide decent rental returns. But you should be open to doing some renovations since a good amount of our properties are dated. Surrounding cities like Round Rock, Cedar Park, Georgetown, or Kyle yield more turnkey rentals.

As for a good resource to research vacancy rates and areas, the multiple listing service (MLS) is really useful. Everyone has his/her own take on the market so obviously get in touch with as many people (realtors, wholesalers, fellow investors) as you can. Hope this helps!

Originally posted by @Ryan Garcia :

Hello! I was wondering what you thought of buying single family homes in Texas (specifically Austin), the pros and cons. I live in Arizona but I see a good opportunity for real estate in Texas. Also some tips on buying properties out of state. I personally feel like your much more likely to be successful if you don't limit your market to your hometown.

I was also wondering what some good sources are for finding out vacancy rates. Also how you personally research a good area for investment rental properties without visiting and what you look for when you visit the area for a week. If these questions have been shared before, please reference the discussion.

Thank you!

 When buying out of state one should always do the following.

  • Get a 3rd party inspection.
  • Get a 3rd party appraisal. This is another reason to buy rental property using bank financing. Outside of being able leverage your money 4x faster the bank will require an appraisal. Bank doesn't want you blowing their money on a bad investment.
  • Hire a property manager. If you are a do it yourself er, that's cool. Buy a property close to home & manage the heck out of it. If you are buying out of state prepare to take a step back & become passive. Trying to manage it yourself from a far never works out.

I'm not 100% sure in Austin, but in DFW, the market value of residential real estate  has appreciated 5-8% annually each of the last 3 years, with many areas appreciating 30% in that time.  Property values compared to other states is still low.   There are many companies moving to our area, primarily due to lower cost of living including home prices.  Population is growing at a fast pace due to companies moving to the area and an influx of people from California (and other countries :-)) and because there is no state income tax along with a lot of other reasons.

  Rental values are great.    You can find good deals (instant equity) if you especially if you are willing to do some cosmetic updates.  

Like everywhere, be sure you know the area, or your agent does.   Average price/sf in one area could be $120/sf and a home 2 miles away might be $90.00/sf. That doesn't mean it's definitely a deal.   You need someone to run good comps for you.

Have an idea of what price range or rental range you are comfortable with.  It will save a lot of time cherry picking form a specified range.   

Even if you are a cash buyer, require the house to appraise in the contract.  Have a home inspection.    

It's useful if an agent will do a video walk through and share it with you.   Good luck.

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