Great investing areas in Central Texas. (Based on my research)

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Hi Y'all! 

I thought it would be great to share some data I've collected about some of the best cities to invest in in Central Texas (in my opinion) 

Disclaimer (Sorry, I have to do it): The opinions I share about each city should not be your deciding factor in deciding where you should invest. This is an overview of each city and my opinion on it, which should not be your deciding factor!

Now that that's out of the way, let's do it!

City 1) Georgetown, TX.

a. Growing population. (Always a plus, right!) ;) 

b. Growing jobs.

c. A little on the expensive side. (But still great deals can be found)

d. Lot's of great attractions and charm! (Hiking trails, Georgetown Lake, etc.)

Georgetown is about to experience a HUGE job and population spike! Here's why. Big companies are starting to build big buildings in the city. Companies like, Apple (which is building an over $1 billion dollar campus), Academy, Hertz, Jason's Deli, etc. Which will all increase jobs and population by about 15,000! The median house price is $296,200 today.

City 2) Hutto, TX.

a. Growing population. (Hutto is growing naturally with a strong up trend in population)

b. Great steady job growth!

c. You can get almost the same rent as you could in Georgetown for a lower house price.

d. Great city with lot's of charm and some attractions. Great place to raise a family.

Hutto, Tx is a great little city with lots of charm and growth. People move there for the location and steady jobs, along with the housing prices. The median house price is $220,500 today.

City 3) Leander, TX. 

a. Great population growth. (Leander is pretty close to Georgetown, TX. Which means it will be affected by the new buildings and job growth)

b. Steady job growth.

c. Great place to raise a family! (Property prices are a little lower than Georgetown's.)

d. Will be affected by Georgetown's growth. 

Leander is a great place for families, with steady jobs and a growing population, it's a great place to own a single-family rental! Leander's home prices are pretty good for the most part, with a median house price of $221,100.

Conclusion: These are some of the strongest growing, healthy cities in Central Texas. With great economics and relatively good housing prices.

Remember, these cities may not fit your criteria. These cities seem good in my opinion, but you will have to dig deeper to be sure one of these cities fits your criteria. 

I hope you found this data helpful in your search for rental properties in Central Texas! 

Thanks Y'all!

Updated about 2 years ago

Quick update! Hutto is actually going to get a HUGE baseball stadium built by the national association of baseball. It's going to have over 7 baseball fields in doors, along with a hotel, restaurants, etc. It's going to bring a HECK of a lot of people to Hutto!

Great question @Alvin Sylvain

A lot of it is from both city and county websites, because they would be more accurate and give more information and details about the city. I also have used other data websites like Neighborhood Scout, Best Places, Data USA, Trulia.com, Zillow.com, City-Data.com, and many more over a course of many weeks. I have also talked to fellow investors who own rentals in a few of these cities. 

This was an overview of the cities I thought, based on my weeks of research, to be great, healthy cities for rentals. But, you will always have to do your own research, and come up with your own conclusion.

I'm sure there are other great cities in Texas that I haven't mentioned, so make sure you do your own research and find the best city that fits your criteria.

What is your investment strategy and how many investments have you purchased in these locations? Flips? Rentals? Has the ROI on your personal investments supported your online research?

Great question @Guy Gimenez

I'm currently not doing any flips or rentals. I'm working on wholesaling in Central Texas as my current strategy. Although, I have talked to many investors (rental investors) who have purchased properties in all these areas. They have seen ROI's of 10%, 13% and 16%. I was skeptical of these areas when I first looked into them, turned out that these areas are pretty profitable for rental investors. I have not talked to any flippers in this area. But I've seen a descent amount of run down homes being transformed into beautiful houses near the urban area.

When I have enough to buy my first rental, which I should this year, these three cities are going to be on my top list for areas to invest in. I would feel very comfortable owning a rental in these cities. And other investors who do have rentals in these cities love is, and the ROI!

So the answer to your question on whether my research supports the real returns, the answer is.. YES!

Caleb, I’m a little surprised you skipped over Round Rock. Is there a reason why?  I would think proximity to Dell and other Austin employers would be a big plus. 

Great question @Pete Harper

You are absolutely right! Round Rock is an awesome city! Like I said above, I wasn't going to mention all of the cities I thought were great and investment worthy, Round Rock being one of them. The three cities I mentioned were on the top on my list, Round Rock being the fourth on the list, along with a few others. 

There is not much wrong with Round Rock. I see a trend with people that are living in Texas. The migration started from Austin, moved down to Round Rock and Cedar Park. Now, after a few years, people are moving to Hutto, Georgetown, and soon Leander. Cedar Park is not even remotely on my list do to it's inflated prices! The cities I mentioned are the cities that are being invaded my families from Round Rock and Austin. 

Don't get me wrong, Round Rock and Austin are still awesome places for investments! And Round Rock is still very much alive!

Hi Caleb,

My one concern about Georgetown is the schools.  They are not nearly as good as those in Leander, Round Rock, Hutto or Cedar Park and for Georgetown feeling so far out in suburbia, it is a place for families that are looking at the school quality.  You being from Georgetown, do you know why the schools are so lacking?

Thanks,

David

@David Savoy - Austin area school ratings is one of my favorite subjects. Depending on which website or metric you consider, these school districts are constantly flip-flopping rankings, which is a great thing. At the end of the day, we're looking at shades of grey between the *districts*; they're all fairly equal, and all fairly high. When you break it down to an individual school level is where you start to see the nuance. One poorly performing elementary school in a district of 6 schools brings down the average for the entire district; so now a high performing high school gets dinged along with the lesser performing ones. In Georgetown for example (and this isn't the entire reason for your observation, but it is a part of it), there are three high schools, two 'regular' high schools with enrollment of 1500 and 1900, and one 'alternative' high school with enrollment of under 100. I would suggest you consider which school in particular has lower marks and then, don't consider homes zoned for it. Or look around and see if it's an opportunity. Are the homes in that area being bought and updated? Are better educated and move invested parents moving to the area? Buy that house cheap and flip it or lease it while you watch the school rating improve year over year.


I have investors from Singapore who will only purchase in Leander because of it's school ratings, and friends living there who are moving rather than send their kids to one particular school. In Hutto, being zoned to one elementary school is considered the same as winning the lottery and the other is considered 'meh'.

As an investor, consider your clientele. Are you selling or leasing to Apple or Dell execs who want to be 'out of town'? They're buying $650k+ homes and very much care about where their kids are in school. So much so, that they may be looking at private schools and the school zoning counts for nil. Are you selling or leasing to engineers or middle management? They're buying $300k+ homes and also care about the school; so look at the specific schools the property you're considering is zoned for. Are you selling or leasing to medical staff, retail managers, tradesmen, etc? They're buying and leasing at the $250k and under mark, and are *usually* more concerned that its easy to get their kids to school. So look for proximity in that case.

Just my soapbox rant on school ratings.

Great Thread, now let me get on my soapbox.  If you are now or want to be a real estate investor, the absolute first thing you need to decide is what is your investment goal and the Why that is connected to it!    That will guide you to either becoming a flipper or long term buy and hold.  

Let me focus you a little more.  My real estate investment goal is to buy and hold long term with positive cash flow day one! My WHY is because I want to secure my retirement with predictable and sustainable income to allow me to live a HIGH STANDARD of Living while being financially independent.  Flipping properties involve higher risk and is dependent on the real estate profits to continue to grow year over year.  Buy and Hold investors could care less about the direction of the real estate, in fact, we would rather it go sideways or decline.  Prices of real estate fluctuate up and down but low-end rents (950-1200) are steady in any market good or bad in the Austin MSA.  Know your market, know your product, and know your risk.

Because I am a buy and hold, positive cash flow, minimal risk investor, there are some things I care about and some I absolutely don't.  But I know my market!!! And I take advantage of the positives of the market.  For example, I DON"T CARE ABOUT THE SCHOOL QUALITY in the Austin MSA.  Why you ask?  Because my market CARES LESS ABOUT SCHOOLS!  Because I CARE about POSITIVE CASH Flow it leads me to buy multi-family (duplexes primarily), less hassle than 4 plex and up.  My rents range from 950-1250 per unit.  A lot of my renters are millennials who don't have kids; or young families who are just trying to survive day to day and just want a safe, clean, nice place to live.  I like 2 bedroom units over 3 bedrooms.  Easier to rent, per sq ft better price, and I have fewer people living in my units!  Turnover is so much easier!  

Also those who say MF cash flows better than SFH are correct. But they are wrong when they say they don't appreciate as fast compared to SFH. In very slow demand areas you may be correct. I began buying duplexes in Austin in 2005. They were a dime a dozen and sat on the market months and months. But the low income sector has been ignored since 2008-2010 recession and duplexes are the HOTTEST COMMODITY IN THE AUSTIN MSA. When a duplex comes on the market it is a frenzy to get your offers in. I will go on record today to say the HOTTEST properties from New Braunsfels to Waco along Hwy 35 are duplexes.

I have properties in most of the cities mentioned in this thread.  2 Duplexs in Round Rock, 1 Duplex in Georgetown, 1 Duplex in Taylor, 2 Duplexes in East Austin and 1 duplex in North Austin.  I'm sorry to brag but NO ONE knows duplexes in the AUSTIN MSA better than me.  I can walk the talk.  I have been a pure real estate investor since 2003 all multi family, all duplexs execpt one 4 plex.  I have been a buyer since 2003 and have yet to sell one property.  WHY?  Because it doesn't fit my goal or my WHY.  I want Predictable, Sustainable Income to satisfy a high standard of living till the day I die.  Positive Cash Flowing Multi-Family does this quite well.  If your betting on the race, take the tortoise, the hare burns out, has great burst but takes many breaks and loses the race.  

I bought one duplex in East Austin 6 years ago for 70k and I could have flipped it the next day for 120k.  That would make a  good Christmas Party brag, eh.  But instead, I put 10k in it and have averaged about 16k profit each year for 6 years and the property is now worth 350k.  You tell me, what was the better play, buy and hold or flipping.  Yes, I get you; if you could find those deals every day for 10 years straight then yes that's the better play, but my friends those deals are few and far between.  I never go hungry around my house, plenty of food, come on by.   

I will close with this, I am not a realtor, loan officer, or a lender.   I am a real estate investor who loves talking about real estate with no conflicts of interest that involve selling anything!  Good luck my friends, Cheers!

I am also a buy and hold investor, and also in central Texas. I agree with much of what you say, but totally disagree about schools. Buying in good school districts is essential. Rents are higher in good districts compared to bad. The quality of tenants, speed of re-rental, length of tenant stay and tenant care of the home are all higher in good school districts. Many of my tenants move in when their kids are small and stay till they graduate high school. That is primarily because of the excellent school districts and the good relationships I establish with them. 

@Bill Crider , I get what you are saying, but I think you didn't give any thought to my "Know your market, know your product".  I have a property in Georgetown where you are from, but I'm going to guess MY MARKET, and MY PRODUCT is different from yours.  So for you and your market and product, schools may be a factor in where you buy.

You see MY MARKET is either the young professional (no kids or one under 5yrs old), the struggling single parent or young couple with no kids, or no more than 2 that are usually pre-school age, or the more mature but scraping to get by just looking for affordable rent. MY PRODUCT is probably different as well.  It corresponds to MY MARKET.  It is a duplex, approximately 1000 sq ft each side, only TWO Bedrooms, may or may not have a 1 car garage, 1 or 2 baths and a small yard.  Located in predominantly a low-income renters neighborhood.   

The only consideration concerning schools for my market would be proximity to school for the few that have children that may attend school.  It is a proximity concern, not a quality concern.  These people have more important issues to tackle than school quality.  They have cash flow issues, job issues, relationship issues, car running issues, keeping utilities on issues, and paying rent issues.  All or most all of my tenants are paycheck to paycheck, each and every month.  They are still looking for clean, safe housing as a priority over school quality for which most are not directly affected.  

On the other hand, if I am flipping and my market is small families who want to own then at the top of my list would be school quality and location as that is what I would perceive to be important to a couple buying real estate.   

There are people, maybe even you, who are buy and hold, but their product is SFH and their market is family with kids. That market is probably better off financially and they have more flexibility and choices as to where to live. To each their own.

I'm a cash flow guy, who buys duplexes, fixes them up and makes them the best properties on the block. I still rent to my target market and I get the best of that market. My cash flow is probably better and more profitable than those with SFH, but my tenants probably require more hands-on management.

For my 16 years managing my 25 properties, I get little to no inquires about school quality.  Know your market, know your product, know your risk.  Cheers.

'

@Caleb L. I agree with you on those markets. I am not yet an investor, but I do aspire to become one in the next few months and I am finding the rents vs prices just don’t make sense for me. I drove through Taylor the other day and I liked the redevelopment I saw in the downtown area. Do you have any opinions on Taylor?