Relocation & Investing in Austin, TX

16 Replies

Hi everyone.

My husband and I are wrapping up our latest buy & hold rehab in Los Angeles, CA. Our projected completion date is August 2021 and we're looking to move to Austin at the end of next year. We are looking into East Austin to purchase a house - preferably a duplex (or larger) that we can house hack or a home w/ an ADU built in it, that we can also house-hack. Wanted to connect w/ Austin investors and get a head start in our network there.

We visited Austin in September and were attracted to the vibe of the city, loved the mature trees and the river. As for investment: we're considering buy & hold around the city: east Austin, although we don't mind going anywhere that the deal makes sense (North Austin, South Austin (McKinney, South Congress, etc). We're even considering going as far as San Antonio to invest since it will be close to our "home base" in East Austin. 

So my question is, is there a strong rental market all over Austin? From our research, all over the city there's $1M houses right next to $350k houses. And there's also new construction North of Austin (our friends were looking to buy new development houses in Pflugerville).

Any leads greatly appreciated & connections too!

I'm a lender here in Texas and I can tell you that a lot of my investors are buying properties in North Austin near the new Austin FC Stadium. You really can't go wrong anywhere in Austin, as the housing market is getting so expensive, there really is a rental market anywhere. You're likely to be happier with your home and investment in/around Austin than you would be going all the way out to San Antonio though.

Best of luck!

@Wei Cho welcome almost to Austin! It really is a great city with an awesome vibe and it also is a great place for investors. Here’s a couple of things I would point out:

1. I think you are thinking in the right direction concerning house hacking. Austin has become a really expensive market and it is really hard to find properties that cash flow. Some measure of house hacking is going to help you get the right type of financing. Not sure if you listen to episode 392 with Todd Baldwin, but I would check it out. It’s a very intriguing strategy you might consider.

2. Not sure what your appetite for flipping is, but there is a lot of money to be made in the fix & flips here. What was once the suburbs of Austin has now become the city center. You have a lot of aging homes that need repair. This is also why you see such a disparity in price right next door to each other. Unfortunately, with flipping comes the City of Austin and it can be quite cumbersome to navigate.

I would love to connect with you guys when you move to the area! Good luck wrapping up the project in LA!

@Wei Cho Rental demand is high in Austin and so is investor competition, so just make sure to set specific goals and you’ll do fine. The areas with the large price disparities you are seeing are mostly on the east side, which only started seeing big money move in over the past 15 years. You can have small dilapidated shacks next to infill new construction. The more expensive and mature side of town is the west side of Austin which has the beautiful hills and top-rated schools.

There is a lot of variety in the market and each suburb is unique. Happy to chat about Austin before you make me the trip!

@Trey Jordan - Thank you!! I will check out North Austin. We're very excited about the move.

@Justin Hroch - thank you for all the good information regarding Austin rentals & fix & flips. Our strategy in LA has been adding more units or an ADU where zoning allows so we're familiar with processing plans w/ the city. If the city of Austin is cumbersome, then I'm going to start looking into zoning laws there! Thanks for the tip. Ohhh we'd love to try our hand at flipping. It seems more manageable than in Los Angeles

@Ryan Kelly - thanks for the information! We'll def. reach out to as many investors/agents/lenders as we can before we move. We LOVE the west side of Austin, that's really what attracted us. So it's def a goal to move there some day. But we'll start small and then move up.

@Danny Webber - thanks! Yes, definitely something for everyone. For now we're looking at cash flow (by adding another unit or ADU) and appreciation. It's the strategy we use in Los Angeles. I'm going to start researching Austin zoning laws

@Wei Cho To be clear, inventory is at record lows in Austin for both SFH and multi-family. The demand is very high. Will that change? Time will tell, but I would plan for inventory to be tight for the foreseeable future in the market.

@Wei Cho the rental market in Austin is pretty solid overall.  In general, the further out you go the smaller your potential renter pool becomes.  Certain areas and investment classes also tend to have higher vacancy rates as well, these tend to be niche or isolated pockets.  

North Austin has seen the majority of the city's growth over the last several years so it is hard to go wrong there.  East Austin is in development and you hit the nail on the head, it can be a tear down house next door to a brand new $1M build.  Not wrong wither way, just a different investment strategy for each. 

Welcome (early) to Austin! It's a great place. The city can be onerous to work with, honestly, if you're doing your own development (teardowns or build-your-own ADU). Here is some info on ADUs from the city:

You'll also want to look at the location of trees before you buy something, if you're planning to add your own ADU... can't take down larger trees in Austin!

As someone who relocated to Austin from Los Angeles let me start by saying you are going to love it here!   Austin is a great market for investing and depending on how much you are wanting to invest will really determine what area best suits you.  Best of Luck!

@Bryan Noth - thanks for the insight into North Austin vs East Austin. We'll be out there visiting before we make the permanent move to check out the neighborhoods. When you say North Austin, does that include Round Rock, Pfulgerville, etc? Or is that too north. My friends were checking out the new developments there to potentially buy but they ultimately decided on Dallas. 

@Rick Reeder - thanks for the website and the welcome! Will def check it out. Actually the amount of mature trees were a huge selling point for us. We loved the trees and wouldn't mind leaving them and designing around them. 

@Marlen Weber - thank you! we're excited about the move

@Alisha Macdonald - nice, that's awesome! Thank you. How long ago did you make the move? We were there for 3 days (as part of our Texas tour w/ friends who are going to move to Texas) and loved Austin the most.

@Wei Cho Correct.  It is difficult to draw n exact line of separation of where North Austin begins, but the growth along that entire area of North Austin / Round Rock / Cedar Park has been incredible.  Pflugerville is seeing some strong growth as well.