Austin Tx- Good time to invest?

Question

Hi, I just reserved a condo unit in pre-sale for a giant high rise coming soon to downtown austin. Is this a wise investment if I plan on living in it for 5 years and then sell?

Adam Anderson · Answer

Is this the Austonian?

N/A N/A · Answer

I would take a hard look at the market saturation before spending money on a downtown condo

Tom McGiveron · Answer

cali, can you explain your deal a little more?  thanks.

Account Closed · Answer

Maybe.

It is really hard to say. You are reserving something now that you will try to buy later. I say "try to buy" as you do not know what the market will be like later or your financial position.

If you live there for 5 years maybe the market will rise or maybe you will be caught out in a downturn. Longer term holds normally reduces the risk so 5 years is reasonable. Granted you could get married, be relocated for work, you could get divorced, and any number of things can go wrong. Most of the time little does and people end up staying longer than expected. I am just trying to say that you are making a forward bet based on a lot of assumptions, many which are completely out of your control.

I have purchased a number of off-plan (pre-constructions) properties. All were condos or similar where 1 purchased 1 or more units in a larger development. I completed my purchase on one 10 months late (builder was delayed) and 2-3 months before 9/11. As the property was in London and close to the City (think London's version of Wall Street) the timing was rather mixed. It all worked out in the end. You just can not control all the variables. Note that this deal was my most profitable ever but it was luck more than planning.

If the location is really good, if the unit you are buying is a prime unit, if you are well positioned to complete on you side of the deal and if the developer is solid then make a decision and move forward.

One one deal the subcontractor who was building the steel skeleton went bankrupt so the project was delayed for about a year. On another project the developer was building out 8 buildings (2 mixed use with residential and the other 5 all office or parking). They ended up delivering late and the who project suffered a bit.

In two deals we sold later when a buyer approached us without the property being on the market. In neither case were we looking to sell. The offers were too good to turn down so we did the deal. In both cases the unit we were selling was the biggest, the best located or something that made drove demand such that a buyer would approach the owner just in case a deal could be done. In both cases the market was not that strong yet we sold out at a premium because of the unit being in demand even in a slow market.

Buying off-plan is one way to buy but it comes with its own special considerations.

John Corey