Austin, TX · Member since 2014 · 15 posts · 4 votes
I have a general question for all of the investors out there, what do you do with your personal residence?
Did you establish your primary residence before or after you started REI? Do you rent or own?
I'm interested in a general consensus from the forum. I'm currently in the market for a primary residence (in Austin, TX) and I'm going in with the mentality of buying a fixer upper, executing a rehab, then potentially rent/sell in 1-2 years (potentially using a FHA 203k, but can do conventional financing as well). Deals are pretty hard to come by these days in the more desirable/up and coming area's of town, so it's making this process pretty difficult. Deals can be had on the outskirts and less desirable area's, but i'm not looking to move that far out. I'm currently renting, and am on a month-month lease which I can terminate when it is convenient for me.
Any thoughts or comments are appreciated on your personal situation or general advice for the Austin area.
Dallas, TX · Member since 2016 · 3 posts · 2 votes
9y
I basically did what you're considering earlier this year. I wasn't in a rush to buy a home at all, it was more of a "Ok, I'm paying $2700 in rent to live downtown, I might as well treat this like an investment." I went with FHA due to the lower apr, 3.4 or so. If you don't do 20% the PMI is permanent, so that's something to consider, but unless rates go up you can refinance it and drop PMI when you're ready to. It will NOT drop when you hit a 20% equity like it did in the past.
I researched the areas (schools, access to highways mostly) and I found that the Mesa Park area is fantastic for my aim of initially living in then renting out my primary residence.
I bought the home around May/June which was the up swing of the market, now you can find homes for 10-15k under list price. Back when I bought I'd put an offer in and be told it sold for cash 5 minutes later. I guess my point here is that if you're going to do it this is probably the time to do so.
Mesa Park has fantastic schools (elementary, at least) and is directly between Mopac and 183. Right by the Domain, Apple, Dell, etc. I work downtown and while it's still a miserable drive the fact that I've got options is great. Hopefully that makes this incredibly easy to rent out.
Now, with that said, I do have a pool. That might completely ruin my renting it out. We'll see in 2 years.
edit: Oh, yeah, I've got a 3/2. The smart thing to do would be to rent out those other bedrooms but I don't know if I can bring myself to have roommates again. I'm nervous about getting back into miserable roommate situations, not that they were common, but I have had some headaches in the past.
edit2: Oh, also, I wish I'd bought a fixer upper. There were houses a street over that were fine but had carpeting instead of hardwood, things like that and were 20-60k cheaper. I bought a house that was pretty well remodeled except not to my flavor. Now I want to rip everything out and redo it but I feel like that'd be a complete waste of money. Windows are far more expensive to install than I realized and wood floors are way less expensive to install than I thought.
I work with an Austin real estate investment brokerage, and while we typically work with off-market, investor-oriented properties, I believe that you can still find good deals in good locations to serve as a primary residence. The only caveat is that they aren't on the market for long. We see a lot of houses that are only on the market for a day or two. My best advice would be to find a good buyer's rep, tell them what you're looking for, and be ready to make an offer quickly.
I think that Austin is fairly unique in the fact that, for the most part, you can treat your primary residence as an appreciating asset! If you ever have any questions, feel free to add me and send me a message.