Investing in Seguin

[Gargi Bhatia]

Hi
I am looking at a new construction duplexe in the 78155 area code close to intersection of interstate 10 and Austin st

in Seguin near Texas lutheryn university. It's a couple of miles from home depot and Walmart. The property will provide decent CoC return of 8 percent. l would love to hear thoughts about the general area, tenant profile and the general development in the area.

Thanks

Gargi

[Linda Hastings]

A few observations...   yes, there are a ton of new homes being built, but the infrastructure is not keeping up. Bealls just went out of business at the end of last year. If you want to shop anywhere besides Walmart, a discount clothing store, or the grocery store, you pretty much have to drive to San Marcos or New Braunfels. 

I'm not familiar with the duplexes on Austin St, but the other ones mentioned are being built really close together with not much street parking. That many houses that close together that are all being marketed to investors as rentals and not to owner-occupants tends to lead to the quality of the neighborhood (and thus property values) going down over time as tenants don't usually have the same pride of ownership as owner-occupants. It also means that later when you have a vacancy, there are going to be half-a-dozen (if not more) other properties right there that all look the same as yours listed for rent, too. How do you make tenants look at yours instead of the other guy's (that looks exactly the same)? Lower your rent. Not an investor's favorite thing to hear. I saw this exact thing happen with a new construction neighborhood north of Houston.