Hi Fellow investors,
We are exploring areas to invest in Austin Texas for appreciation. We are new out of state investors.
Which areas you have cash flow break even? Which areas you will expect hyper appreciation and which areas for cash flow positive?
Looking forward to your responses.
Cashflow break even- If using traditional models (buy a single family home and lease it out to a single family). These do not exist unless putting 50%+ down to purchase.
Hyper Appreciation- beyond the Austin MSA 20+% that we've seen year over year? I'd focus efforts on areas that have the ability to realize the greatest returns. It's much easier for a 250k property to go to 500k than it is for a 500k property to go to 1M. The buyer pool for 250-500k is MUCH deeper in Austin than the pool of buyers looking in Jumbo loan territroy. Larger macro shifts need to happen to deepen the high end pool these shifts take years to develop. Whereas In order for your 250k house to double in value we just need the demand to continue. No demographic shift needed. Obviously this is a hyper-simplistic view of the market but hopefully it gives a new framework to your thinking?
Cashflow positive- Like I said, highly unlikely via traditional methods. That being said- I'm creating cash flow positive deals by using a rent by the room model. Putting 20% down to buy a 4bed 3 bath 2000sqft house under 400k and leasing out each bedroom for 800-900/ month. That's what has worked for me and my clients.
For cash flow you will likely need to be outside of Austin.
For appreciation you want to be closer to the core of Austin or near to an area that is posed for huge development
@Jay Sheth The best place in Austin to invest for positive cashflow is San Antonio.
@Jay Sheth what's your price point? That will decide the next course of actions ---how much down/areas for break even/growth etc..
@Prash Manohar upper limit is 450k sale price. I plan to do 20% down.
@Jay Sheth ok, no chance of break even ...rents are not catching up and property taxes will rip you apart lol..you can get awesome homes in any high growth area with that pricer point though within Austin city limits
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