Austin is Uninvestable

[Steven Greenwalt]

Alright — the title might sound dramatic, but it’s genuinely where my head is at with the Austin market. That said, I’m open to being proven wrong.

I’ve been diving into STRs, BRRRRs, and LTRs across Austin and the greater metro. No matter the strategy or purchase price, the numbers just don’t seem to work. Most deals I’ve run either bleed cash monthly or break even at best.

Rates are still high, sure — but more than anything, the property taxes here feel like the real killer. It’s hard to make anything pencil out with how aggressive they’ve become. Has the tax burden effectively made Austin uninvestable?

I’m not against going out of market, but like a lot of folks getting started, I’m focusing close to home for now.

So I’m asking:

• Is anyone making deals work in Austin right now?

• If so, how?

• Are there specific submarkets or property types that still cash flow?

Would really appreciate insight from people actually operating in this space. What’s working — or not — for you?

[Don Konipol]

Quote from @Collin Hays:

I live in Texas, but I've always found it to be "uninvestable" for income. Taxes and insurance are far too high.

Yes, so true.  Property taxes are high to make up for no income tax.  Hurricanes and tornadoes drive up insurance rates.  Relatively low rents add to the problem.  However, “deals” can be “worked” and positive cash flow can result - but only with a 20-30%down payment and a purchase price at least 10% below market value.