How would you rank San Antonio, Austin or in between for rentals?
We're moving to Texas! We have a couple of properties in high-priced Seattle that we are cashing out to reinvest in Texas. We'll be home shopping for ourselves in Canyon Lake, and will be looking to invest about $600-700k additional cash in rental properties. Our goal is to maximize long term cash flow. We're trying to team up with a local realtor/management company to make the whole process work. We've spoken with a few and there are 1 or 2 that we like, and can see working with long term. The problem is that each one only covers a certain area, whether it be high priced Austin, low rent San Antonio, or in between (San Marcos, New Braunfels). So if we pick a company we'll also be picking a location. This isn't really something we want to do piecemeal either because of 1031 concerns. Considering our budget and goals, which of these areas do you think offers the best balance of investment factors such as taxes, home prices, demographics, and economy? Where would you invest $600-700k in order to NET the highest monthly return? This forum is the best place that I could think of to get unbiased and expert opinions. Thanks so much!
@Rory Butler Hello Rory - you pose a great question and I see some very interesting answers above. The company I own - RentWerx - manages homes both in San Antonio and Austin. We know both markets very well and there are positives to each market. You would be literally trying to split hairs by deciding on one SFH versus another in both markets. What you can buy in SA for $150 to $200k is completely different then Austin. That's one factor. The other is CAP rates....which are lower in Austin. On the other hand, Austin has a higher appreciation (potentially a bubble)....so you can reap the rewards of that in a cash on cash return.
One fact to correct above is that it is NOT ok to contact the military chain of command with any non-payment of rent from a service member. As a prior Army Officer, I used to think that way myself. However, you are running into privacy laws at that point and that service member could make a major deal about that.....pursuing a lawsuit going down that path. You don't have the authority or justification to start spreading rumors about a Service Member that could affect their job, or even their security clearance. I would not go there....and we don't go there.
If you hire a solid property management company and allow the screening process to work as designed, you will find that owning rental homes is easy in either market.
Also, we would encourage you to visit our website and sign up for our Investor Pocket Listings. These are off-market homes going up for sale from owners with long term tenants. They are perfect for investors for a lot of reasons.
Feel free to reach out to us if we can assist further!
I'm down in Austin this week to explore the market and get away from the misery of Seattle. After just a couple days it has me seriously considering moving as well! Can't believe I'm saying that! The day-to-day lifestyle here is amazing. I can see it continuing to gentrify much like how Seattle has done over the years. There are quite a few cranes in the sky and a lot of big economic factors pointing in the right direction. But it's yet to blow up like the west coast has.
Seattle is just ridiculous, but you can still get in at a decent price point in Austin (relatively speaking of course). The cash flow might be a bit harder to find than other areas of TX, but I imagine there will be a lot of money being made in Austin over the coming years.
Originally posted by @Ryan Evans:
I'm down in Austin this week to explore the market and get away from the misery of Seattle. After just a couple days it has me seriously considering moving as well! Can't believe I'm saying that! The day-to-day lifestyle here is amazing. I can see it continuing to gentrify much like how Seattle has done over the years. There are quite a few cranes in the sky and a lot of big economic factors pointing in the right direction. But it's yet to blow up like the west coast has.
Seattle is just ridiculous, but you can still get in at a decent price point in Austin (relatively speaking of course). The cash flow might be a bit harder to find than other areas of TX, but I imagine there will be a lot of money being made in Austin over the coming years.
I couldn't agree more about the misery of Seattle and the ridiculousness of the real estate market. Somebody asked why I wouldn't keep my properties in Seattle. I bought low and now I want to sell high. Reinvesting those proceeds in TX will buy me much more freedom than I have here in Seattle.
Originally posted by @Kraig Kujawa:
@Brandon Cravens haha, that's awesome and i can empathize. Ive been looking at a few commercial deals. At what point did you decide you had 'enough' to go big on multifamily (I do have a duplex and triplex right now)
Kraig, I was still enjoying making money on them but after learning about cap rates and forced appreciation on multifamily I began to search for a good deal.
A little contrary to the direction the OP is moving in but I am a native Texan and my first multi is/was a 9plex in Tacoma, WA. Best single investment of my life. Not even a close second. I did buy it right and off market.
I sympathize with those on here who flew down here and enjoy our weather. I was just up in Tacoma last week, and back in February. There is NO WAY I would willingly live somewhere it is cloudy/rainy and cold for 6 months a year.
Originally posted by @Rory Butler:
Originally posted by @Ryan Evans:I'm down in Austin this week to explore the market and get away from the misery of Seattle. After just a couple days it has me seriously considering moving as well! Can't believe I'm saying that! The day-to-day lifestyle here is amazing. I can see it continuing to gentrify much like how Seattle has done over the years. There are quite a few cranes in the sky and a lot of big economic factors pointing in the right direction. But it's yet to blow up like the west coast has.
Seattle is just ridiculous, but you can still get in at a decent price point in Austin (relatively speaking of course). The cash flow might be a bit harder to find than other areas of TX, but I imagine there will be a lot of money being made in Austin over the coming years.
I couldn't agree more about the misery of Seattle and the ridiculousness of the real estate market. Somebody asked why I wouldn't keep my properties in Seattle. I bought low and now I want to sell high. Reinvesting those proceeds in TX will buy me much more freedom than I have here in Seattle.
I didn't suggest keep your properties in Seattle, but it may be worth your time to reinvest in the Puget Sound area. Especially if you have folks up there that you work with and trust and you know the sub markets. I have owned in Tacoma for almost 3 years and it has been going crazy, still deals to be had as well, unlike Seattle and most of King County.
Originally posted by @Brandon Cravens:
Originally posted by @Rory Butler:Originally posted by @Ryan Evans:
I'm down in Austin this week to explore the market and get away from the misery of Seattle. After just a couple days it has me seriously considering moving as well! Can't believe I'm saying that! The day-to-day lifestyle here is amazing. I can see it continuing to gentrify much like how Seattle has done over the years. There are quite a few cranes in the sky and a lot of big economic factors pointing in the right direction. But it's yet to blow up like the west coast has.
Seattle is just ridiculous, but you can still get in at a decent price point in Austin (relatively speaking of course). The cash flow might be a bit harder to find than other areas of TX, but I imagine there will be a lot of money being made in Austin over the coming years.
I couldn't agree more about the misery of Seattle and the ridiculousness of the real estate market. Somebody asked why I wouldn't keep my properties in Seattle. I bought low and now I want to sell high. Reinvesting those proceeds in TX will buy me much more freedom than I have here in Seattle.
I didn't suggest keep your properties in Seattle, but it may be worth your time to reinvest in the Puget Sound area. Especially if you have folks up there that you work with and trust and you know the sub markets. I have owned in Tacoma for almost 3 years and it has been going crazy, still deals to be had as well, unlike Seattle and most of King County.
You're right. Just seems like if I'm going to sell in Seattle I might as well take it down to Texas with me.
Originally posted by @Rory Butler:
Originally posted by @Brandon Cravens:Originally posted by @Rory Butler:
Originally posted by @Ryan Evans:I'm down in Austin this week to explore the market and get away from the misery of Seattle. After just a couple days it has me seriously considering moving as well! Can't believe I'm saying that! The day-to-day lifestyle here is amazing. I can see it continuing to gentrify much like how Seattle has done over the years. There are quite a few cranes in the sky and a lot of big economic factors pointing in the right direction. But it's yet to blow up like the west coast has.
Seattle is just ridiculous, but you can still get in at a decent price point in Austin (relatively speaking of course). The cash flow might be a bit harder to find than other areas of TX, but I imagine there will be a lot of money being made in Austin over the coming years.
I couldn't agree more about the misery of Seattle and the ridiculousness of the real estate market. Somebody asked why I wouldn't keep my properties in Seattle. I bought low and now I want to sell high. Reinvesting those proceeds in TX will buy me much more freedom than I have here in Seattle.
I didn't suggest keep your properties in Seattle, but it may be worth your time to reinvest in the Puget Sound area. Especially if you have folks up there that you work with and trust and you know the sub markets. I have owned in Tacoma for almost 3 years and it has been going crazy, still deals to be had as well, unlike Seattle and most of King County.
You're right. Just seems like if I'm going to sell in Seattle I might as well take it down to Texas with me.
Yep, might as well take it with you. There are plenty of good markets out there. Might as well find one a bit closer if most of the other factors are equal!
Originally posted by @Kraig Kujawa:
@Bob Randolph i was also San Marcos-curious for awhile. After doing some initial research, i learned that there are some restrictions on what can be rented to students. If anyone can clarify more, please do. My memory is a little hazy, but I remember that it was enough to make me look elsewhere.
Kraig - Were the zoning challenges a non-starter for you? Or was there just too little opportunity for the properties in the MF zoning districts you pursued?
Hmm... Thanks for the heads up. I'll have to do a lot more research.
It's a matter of preference of economy. If you like the consistency of a government branch like the military, then SA is a clean shot. SA also has potential of other economies. If you truly believe in tech and you see Austin like a potential SF or Seattle, then you can be comfortable in Austin. However you think about employment is the way to go. Some people think there's tech bubbles, some don't. I personally don't. I'll bank on Facebook (check their move into a new office building), Google, Oracle, etc. List goes on-and-on. Also, I'm biased as an 18 yr Austin resident and 13 yr local Realtor. I went to the University of Texas in the 2000's, and saw this college town blow-up. Tech is just a bunch of smart people that like a city. It's not like the energy sector in Houston or natural resources as much as it's about a cool city. With that said, I think Austin is where the party is at. Would love to learn more about San Antonio though. I've seriously had my head wrapped very hard around Austin as it's my grind so please let me know if I'm missing out on something.
Also to play both sides, you just hit-up San Marcos and the surrounding areas or the in-between areas as there's still a thoroughfare between Austin and SA.