Being remote and have never lived in Austin, it's quite confusing to know that between Leander and Pflugerville, which one is a better prospect for investment, say we'll keep it for 5 years. We've observed that Leander is around 220-225/sq ft whereas Pflugerville is around 215-220/sq ft. Pflu also offers newer construction and larger homes but overall Leander seems to have a full package, such as schools, shopping, ameneties, metro etc. Our main concerns are:
- Which one will rent better? So far the rental comps show a mixed (or similar data) as newer communities in Pflu and Leander have average school rating. Not talking about the established neighborhoods where the schools are excellent.
- Which one has more foundation settlement issues? We've heard that East of Austin has more clay in soil and perhaps more prone to settlement issues.
- Which one has higher property tax and chances of hiking every year? Blackhawk and Avalon communities in Pflu has 3.25% property tax but the hike year after year is not too high. Leander is about 2.8 but the hike seems to be 7%
- In terms of HOA, Leander communities run slightly higher on HOA
@Hemal Patel in my opinion Leander is the better bet but Pflugerville is not bad. Some things you may not know is that Leander has a metro rail stop where Pflugerville does not, so you can hop on there and go all the way to Downtown Austin. Leander is building a billion dollar lagoon area where there will be restaurants and shops. It also sits just about 15 minutes from the new Apple campus that is still being built. Leander does have better schools than Pflugerville as well. Pflugerville is closer to central Austin and it is starting to quickly see pretty good appreciation as well.
I would go for Leander, I have been selling a lot of investment props there and rentals are taking a week or so to lease out. Plus with all the new commercial investments coming into the area it will just drive more growth.
@Hemal Patel - the best area "between Leander and Pflugerville" is exactly between Leander and Pflugerville - Round Rock. You will get the best of both.
It looks to me you need to solidify your search criteria (what else you have in it?) and also need to calculate your investment using an apple to apple approach - you might be surprised to find out that, for example, a property with higher rent and lower price is a worse investment than one with lower rent and higher price, just because of the tax rate and HOA differential. PM me if you need assistance in these two areas.
Both the rents and tax rate are localized and can differ substantial (1.9%-3.31%) just because you cross a major street or are in a different neighborhood - it's misleading to give you an answer on such large qualifier (Leander vs Pflugerville), maybe if you were to discuss a neighborhood vs another. Make sure you are looking at the property tax without any exemptions (as you'll not get any as investor).
Foundation issues are common in TX, and it's more of a question of when, not if. There are maintenance measures that you can take to control it (watering the foundation). East of Austin has more clay in soil and is perhaps more prone to settlement issues, but that doesn't mean you'll not have that problem in Leander.
How much you are looking for DP? You will not cash flow without 30-40%+ DP, not with 3.25% tax rate and HOA and PM - so you are not going to get rich on cash flow for 5 years. So, what are your goals? Speculation in hope of continuous crazy appreciation? Safe harbor from inflation? FOMO?
These are all great answers! I'm so thankful to all of you. I personally like Leander, especially the bottom half of Leander that's more connected to Cedar Park. I don't want to go too north of Leander, which is now being promoted as Liberty Hills. Round Rock will be an amazing investment, but I don't have that kind of budget :). With the budget I have, 450-500K, I mostly get houses built in early 2000 and we prefer to get a 2010+ built, if possible. It is amazing to get some +1 on Leander :) and I'll keep up my search around that neighborhood.
@Costin, I totally agree with your understanding. We're looking at 25 to 30% down at this point.
You can get new builds in the Larkspur subdivision of Leander within the 450 to 500 range.
I think they are both reasonably good investments, but Leander is probably better. Because of the Edward's Plateau, the soil tends to be much less stable around and east of I-35. HOA and property taxes can vary. If communities have MUDs or PIDs to cover the cost of getting utilities out to the new development, taxes will be higher. You (or your realtor) need to do your research on individual communities.
As Austin continues to grow, I think Leander is a better bet mainly because of infrastructure. Aside from the light rails mentioned previously, there are toll ways and newer, larger, highways in general. I personally prefer to avoid I-35 at all costs and I think many others feel the same.
I'd stay away from new builds right now. Builders have been causing all sorts of trouble in Austin lately. I know people who have been under contract for new builds for almost a year, close to closing, and have had their contracts pulled out from under them so the property can be sold for a higher amount and/or significant material cost hikes. If you want new build, I'd go for "almost new" so you can stick with promulgated TREC real estate contracts rather than builder contracts which are typically extremely lengthy and padded with builder "outs"
@Hemal Patel I have had a lot of my investor clients focused on Leander, mainly because it has a decent level of inventory at their preferred price range AND has a lot of amenities. Most clients were able to lease the homes quickly because of demand. I agree with others who recommend paying close attention to taxes. You will especially see higher taxes in the new northern communities where they are still building infrastructure, utilities, and schools.
Thank you so much! This is good to know that newer communities may attract a little more property taxes, and I've noticed that too. My focus area is mainly central or southern Leander (the one that is closer to Cedar Park).