Where is the Austin market headed?

Round Rock, TX · Member since 2017 · 6 posts · 1 vote

I am looking to close on my first rental duplex in the austin area. Its slightly under the 1% (0.84%) rule from a rental income POV however one of the units has a long term disabled tenant and is in pretty bad shape. Is it a good idea to buy this property now with interest rates starting to rise and affordability at an all time low in Austin?

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Dan BurstainBusiness Member

Real Estate Agent · Austin, TX · Member since 2014 · 360 posts · 331 votes

Every economist studying Austin and putting out reports says Buy Now! Prices will be going up. Yes, in 5 years we may dip back a year or two's worth of appreciation but the bounce right back higher. Either way, I don't believe prices will be this low again, especially with interest rates slowly climbing. And for those people who say never buy under the 1% rule, you lost out on a lot of money here in Austin. We are gaining 140 people a day, office space availability is the only thing limiting us at this point. 2.1 months of inventory and it is much less than that for homes under $250K. Now is the time to buy.

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Tyler Wilson
Austin, TX · Member since 2017 · 30 posts · 13 votes
9y
@Jeremy VanDelinder Welcome to BP. Property #6 sounds like a great accomplishment. Are you more interested in buy and holds or fix and flips?
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Jeremy VanDelinder
Real Estate Coach · Round Rock, TX · Member since 2015 · 431 posts · 235 votes
9y
@Tyler Wilson
I'm doing both. My flips are generating the cash for my holds--I'm on my third flip now and have two rentals with a third one under contract.
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Michael LaPlaca
Investor · San Francisco, CA · Member since 2017 · 9 posts · 0 votes
9y
Great advice! I've thought about Austin as a possible future investment. But a little more focused on the Dallas area. Any thoughts as far as comparing the two cities for investing in multi unit properties? They both seem like winners.
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Jarrod Weaver
Broker/Investor · Georgetown, TX · Member since 2011 · 249 posts · 146 votes
9y
@Michael LaPlaca from the research I've done and conversations with other operators in the multi arena, I'd recommend looking at smaller areas. Prices in the major metros have been driven to levels that can't be justified or produce profit. Secondary markets like Lubbock, Waco, Corpus Christi, Huntsville, etc are providing better opportunity.
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Tyler Wilson
Austin, TX · Member since 2017 · 30 posts · 13 votes
9y
@jeremy
@Jeremy VanDelinder Congratulations. It sounds like you have a successful strategy in place. Are you looking for any off market properties at the moment?
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Jeremy VanDelinder
Real Estate Coach · Round Rock, TX · Member since 2015 · 431 posts · 235 votes
9y
Always--I'm connect with Austin at your company as well as a few other wholesalers.
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Shil Shirol
OP
Round Rock, TX · Member since 2017 · 6 posts · 1 vote
9y
wow, thanks for all the great inputs guys!! I closed on the house today and I'm looking for some recommendations on contractors to change the flooring in a couple of bedrooms. the prior owners had vinyl which is coming apart
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Celena Lathrop
Austin, TX · Member since 2016 · 45 posts · 24 votes
9y
Yes!! The cash flow you stated is typical and totally worth it for a duplex, which are hard to find in this market. I recommend booting out that tenant if possible and doing some basic rehab. Could be a cash cow property as a flip OR buy and hold. Best of luck!
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