Looking to invest in NW Austin (Cedar Park, Round Rock)
Hi everyone,
I'm from the San Francisco bay area and I'm just starting out in the real estate investment world and I'm really glad I found this website. I am learning quite a bit by going through different posts on Austin real estate investing. I am looking to invest in a single family home in Cedar Park or Round Rock (preferably Cedar Park). The reasons being some of the zip codes in these areas have good schools and these areas are also pretty close to tech companies. I am primarily looking for appreciation and not cap rate (completely fine with less cap rate after paying mortgage using monthly rental). However, before taking the plunge, I wanted to get some expert advise.
- What is the prediction for these areas (Cedar Park or Round Rock).?? Did they already reach a point where further appreciation will be very slow.?? In the coming years, how is the job growth going to look like in the NW Austin.??
- I do not want to spend beyond $250,000. I see that none of the new constructions are available in this price range(checked online and could not find any). So, I am open to buying old constructions. Ideally, I would also like the lot size to be bigger (>=0.25 acres). I see few such listings online. But I am not sure if there are any catches. So, is it possible to find good single family homes with big lots in my budget.?? (in a good location and good school district).
- If I end up buying an old home, what will be the disadvantages.??
- How fast old constructions get rented in these areas.?? Will I ever end up in a situation where I can't find a renter for months.?? (from reading online, I found that houses in these areas get rented fast. Not sure if that applies only to new houses).
- Can I also get suggestions/references for few local realtors who can help me find the house.?? (would be ideal if the realtor also deals with property management).
I would really appreciate if any expert can answer the questions. Thanks in advance.!!
Hi Naveen,
Let me see if I can answer your questions.
What is the prediction for these areas (Cedar Park or Round Rock).?? Did they already reach a point where further appreciation will be very slow.?? In the coming years, how is the job growth going to look like in the NW Austin.??
****These cities continue to grow and job growth remains very strong for NW Austin and its Tech Corridor. I think appreciation will show steady growth for a number of years to come.
I do not want to spend beyond $250,000. I see that none of the new constructions are available in this price range(checked online and could not find any). So, I am open to buying old constructions. Ideally, I would also like the lot size to be bigger (>=0.25 acres). I see few such listings online. But I am not sure if there are any catches. So, is it possible to find good single family homes with big lots in my budget.?? (in a good location and good school district).
*****You can find good homes in Cedar Park that go to the very good Leander School district for under $250,000. There are even a few with 1/4 acre or more lots although that limits you a bit. As for new construction, you can find it just above that price point at about $260K.
If I end up buying an old home, what will be the disadvantages.??
****** Sure, older homes come with more Cap Ex needs. In other words, you need to replace things a lot sooner if they have not been replaced. A home built in 20+ years ago (in say 1997) may be on its original AC and roof. Both of which might need to be replaced soon. A costly problem. Where as you might buy and sell a new home before ever thinking of needing to replace anything major like that. Now old homes do have some positives. They usually have large mature trees in the neighborhood vs. new developments. Many people like the look of that.
How fast old constructions get rented in these areas.?? Will I ever end up in a situation where I can't find a renter for months.?? (from reading online, I found that houses in these areas get rented fast. Not sure if that applies only to new houses).
****** House get rented fast when they are priced right and don't rent fast when they are overpriced. It is just that simple. We are at 95% occupancy and if you price your place at market rate you should have no problem renting it.Any place that goes for months not rented is severely overpriced or has major things wrong with it.
Can I also get suggestions/references for few local realtors who can help me find the house.?? (would be ideal if the realtor also deals with property management).
******* I don't think I am allowed to toot my own horn on this site even if asked... I am sure someone will PM you.
Take my advice with a grain of salt and see if it fits your need. For your budget, you may want to consider Pflugerville, Kyle, Buda, and even down to New Braunfels or some part of San Antonio. I am also from the bay area and also invested in Austin area (a key reason is that I am familiar with the area, having graduated from UT). I prefer class A property (see definition here), because it will have less hassles (I'm aware that cap rate and cash flow is lower for class A property, as compared with the other classes, but I still prefer class A). I used a property manager, because I lack time & expertise, and because I believe that I've found a great property manager. Please consider my realtor Mike Hall, who also manages property (Disclaimer: I don't get paid for referring him, but I'd like to see that people get professional advice from him, because he is great).
Naveen there are lots of houses in Leander, Cedar Park, RR which are still under $200k. (depends what you are looking for). I pass those every day. I don't pay more than $200k for rental properties in the area because of the higher property tax keep taking my profits.
I recommend looking at markets that are another step or two outside Austin. Round Rock and Pflugerville are great communities but are a challenge to invest in profitably. Instead, look to Taylor, Jarrell, Temple and Belton where you can buy 2 properties for $250,000 and end up in a much higher NOI than is possible closer in. This is my experience on the north side, I'm sure it is similar to the south, but I'm just not as familiar with that market.
Do-able market, but tough with all the multiple offers when a property becomes available, not to mention the bidding wars that ensues.
Did it for over two years in the area and struck out every time in the bidding. Hopefully you can do better.
We get calls and letters all the time asking are we selling our house as inventory is low and not many people are leaving the Austin area.
All in all things should not slow down anytime soon.
Why Invest in Austin, TX
As “The Heart of Texas” – Austin is the 4th largest city in Texas, and the 11th largest city in the U.S. In addition to being the political seat of the state, it is a major cultural and music hub – it’s also knows as “The Live Music Capital of the World” and hosts the annual SXSW (South by Southwest music festival) – one of the largest music festivals in the U.S. – which brought over $220 M into the city in 2013,[1] and has an economic impact that far exceeds the festival’s 14 day length. It’s a young, vibrant city, where the unofficial motto is “keep Austin weird” and where the average age is 31 years old – a full 9 years younger than the state average. [2] Austin is home to headquarters for Facebook, Google, Dell, IBM, and other high-tech employers, which have given new life to the downtown, and have created an influx of Millennials and their families – all looking for a place to live.[3] With a strong university culture, no state of personal income tax, and world-class cultural institutions such as the LBJ Presidential Library and Museum, Austin is a great place for people to visit and to live.
General Facts- The population of Austin is about 842,592 (U.S. Census)
- Metro population of Austin is 1,840,000 (Forbes)
- 5.4% population growth from 2010 to 2014 (U.S. Census)
- Home to SXSW Music Festival
- Headquarters of Whole Foods – the nation’s biggest retailer of organic and natural foods(Reuters)
- Home to over 4,000 technology companies, which make up 35% of the area’s total payroll (Forbes)
- On CNN Money’s list of 10 fastest growing cities in the U.S. (CNN Money)
- #1 on Forbes list of America’s Fastest Growing Cities 2014 (Forbes)
- Number 10 in Top 10 Greenest Cities in the U.S. (Popular Science)
- 11th Fittest City in the U.S. (American College of Sport Medicine)
- #2 on Forbes list of Best Cities and Neighborhoods for Millennials (Forbes)
- Texas State Guard stationed at Austin’s Camp Marby – a landmark base that dates back to the 1800s (militarybases.com)
@Naveen G. not sure if this may help or not, but I created a guide on Austin Neighborhood Grades here: https://www.biggerpockets.com/blogs/8592/61981-ult...
The interactive visualization map you can find within that blog post has plenty of contextual notes for each neighborhood that may help you.