Why Do You Invest in Austin? (Testimonial for BP!)

20 Replies

BiggerPockets! I work at BP and I'm working on building a landing page for Austin. Would anyone be willing to share why you choose to invest in this city? What makes it so wonderful?

Consistent track record of:

  • Job market growth
  • Population growth
  • Low unemployment
  • Low commercial vacancy
  • Low residential vacancy
  • Property Appreciation
  • Desirability for habitation (events, weather, attractions)

TL:DR answer: I live here, I love it here, and it's the most fundamentally sound region in America.

Long answer, Austin is the most economically sound city in America.  Let's look at major headwinds on national level and compare them to the local impact here. Take China trade for instance. China trade has been in the dumps for a year. Locally we lost 80% of of our onboarding and offboarding international cargo at the airport. That cost Austin a lot of jobs. But, it didn't even register as a blip in our total airport traffic or local job market.  Austin is strong.

Let's look at our job market.  Austin has an incredibly diverse job base. No single job category, as tracked by the Federal Reserve, accounts for more than 18% of our total job base.  It would take another global economic crisis to do substantial damage to our local economy.

Professional and Business Services 18%
Trade transportation and utility 18%
Government 16%
Leisure and Hospitality 12%
Health and Education Services 11%
Construction and Mining 6%
Financial Activities 6%
Manufacturing 6%
Other Services 4%
Information including media 4%

Let's look at my proprietary U-Haul index. The only other town that rivals Austin as a prime destination for relocation is Nashville.  Most of the other potential destinations are becoming economically unsound. My U-Haul index shows this. We have so many U-hauls in town that the company is practically giving them away to people who want to drive them elsewhere.

Sure, someone can buy a cash flowing property in an economically unsound city and make $200 a month off of it for 5 years but they'll end up selling it for the same price they bought it for.  Here in Austin, it's an appreciation game.  Where else can you generate 4,5,6,or maybe even 7% appreciation on your investment annually?  Where else can you get that appreciation and only have to pay 1.03X to 1.1X of the national house price median to do so? 

Opportunities. Austin is full of opportunities. Nearly every street has an opportunity for the right person.  

Short answer: to build wealth. long answer: Because its number 1 in so many categories and the long term growth has been amazing with no end in sight. The bbq is pretty good too. 

I notice that everyone who has answered your question is also local (with the notable exception of @Nina Hayden ). That implies to me that the true answer is closer to what my answer is: It's where I live. Yes, the metrics are great, the economy is diverse, the appreciation is crazy, but we're still almost all local, and I expect that's the case of many urban investors in moderately to very expensive markets.

I accidentally fell into real estate investing when I moved jobs to a data analyst position on the other side of town and wasn't ready to sell my home, so I rented it out. Once I actually saw the numbers and had set up the systems, I realized I had to continue to expand. Austin was the town I knew, so I continued to buy out here.

Now that I'm a somewhat seasoned investor, I am looking at the suburbs nearby, but I have access to the local MLS, know the area very well, and like to actually be able to see what I own, so I don't expect to ever go more than about an hour from where I live.

I'm looking to get invest in my first rental property within the next 6 months. I have owned 2 houses that have appreciated greatly in the past 10 years which has been awesome! Since the pricing has gone up so much around town, is it still possible to find a fixer uppers that dont cost a ton? For my first investment I am looking at staying under $120k to free up $$ in case I find another property shortly after.

 @David Chapoell:

If you find something for 120k please let the rest of us know. Maybe partners would be helpful to stretch your capital, if sharing the returns works out in the math. 


 

@Lauren Hogan

Large tech and startup community, I live here :-), top notch university, progressive and hip vibe.

All of this leads to a place people want or need to be which drives our population, wages, occupancy and absorption rates.