Out of state investing in Austin?

Question

Hi. I've lived in Austin for 4 years and am moving to New York by July. As much as I regret not buying 3 years ago, I think the appreciation opportunity here is far from over and will outweigh taxes and inflation (Am i wrong?).

I'm considering buying a duplex with existing tenants to not miss out on Austin's appreciation, get a little cash-flow, and remodel when I eventually move back.

Simply collecting rent from out of state doesn't seem like a hassle, especially with a property manager. Is this as easy as I'm thinking? This would be my first home purchase.

Jordan Moorhead · Answer

@Kamrava Pirouz I’ve managed a few properties out of state and as long as I’ve had good handymen around it’s been easy. I have a bunch of great service people that make it easy in Austin and Louisville where I also invest.

Michael Tyler · Answer

The red flag in what you said was “existing tenants.” It’s not a dealbreaker but you have to factor in the extra hassles of not being able to screen them.

Buying in Austin from OOS is the same as anywhere. Get a good manager but keep on top of maintenance yourself. Property managers are more accurately tenant managers who handle repairs on request.

As for appreciation, anyone with a crystal ball had it smashed on the ground last month by Covid. Austin has grown to perform a little bit like California and so I wouldn’t be that surprised to see a price drop. But if it were actually like CA then prices would spike back up quickly too. Apple is moving there in a big way and tech jobs seem to weather this crisis well. Also it’s a state capitol which tend to do okay in recessions. I have no doubt it’ll thrive. Might just seesaw a bit this year or two. I’d not be trying for flips right now.

Danny Webber · Answer

depends on property and mgt company....

If you find the right property, tenants and management life is good. If any of those are out of sync things can get out of whack.

There are still opportunities in Austin and the surrounding areas to be had.

Beau Fannon · Answer

I wouldn't call it easy but the process is fairly straightforward. Currently there are 56 duplexes for sale across Travis and Williamson counties. Do you have a 25% down payment saved and which lender are you working with?

Neil Narayan · Answer

It depends on the condition of the home you purchase and the quality of the tenants you acquire :)