Rental Property Investment Austin-Central Texas

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Rental Property Investment Austin-Central Texas

Ryan Dandrea
Member since 2020 · 2 posts · 3 votes

Hey everyone, I’ve been listening to the podcast for awhile now(a little over a year) and just joined on the website so I am BRAND NEW to real estate investing. My fiancé and I currently live in Williamson County and can’t wait to start off with rental properties when the time is right. After reading through a lot of threads here it seems buy and hold real estate is the best strategy here in the Austin area. What are some cities/neighborhoods outside of the Austin city limits that would be good to own rental property in? Would Killeen be a good area? Jarrell? Both seem pretty affordable.

Any insight/advice or a different perspective would be great!

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Katie Greenman
Real Estate Agent · San Antonio, TX · Member since 2020 · 103 posts · 78 votes
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I would look into San Antonio! Not too far from Austin and much lower market values to get into! Tons of employment and things that attract military, retirees, college age, and families. New Braunfels has potential as well! 

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  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    5y

    @Ryan Dandrea I like Bastrop, Taylor and Elgin. Killeen isn't on my list because of the lack of diversity in employers. Do you own a home currently and have you thought of househacking in the MSA?

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  • Robert Eyers
    Property Manager · Austin, TX · Member since 2019 · 60 posts · 53 votes
    5y

    @Ryan Dandrea, I agree with what @Jordan Moorhead says about Killeen. I've done some work up there and wouldn't recommend it as a starter project. Limited vendor options, strangely high number of applicants with criminal history... and while these were all one-offs, we had to chase off transients that managed to break into a vacancy, had a scammer impersonating our listings... and more. Sure, that could happen anywhere, but in the hundreds of listings we do in the Austin metro, they are extremely rare.

    Bastrop looks great. Buda seems to be picking up. Even Lago has some opportunities. 

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  • Ryan KellyBusiness Member
    Real Estate Broker · Austin, TX · Member since 2018 · 1k+ posts · 1k+ votes
    5y

    @Ryan Dandrea Welcome to BP and Austin can be a great market for long-term appreciation. Your purchase price point and goals will dictate where you buy. My rentals are in Austin proper, but that can require a higher purchase price. I like the northern suburbs for the quantity of options and still having a lot of nearby amenities for the tenants (good schools, restaurants, grocery, etc). If you are looking for something less expensive, as @Jordan Moorhead mentioned, you can target the outer cities of the metro like Elgin, Bastrop, or Lago Vista. The farther you go out, the slower the appreciation and potentially longer it will take to secure a tenant as commuters won't want to live that far out. What is your time frame?

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  • Bryan Noth
    Realtor · Austin, TX · Member since 2016 · 1k+ posts · 1k+ votes
    5y

    Welcome @Ryan Dandrea!  To add onto @Jordan Moorhead's point of lack of employer diversity in Killeen, I would look into area specific metrics, namely average vacancy rate and DOM for tenant placement.  Having a high effective vacancy rate can devastate the cash flow.  

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  • Katie Greenman
    Real Estate Agent · San Antonio, TX · Member since 2020 · 103 posts · 78 votes
    5y

    I would look into San Antonio! Not too far from Austin and much lower market values to get into! Tons of employment and things that attract military, retirees, college age, and families. New Braunfels has potential as well! 

    4Reply
  • Joe Scaparra
    Investor · Austin, TX · Member since 2013 · 680 posts · 1k+ votes
    5y

    @Ryan Dandrea, Hi I don't have much info to go on about you so I am going to make a few assumptions, in order to give you some advice.  You currently live in Williamson County, new to investing, so I am also going to guess you are renting and currently live close to where you work.    With that here is my advice.

    Worry not where is the best place to invest.  Better to invest where you lay your head on the pillow each night.  In other words the first investment property you should  buy is the one you plan on living in.  That being said, I am also going to assume you don't have any children living with you or if you do they are under 5 yrs old.  If so, then you absolutely should look for a duplex in Round Rock, Georgetown, Hutto, Taylor or even Jarrell.  You see if you are renting you are essentially negative cash flow.  Let's guess your renting for $1200 a month.  Would it be better to rent for 1200 a month or own a duplex and be out of pocket $800 but own your own place.  A place that you can park right at your front door and/or park in your 1 car garage, have a small private backyard and may even have a slightly larger place in which to live.  It won't have the community swimming pool, or other amenities that you don't use at an apartment complex but you will be at the beginning stages of building wealth through real estate.

    If you buy a duplex and rent out one side, say $1200 then you could have a total payment of $2400 and be close to what your are renting now and your monthly outlay would be about the same.  Not quite because you would still be responsible for maintenance and vacancy cost assuming the $2400 mortgage payment includes taxes and insurance.  Beginning to sound complicated but it really isn't.  

    I love the Williamson county area, I own 4 duplexes there (Georgetown, Round Rock, and Taylor).  It is a great place to start.  If you have further questions, message me and I will gladly talk with you one on one!  Cheers.

    2Reply
  • Michael A.
    Member since 2021 · 24 posts · 4 votes
    4y
    Originally posted by @Jordan Moorhead:

    @Ryan Dandrea I like Bastrop, Taylor and Elgin. Killeen isn't on my list because of the lack of diversity in employers. Do you own a home currently and have you thought of househacking in the MSA?

    Do you see higher appreciation opportunities in these areas compared to New Braunfels, Converse, San Antonio, Seguin, or similar areas?

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  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    4y

    @Michael A. I don't pay attention to those markets as I live and work in Austin. I do know Austin was #2 for appreciation in the country last year and I didn't see any of those other cities on the list.

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  • Dan BurstainBusiness Member
    Real Estate Agent · Austin, TX · Member since 2014 · 361 posts · 331 votes
    4y

    Bastrop and Taylor will continue to see nice appreciation with tens of billions of dollars going into those cities through huge business deals.  Bastrop is building a huge entertainment production studio and Taylor just landed about a $40 billion deal when it is all done for a Samsung plant.  Want to follow appreciation, follow the jobs.  Hutto will also appreciate nicely as well as Leander, Pflugerville and Round Rock.  Kyle down south should see some decent appreciation.  Austin of course will be at the forefront but if you are still looking for something under say $375K these other areas might be where you want to look.  

    [email protected]512-588-3260
    Dan Burstain, Investment Realtor51 Review
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