Kyle or Dripping? Which is a better investment?

Question

Hello,

Looking into buying an investment home in Kyle or Dripping Springs. Also looking to rent. Which one do you think is a better investment?

The market has almost nothing now, the Kyle property has a MUD in a brand new community and is at 3.03% which is crazy but a much better home (also 4 beds) vs Dripping, with lower tax rate and 3 beds. It will come down to which will appreciate more and what rental prices and desirability. All hard to predict. What is your best bet? Thank you!

Joe Scaparra · Answer

@Mil Malaq     Both areas will be good investments. The HWY 35 corridor is hot and will remain hot.  This favors Kyle.  Dripping Springs is growing rapidly as well,  It too will be a great area to invest.   So which is better?

My advice is invest in the property that has the best current numbers.  So if you are a long term buy and hold and looking for cash flow; the property I would select would be the one that produced the most net operating income.  Appreciation is going to happen in both areas and to try and figure out which area would be better is anyone's guess.  Does it really matter if you are more interested in cash flow.   Appreciation is nice but what is your goal?

For example, I began investing for cash flow 20 years ago.  I was not really interested in appreciation as much as I was in cash flow.  Because of my goal, I invested in duplexes and chose local locations that gave me the best cash flow at the time.  I have 19 units and have not sold a one since I began 20 years ago.  Although my properties have doubled, tripled and some even 4X my buy price, I haven't realized the gain because I haven't sold!  I haven't sold because selling doesn't help maintain my goal/why.

My goal:  Invest in income producing real estate to provide substantial, sustainable, predictable cash flow.  My Why:  To allow me to become financially independent that enables me to do what, when and where I want.  Basically this allows me to do whatever I desire with MY TIME!  Be it traveling, visiting friends, hanging out with family or going to events.  Rental income and not appreciation gives me the best confidence of being able to consistentaly achieve both my goal and my why.

What is your goal and your why?  Figure that out and it will not only help you focus on a strategy, but will also direct you in the type of property to buy.  I focused on duplex investing as it was not too complicated but produced more cash flow than SFHs.  Lots a ways to skin a cat.  I found mine and then applied the cookie cutter approach.  Good luck and Cheers!

Rowland Atiase Jr · Answer

Kyle has better foot traffic as it's got access to san marcus, austin and i think in the future san antonio. Dripping springs will be a for a particular renter who wants to be out in the country side of Austin.

Dripping springs will probably appreciate at a higher clip, Kyle will have more tenants that you'll be able to choose from.