House Hacking, Airbnb, first time home buyer

[Bridgette Ray]

My husband and I are looking for our first home. I have been listening to the bigger pockets podcast and really want to start finding a good investment home that we can rent out on Airbnb, or a mother in law suite attached that can be rented on Airbnb. Our dilemma we have run into is property taxes. We were approved for a $350,000 loan but want to keep our budget looking at $325k. We want to put the minimum down 3.5%. We found a home I loved, it was $385k 4 bed 3 bath and it needed a lot of work (signs of water damage or mold in a bathroom, blue carpets, all bathrooms needing updating). It had good bones and was on the market for 200 days. What was great was that the garage was converted into the fourth bed and bath and completely separate from the rest of the house. It has great potential for renting to a college student or airbnb and since it was down the street from University. Then we realized the property taxes in this county were $8000+ dollars. There is no way we can afford a home at $325k with such high property tax. We have almost 30k saved up for a home but want to used that wisely. In our area, San Marcos/Kyle, TX. Almost every home we have seen has had $6000-8000+ in property taxes. Most homes with good rental potential are $385k and up. The taxes are insane. I don’t know how to navigate a low budget and a dream of renting out to build wealth. Should we be waiting until we can save up enough for a larger down payment? 

[Carlos Marin]

Hi Bridgette, my wife and I did exactly that in the Round Rock area. We bought a SFH with a "in law" floorplan and divide the master bed and we are renting on Airbnb as an studio. Check my last post where I explain more about it. It is definitely a great way to start.

Property taxes can be hard here in Texas but you can still find some lower taxes areas. Kyle might have MUD taxes which make it even higher, good thing is that those are temporary. Also, since you will be living there, I can't recommend enough that you apply for homestead as soon as you buy. 

If you are not working with an agent already, I would be happy to help you. I can show how our Airbnb is doing. I think San Marcos/Kyle area it's a great place for this strategy. 

Best of luck, you have a solid strategy!