Real Estate investment in Austin TX?

Question

I am looking for investment property in Austin TX which can be rented out for long term period. Please share any pointers or area suggestions.

Thanks in advance!

Bryan Noth · Answer

@Nathan W.

I transitioned two traditional long term SFH rentals last year.  I have a STR in Cedar Park and a MTR in North Austin.  And as long as the minimum stay is at least 30 days it does not fall into the STR category.  Both models have performed strongly thus far with low vacancy and higher cash flow to boot

Dan Burstain · Answer

Price point will dictate area suggestions but Leander, Georgetown, Hutto, Round Rock, East Austin, Kyle, and others all have their reasons for a great investment spot.  The jobs/companies are not going to one part of town.  They are in every sector.  Apple in the Northwest, Dell and Amazon in the North, Samsung in the Northeast, Tesla in the Southeast, Google and Oracle in Central along with University of Texas and Government. Micron, AMD, and one or two others are talking about expanding more into the surrounding area with tens of billions of dollars.  The future remains very bright.

Bryan Noth · Answer

@Laukik Hoshing that is a very easy metric to hit for the Austin MSA and keeps options open for choosing a location.

Laukik Hoshing · Answer

Thanks everyone for replying.

@Jordan Moorhead, @Bryan Noth - Currently I am based out of Seattle,WA and looking for out-of-state real estate investment.

My short term goal would be to rent out the investment property (preferably Long Term). For initial period I am fine with paying out-of-pocket amount (around $500/month) but it would be great if the property becomes self-feeding (or positive cash flow) in couple of years.

But eventually I would like the property to appreciate over time.

Jordan Moorhead · Answer

@Laukik Hoshing what are you goals? It's hard to know where to point you without knowing what your goals are for having a long term rental in Austin.

Nathan W. · Answer

@Bryan Noth I agree. I've been looking into the STR / MTR model in the Austin area to get both cash flow and appreciation. If my tenants hadn't agreed to the new price hike I was planning on turning that LTR into one.

Have you done any STR in the area? If so what parts of town? Regulations are tough in Austin itself but there are opprotunities in the subburbs.

Eliott Elias · Answer

Expect to negative or break even cash flow for the first few years. Investors are playing the appreciation game.

Jordan Moorhead · Answer

@Laukik Hoshing you can find one that breaks even at the very least

Bryan Noth · Answer

@Nathan W. I usually see cash flow positive on SFH LTR in Austin within 3 years of acquisition.  The last 2 years I have been able to force that within 12-24 months of acquisition.  However, the STR and MTR model are comfortably cash flow positive right out of the gate.

Bryan Noth · Answer

Thank you @Lucia Rushton!

@Laukik Hoshing I would echo several other comments here in asking, what are your purchasing criteria for a property in Austin?  Location, jobs, price point, etc.  That may help get you responses that apply to your situation more directly.

As for areas @Dan Burstain said it, almost every direction has some merit.  The rent : purchase price ratio on LTRs does tend to be lower, especially in hot areas.  However, rent growth in the last 2 years has kept the ratio on close enough to pencil out in many situations.

Real Estate investment in Austin TX?

Most Popular Reply