Austin Investors — Where Would You Buy Today for Cash Flow + Appreciation?

Question

I’m heading down to Austin next month and plan on checking out some properties while I’m there.

Obviously, the Austin housing market has taken a pretty significant beating from its peak. That’s actually part of what has me interested in taking a closer look at it now.

For those who live or invest in the Austin area, what are your thoughts on the market today? Do you think prices are starting to get attractive, or do you think there’s still more downside ahead?

If you were buying today in roughly the $300k–$500k range, which areas or ZIP codes would you be looking at for a combination of cash flow and long-term appreciation?

I’m also interested in properties where there could be an opportunity to add an ADU/second unit to improve the rental numbers.

Would love to hear from people who are actually on the ground in Austin — what are you seeing right now, where would you be looking, and what areas would you avoid?

Thanks a lot in advance — really appreciate any insight!

Wale Lawal · Answer

@Chris McCarthy

This more likely seems to be an endeavor in trying to figure out something that works than in vain attempts in trying to figure out the bottom. If we talk about properties worth somewhere in the range of $300,000 to $500,000, then location would be something that I would examine based on parameters such as rent, taxes, insurance, vacancy rate and ADU.Good luck!

Michael Eskenasy · Answer

I wouldn’t start with “Is Austin attractive yet?” I’d start with which specific properties are mispriced relative to their future utility.

A market can be down 15–20% from peak and still be a bad buy. Conversely, one property can be excellent while the broader market is still soft.

For the $300k–$500k range, I’d underwrite this at the property level:

purchase basis → true market rent → taxes/insurance → realistic maintenance/vacancy → financing → renovation requirement → ADU/second-unit feasibility → resale optionality.

The ADU piece is where this gets interesting. I wouldn’t just ask whether a lot is “big enough.” I’d want zoning, setbacks, utility access, parking, easements, HOA restrictions, construction cost, achievable second-unit rent, and whether the additional basis actually produces an acceptable return.

I’d also separate cash flow today from appreciation thesis. If the deal only works because Austin eventually gets hot again, you’re speculating. If it works reasonably well today and future appreciation is upside, that’s a much stronger position.

We’ve designed our real-estate systems to look at markets this way — property intelligence first, then financing and exit paths, rather than starting with a ZIP-code recommendation and forcing the deal to fit it.

If you already have a few Austin properties you’re considering, reach out. I’d be happy to pressure-test them with you and show you what I’d be looking for before you make the trip.