All Forum Posts by: Dan Burstain

Vacancy rates are about 94%.  If you price it right and there is nothing terribly wrong with the property then it will rent fairly quickly.  As for it being a bad time to invest in Austin because we are at the top of the market....um that has been the case about 28 of the last 30 years here.  We have steady appreciation so each year is a new top.  There are 100 people moving here a day and companies continue to be moving in as well.  I see no slow down for at least the next 5 years and again, we have had 30 years of steady appreciation with a more diversified economy than ever before.  

One other thing @Andrew Schlessinger.  I know this goes for the University of Texas at Austin, and not sure this applies to you but if your son buys a property in Texas he can declare residency to UT after 12 months so you don't have to pay out of state tuition the last 3 years of college.  You don't even have to own the property all 4 years.  Basically, anyone going to UT and paying out of state tuition should do this to drastically reduce the cost of tuition alone.  

Hi Naveen,

Let me see if I can answer your questions.  

What is the prediction for these areas (Cedar Park or Round Rock).?? Did they already reach a point where further appreciation will be very slow.?? In the coming years, how is the job growth going to look like in the NW Austin.??  

****These cities continue to grow and job growth remains very strong for NW Austin and its Tech Corridor.  I think appreciation will show steady growth for a number of years to come.  

I do not want to spend beyond $250,000. I see that none of the new constructions are available in this price range(checked online and could not find any). So, I am open to buying old constructions. Ideally, I would also like the lot size to be bigger (>=0.25 acres). I see few such listings online. But I am not sure if there are any catches. So, is it possible to find good single family homes with big lots in my budget.?? (in a good location and good school district).

*****You can find good homes in Cedar Park that go to the very good Leander School district for under $250,000.  There are even a few with 1/4 acre or more lots although that limits you a bit.  As for new construction, you can find it just above that price point at about $260K.  

If I end up buying an old home, what will be the disadvantages.??

****** Sure, older homes come with more Cap Ex needs.  In other words, you need to replace things a lot sooner if they have not been replaced.  A home built in 20+ years ago (in say 1997) may be on its original AC and roof.  Both of which might need to be replaced soon.  A costly problem.  Where as you might buy and sell a new home before ever thinking of needing to replace anything major like that.  Now old homes do have some positives.  They usually have large mature trees in the neighborhood vs. new developments.  Many people like the look of that.  

How fast old constructions get rented in these areas.?? Will I ever end up in a situation where I can't find a renter for months.?? (from reading online, I found that houses in these areas get rented fast. Not sure if that applies only to new houses).

******  House get rented fast when they are priced right and don't rent fast when they are overpriced.  It is just that simple.  We are at 95% occupancy and if you price your place at market rate you should have no problem renting it.Any place that goes for months not rented is severely overpriced or has major things wrong with it.  

Can I also get suggestions/references for few local realtors who can help me find the house.?? (would be ideal if the realtor also deals with property management).

******* I don't think I am allowed to toot my own horn on this site even if asked... I am sure someone will PM you.

I agree with Michael P. Austin has a much better balanced economy with a big government sector as well.  Numbers are strong for both though.  Probably better areas in each city than others so make sure you do some research or have an investor focused Realtor help you find the best investment areas.

I think house hacking a duplex in Austin is one of the best possible ways to get started building a real estate portfolio. First, yes, forget about the idea of buying a duplex in Austin where you would actually want to live and have it hit 1% or cover the mortgage with just one side. But, buying a duplex in Austin in a good area with strong appreciation potential in between $300-$400K is a great move. Your assessment on the numbers is pretty accurate if the duplex is not identical units. I would say it typically looks more like $2500 PITI with you putting 5% down on a 3/2 on each side and renting out one side for $1300. When you leave in a year or so you can rent each side out for $1400. Not much cash flow but $20K-$40K in appreciation. Most will tell you not to bank on appreciation but Austin has 30 years of pretty much a constant stead flow of appreciation with no roller coaster rides or dips lasting more than 18 months or so....in 30 YEARS. With more and more companies moving here creating more and more jobs, I don't see a dip anytime soon.

Every economist studying Austin and putting out reports says Buy Now!  Prices will be going up.  Yes, in 5 years we may dip back a year or two's worth of appreciation but the bounce right back higher.  Either way, I don't believe prices will be this low again, especially with interest rates slowly climbing.  And for those people who say never buy under the 1% rule, you lost out on a lot of money here in Austin.  We are gaining 140 people a day, office space availability is the only thing limiting us at this point.  2.1 months of inventory and it is much less than that for homes under $250K.  Now is the time to buy.

PM me your email and I will send you all the 4 plex properties available.

Hi Bobby,

I actually live in Balcones Woods as well.  Small world.  A few things that both Ken and Brandon make note of are important.  First, Balcones Woods is a great neighborhood and probably one of the best in Austin for appreciation to continue with its proximity to the Domain, Tech Corridor, etc.  but for that reason, when you see very predictable appreciation you also see negative cash flow.  Our rents in the neighborhood won't cover the expenses unless you bought some 15+ years ago.  My suggestion would be, if you are looking at this from a monetary point of view, to sell the property using a 1031 exchange (since you have not lived in the house 2 years) to avoid the tax hit and buy either a home you wouldn't mind moving into or a duplex or another single family home in another area that would get you a lot more cash flow at the same expense or lower than you currently have.  Message me anytime to discuss in detail as I have bought and sold numerous homes in Balcones Woods for clients as well as myself.

Other than trying to find 1% in SFH's out here there really is nothing negative you can say about the market. We were just rated the #1 place to live. We have tons of job growth, and high paying jobs at that. A lack of inventory available to keep up with the 144 people moving here every day. Our prices are high for old Austinites but very low for all those Californians and New Yorkers moving here. I have a ton of BP clients from both coasts continuing to buy investment property here. The market is very strong and in my opinion will continue to be for a number of years to come. So yes, you may not be able to find the 1% rule in SFH's here but you can find it in some multi-family and there is no better place in the country as far as return on investment.