All Forum Posts by: David Ivy

@Account Closed

The February 2018 Central Texas Housing Market Report is out from the Austin Board of REALTORS®. The Austin area housing market didn't care that February is typically a slow month. Home sales volume across the greater metro area grew in February. However, areas with the highest demand and lowest inventory experienced double-digit percent price jumps simultaneously coupled with declining sales activity. So, while all signs are pointing to another incredibly hot 2018 market in Austin, our old friends, affordability and inventory, will remain constraining forces. This is something the City of Austin will try to addressed via CodeNEXT.

According to Steve Crorey, 2018 president of the Austin Board of REALTORS®, "Last month, economists predicted an upwards of 5 percent growth in median home prices within the Austin area, and we have far surpassed that. This is especially evident in local markets where housing demand is strongest, such as Austin and Cedar Park. Home price increases are sharpest in these markets, while dwindling housing inventory in the lower price classes could be discouraging people from buying.”

Here are the basic stats on single-family home sales for February 2018 for the City of Austin and the greater Austin area:

About the local economy, Mark Sprague, state director of information capital for Independence Title, said, "While wages and jobs in the Austin area haven’t increased, the local economy remains strong and continues to attract new residents and potential homebuyers. This population growth is putting additional pressure on local housing markets with already critically low housing inventories, leading to sharp price increases that both homebuyers and new home developers cannot keep up with.”

@Dan D.

If you have interest in Texas, you can find broad state-level data relating to the Texas economy and housing market from the Real Estate Center at Texas A&M. You can find their latest Texas Housing Insight report here. They also provide more detailed regional and city information.

@Wayne Bolen

I'm based in Austin and have a fourplex in Killeen. I would be happy to talk about my experience with that property so far. For SFR in Killeen, I'd reach out to @Andrew Allen. I believe he still has a single-family rental there.

The January 2018 Central Texas Housing Market Report is out from the Austin Board of REALTORS®. Initial signs point to a strong housing market for 2018. Single-family home sales were up in January compared to this time last year, despite extremely tight housing inventory across the entire Austin-Round Rock MSA. The report highlights CodeNEXT, which just entered its third draft, and the fact that Austin's affordability and inventory challenges will continue to spur growth in Williamson and Hays counties through the suburban new home market.

According to Jim Gaines, the chief economist at the Real Estate Center at Texas A&M, “In 2018, Central Texas’ housing market will continue to see an increase in both sales and price, despite inventory levels remaining low. The housing demand and lack of inventory is so great, that if supply does not increase, we could see a upwards of 5 percent growth in median home prices within the Austin-Round Rock MSA. Inventory will be a determining factor in the direction of this year’s market [emphasis added].”

Here are the basic stats on single-family home sales for January 2018 for the City of Austin and the greater Austin area:

ABoR president, Steve Crorey, commented that, "More housing capacity is necessary to offset the aggressive price increases we’re seeing in and around the city of Austin. Getting CodeNEXT right gives Austin the opportunity to manage our growth responsibly by providing more diverse housing choices and more housing overall without sacrificing the unique character of our neighborhoods.”

@Mak Sharma

Welcome to BiggerPockets! What type of investment are looking to make? If you're interested in single-family homes, then it will be practically impossible to find anything in the greater Austin area, including Cedar Park and Round Rock, that meets the 1% rule. To get anywhere close, you'll need to find a good deal on a property that needs work. Unfortunately, everyone else is looking for these properties. Your best bet is to find an exclusive opportunity by marketing directly to distressed sellers yourself. Wholesalers also often get deals that are too thin for a flip, but they can make sense as a BRRR. However, people are buying pretty thin wholesale deals as flips at 80%+ percent of ARV in Austin. You can still get pretty close to the 1% rule on the occasional fourplex in Austin. Those properties will usually be in poor condition.

If your goal is merely to find something that cash flows while putting the least amount down as possible, then you can find occasional opportunities. These will still likely be very thin (e.g., a SFH that cash flows $100/mo.). It's just tough all around right now.

Here's some very general info. you may find useful:

• Over the past 90 days in Austin, the median SFH sold for $370,000, and median SFH rent was $1,795/mo.
• Over the past 90 days in Cedar Park, the median SFH sold for $296,000, and median SFH rent was $1,695/mo.
• Over the past 90 days in Round Rock, the SFH sold for $275,000, and median SFH rent was $1,600/mo.

@Jerimie Rodriguez

Welcome to BiggerPockets! Since you're based out of Kyle, you should check out the South Austin Real Estate Investor Group whenever you have time back in the States.

@Austin Joseph

You're describing a situation where someone leases a single apartment unit for $1,800/mo. (for example) and then makes income off the spread between the $1,800/mo. and the $3,000/mo. (for example) income from leasing the unit through AirBnB. Is that right?

If someone wants to do this all above-board, then renting out a unit in a commercial multifamily property (condos, apartments, etc.) in Austin requires a "Type 3" permit. In order to get this permit, the applicant needs to own the unit being used as a short-term rental: "Ownership information on your application must match the deed as recorded with the Travis County Clerk's office or Williamson County Clerk's office." However, that's not the case when someone merely leases an apartment unit. The lessee's name is not on the deed for the unit. The owner is the one who has to apply and sign the application. Therefore, as I understand it, the City of Austin does not allow the type of short-term rental you describe.

Note that this only applies to AirBnB-style rentals for periods of less than 30 consecutive days. As far as I know, if you always lease for 30+ days, then you're not covered by Austin's STR ordinance and don't need a permit or pay the associated city occupancy tax.

That said, I can't imagine any landlord or apartment owner being okay with the short-term AirBnB subleasing you describe, even if it's 30+ days. As a locator, you're familiar with the leases used by Austin area apartment communities. Typically, those that will allow a tenant to assign or sublet the lease to someone else require the landlord's written consent, over which they nearly always have 100% discretion. If it's not specifically forbidden in the lease, then I'd imagine they certainly would's forbid putting one of their units on AirBnB. Have you asked any apartment managers about this?

@James Borden

As a young person with health issues, you probably don't have much in savings. If not, then before putting a penny into real estate investment, I would figure out how much money you'd realistically need to cover your necessary expenses for 3-6 months and set that aside that portion of the $100k in an emergency fund account that will earn interest. I use Amex Personal Savings for my family's emergency fund, which is online and currently paying 1.35% APY. Also, before putting a penny into real estate investment, I'd take a portion of the $100k to pay off any high interest debt (10%+) that you have been carrying (e.g., credit cards). That's an easy way to get a guaranteed immediate high return on a portion of the inheritance. A lender may require that you pay that off anyway to qualify for a loan.

Once you have the 3-6 mo. emergency fund and paid off high interest debt, I'd personally probably be looking at paying off any moderate interest debt (4-5%+), opening an IRA, and setting aside a portion of what's left of the $100k to make max contributions for at least the next few years until I knew I could set aside enough income from my job yearly to make the contributions myself. Either way, you could also now think about using what's left as a down payment on your first property, which should probably be a single-family or duplex value-add house hack in Austin (or maybe a more affordable market). As you said, your current situation and work history will probably require an investment partner or someone to co-sign on the loan.

The December 2017 Central Texas Housing Market Report is out from the Austin Board of REALTORS®. It was another record-breaking year for total homes sold, beating 2016 by 2.4%. Home prices increased 5.4% in 2017 in the Austin-Round Rock MSA. In the city of Austin, the median price for single-family homes hit an all-time high at $362,000 annually, and sales increased by 2.5% over the same period. Despite breaking records, the Austin market consistently displayed signs of a turn toward normalization and an eventual end to the currently extreme seller's market. The new ABoR president, Steve Crorey, said that,

Here are the basic stats on single-family home sales for December 2017 for the City of Austin and the greater Austin area:

Inventory and affordability remain major constraints:

I'm incredibly excited to see what 2018 has in store for the Austin area market!