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All Forum Posts by: Mike B.

Mike B. has started 15 posts and replied 53 times.

Post: Austin Rents are On the Rise

Mike B.Posted
  • Homeowner
  • Leander, TX
  • Posts 53
  • Votes 25

We turned our first home into a rental 

Post: New Austin Landloard - What to do now?

Mike B.Posted
  • Homeowner
  • Leander, TX
  • Posts 53
  • Votes 25

@Marian Smith I love all the feedback. 

You are right. For now, I'm going to focus on becoming a professional landlord and do well with the 1st rental house. I want to be sure we are running the 1st house like a business and build some experience. The most important thing is we have taken that first step and we are learning.   

Post: New Austin Landloard - What to do now?

Mike B.Posted
  • Homeowner
  • Leander, TX
  • Posts 53
  • Votes 25

@Marian Smith Our retirement savings should be good enough. We plan for rental property income to supplement our normal retirement and then just want to leave a nice inheritance to our kids. Based on the comments to this post, I think our original plan is probably the best path forward for my family. Work to increase w-2 income and then buy another rental in either the liberty hill, Georgetown, or Leander areas. 


Ideally, I want to avoid a cash-out refinance. It's nice to have the cash flow and I'm not really comfortable with multiple mortgages. I'd rather take my time and do this slowly. 

Post: New Austin Landloard - What to do now?

Mike B.Posted
  • Homeowner
  • Leander, TX
  • Posts 53
  • Votes 25

@Herly C. Normally, I make the best decisions when I listen to my wife. ;-) 

Post: New Austin Landloard - What to do now?

Mike B.Posted
  • Homeowner
  • Leander, TX
  • Posts 53
  • Votes 25

@Joshua Noth

I like the Highway 29 and Ronald Regan area between Georgetown and Liberty Hill. If I were in a financial position to buy right now, I would go for another home in one of these areas. They are all close to the train station and within commute times to the new Apple campus. 

  1. Bluffview, Santa Rita Ranch, Rancho Sienna, Morningstar, Larkspur, Bryson, Bar W Ranch, Deerbrook, Orchard Ridge, Palmera Ridge, or the Oaks at San Gabriel. 

These neighborhoods are just so far away from the city center that I'm concerned about investing more money this far out. Also, I think it's too hard to find any lots and if even if I can the only one of these neighborhoods that can cashflow (at 20% down) is Santa Rita Ranch. 

Stonewall Ranch in Liberty Hill is another newly built neighborhood that has low prices. It seems really far away until you consider Highway 183 is set for expansion later this year. Once the highway is finished it will end right next to this neighborhood and that'll make for a super easy commute into north Austin. Even now their list prices are sub 300K. I just don't like that there is some sort of light industrial buildings nearby.

Post: New Austin Landloard - What to do now?

Mike B.Posted
  • Homeowner
  • Leander, TX
  • Posts 53
  • Votes 25

@David Peskind @Blaine Alger

Thanks for the feedback. My pan is to just work on my W-2 career for now, learn more about being a landlord, and get ready to buy another house in a couple of years.

Our goal is humble. We really just want enough cash flow so that we never get taxed out of the Austin market. Also, we want to retire someday and when we die it would be nice to leave assets for our kids. I think 3 properties would accomplish our goals.

The wife and I both come from poverty. To think we built about $650,000 in equity since 2014 blows my mind.

Post: New Austin Landloard - What to do now?

Mike B.Posted
  • Homeowner
  • Leander, TX
  • Posts 53
  • Votes 25

I should also say, that property taxes are 2.9% in the area. Once the county tax appraisal catches up with the new market prices, we are going to pay between 8-12K a year in property taxes on our rental.  

Post: New Austin Landloard - What to do now?

Mike B.Posted
  • Homeowner
  • Leander, TX
  • Posts 53
  • Votes 25

My wife and I got married and move to the Austin suburbs back in 2017. Right away she started pressuring me to buy my first house, so we drove out to Leander and picked up a new build for $230,000. It was the FIRST house in a new master planned community nearby the Leander transit oriented development. That is the Austin metro rail.

She sold her former home (purchased in 2014) soon after we moved in and pocketed $200,000 in cash.

So in July 2020 we decided to use that money and become landlords. We built a 2nd home in the same area. The 2nd home is in the same master planned community and cost us just $314,000.

We have been shocked at the rapid price increases in our neighborhood.

House #1 = 1700sf

Contract price in 2017 = $230,000

Builder base price in 2021 = $451,990

House #2 = 2800sf

Contract price in 2020 = $314,000

Builder base price in 2021 = $489,990

We currently have house #1 rented below market at $1800/month and believe the actual market rate is $1900. Our estimate is based on other professionally managed rentals in the neighborhood.

My question is really what now? My income is kinda low (75k year) for Austin, so more mortgage debt is out of the question for at least two years. I need to get my career back on track first.

If the 1st property is actually worth $451,990 and it only rents for $1900 then we aren’t making much return on our cash. It’s completely paid off and that’s a lot of cash for a middle class family. The 2nd house has a $300,000 mortgage that we could payoff with those funds. However, the wife and I are 100% in agreement that we want rental property.

Thoughts and advice please....

Post: Housewarming gift for new tenants?

Mike B.Posted
  • Homeowner
  • Leander, TX
  • Posts 53
  • Votes 25

I’ll go to target and get them a shower curtain, bath & dish towel, toilet paper, some soap, and pizza gift card.

They are moving from out of town and I imagine that’ll help get them settled the first day.

We close on our news house in mid April and I’m wanting land-lording to workout well for us.

I started construction before the prices started running up in this area, so we can potentially turn our new house into a rental and cash flow it.

But, before we go on and get a 3rd house, I want to see how this goes with our first tenant.

Post: Tax Question - Converting Primary Home to Rental

Mike B.Posted
  • Homeowner
  • Leander, TX
  • Posts 53
  • Votes 25

@Michelle Gerac That makes sense to me. At least I can deduct some expenses. :-)

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