The Austin market is SMOKING HOT right now. With both coasts taking a 40%-60% hit in values, investors are pouring in to Austin. To that end, I thought some general education about our market would be appropriate.
1. What's the play? Buy and hold, fix and flip, cash flow?
Austin's rental rates have not increased nearly as dramatically as have home values. In investor terms, that means you're going to need a big downpayment if you hope to cash flow at all. Think in terms of 30% + most of the time. Although, I did come across some fourplexes last week that were cashflowing with zero down. They're pretty few and far between.
On the other hand, if you can hold a property and bank on appreciation, you're in a great spot. Many central Austin neighborhoods are experiencing double digit appreciation, so this is a great strategy, if you have the cash for it.
2. I really want to flip!
Okay, there is opportunity here too, just not as many. We come across a good deal about once every week or two. We come across a great deal about once a month and an OH MY GOD deal about once a quarter. When we tell you about these, bring your checkbook because they will NOT last long. You'd better be out there the DAY we tell you about it if you have any hope of getting the property. Remember, not many of these opportunities exist and there are a lot of people that want them. So, be prepared to drop everything when we send out an investor alert!
3. What part of town do I want to be in?
The closer to downtown and UT that you can get, the better off you're going to be. You'll get better tenants, higher occupancy rates and a constant stream of people who want to buy your home when it's time to sell.
Maxwell McDaniel
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