Over the past 2-3 years or so, prices in Austin, Texas have been skyrocketing in many areas. As a result, I've seen many buyers wait too long to purchase, only to find that they are unable to qualify when they are ready to go. I helped two different young ladies earlier this year who were both in a very "affordable" price range ($135-140K) who both ended up having to rent again after rejecting homes that were less-than-perfect.
While I completely understood how they felt, I also tried to express that there is almost no risk involved with investing in a home priced at the lowest end of the local market, and it is almost invariably a better financial move than continuing to rent. The only exceptions that come to mind in this scenario:
1. The house is in atrocious condition, OR
2. You are planning to flip it quickly.
Otherwise, this is as close to a sure thing as you are likely to find with any investment scenario. Buy low, sell high(er). Right?
I'm not knocking these particular clients, because I understand that a first home purchase is daunting. However, I did try to impress this phrase on each of them:
"It might be a good idea to go ahead and buy, so that you can gain a foothold in this market."
What does this mean?
Well, if you're able to go ahead and purchase something in reasonable condition, you can always sell it later and you are likely to make money passively (i.e. just by holding it for awhile).
The real estate profession sometimes has a reputation for trying to make a quick buck, or for being dishonest or greedy (despite the fact that many full-time agents aren't really making great money). While I feel thankful and blessed that this business has been personally rewarding and lucrative for me, I would never counsel someone to make a purchase that I felt might be a bad idea.
If you're reading this, and you are considering making a foray into the Austin-area real estate market, I would love the opportunity to help you find the right place. Prices continue to increase while interest rates remain at historically low levels.
Thanks for reading!
Image credit: https://www.flickr.com/photos/druclimb/