The rental market is strong right now and I see no reason that it will let up anytime soon. Priced right, leases are being snapped up quickly in the Metro. Ttype of property makes little difference in it's rentability (if that's a word). The difference comes with cash flow, stability, holding costs, appreciation to name a few. As with all property the top 3 factors are Location, Location & Location. You will make the most money "when you buy" not from the monthly rent.
You need to approach this as a business process, not emotional. If you need it, seek advice and assistance from a Realtor. If you need a Realtor interview as many as it takes to find one you can work with and trust as an advisor. Critical decissions need to be made before the purchase so there is a clear path from this point all the way through your intended exit strategy.
An old saying comes to mind. If you don't know where you are going any raod can get you there.
If you'd like to interview me contact me directly. Call ~ Text ~ Email ~ I respond quickly.
Bill ~ 512-709-6343 ~ email@example.com
Care ~ Communication ~ Experience
I have lived in Austin for over 20 years and have been in the real estate business for the last 10 years and
I have never seen the rental business so strong. There just isn't any rental inventory out there right now.
Most of this has been caused because of the mortgage lender's underwriting guidelines. It is MUCH MORE
difficult to qualify for a home loan today, than it did 5 years.ago. In addition, Forbes Magazine ranked the Ausitn area as the biggest boom town, in the US, for the next 10 years. This means, more and more people will be moving into Austin and the surrounding areas in the next several years. This all means that more and
more prospective tenants will be in the market for a rental property. Yes, it is a great time to purchase an investment property in the Austin area. Need help??? Feel free to contact me at 512-554-3749 or via e-mail
Hope that helps!
While the downtown condos seem to draw a younger crowd, its a safe bet on a single family home. THere are a number of hot rental areas to consider. Homes are pretty easy to rent if you have good schools and a good location.
I would highly recommend Single Family Homes. You can find foreclosures and short sales in Austin that don't need that much work. If you're willing to invest in a little cosmetic fix up work, you can really make your money work for you. I've shown several houses to clients lately that would be great candidates. My advice would be to stay in the price point that attracts first time home buyers. That way when you go to sell there will always be a large potential market. Call or email me to talk more.
Keller Williams Realty
Please feel free to contact me anytime if you would like detailed analysis on a home, neighborhood, or area. With the peak selling season winding down, there is a real nice opportunity to negotiate great deals.
Single Family Homes lease the best. Have the best opportunity for increase in value and have a larger pool of buyers to sell to later. Select a 3 bedroom/2bath home in a good school district. Be aware of mandatory homeowners dues - if in the right area with community amenities such as pool, trails, etc. those can be an asset if the property is purchased at the right price.
As the other answers have indicated Condos Home Owners Association (HOA) dues can be quite high (as much as several hundred dollars a month!) but do cover exterior maintenance including the roofs. Townhome HOA dues will typically cover less (homeowners are usually required to maintain their own roofs and exterior), usually limited to common area maintenance & insurance (such as front yard watering and pool/tennis court maintenance).
The lease market is very strong in the Austin area now and will most likely continue for the foreseeable future as the economy sputters along. Mortgages are tougher to obtain and many families are forced to rent.
To have the best investment potential you must buy the right property at the right price. And you have to look at the other rentals in the area to know the competition. Rentals for families in the $1000 - $1200 range currently have strong demand but I do manage a property leasing for $1600 and have multiple rental applications and always stay leased - no rental gaps in the last 3 years.
I offer a full compliment of services. Please feel free to contact me with any questions or if I can be of further service.
And no, you won't find 1200 sqft house in Austin for 60k that brings $750-$850 per mth.
You obviousy haven't hired a good realtor to help you. Make that move now. It shouldn't cost you a penny, and if you hear otherwise, just call me, I'll make it happen for you.
Reason being to hire a realtor, he/she will go over your investment goals and point you in the right direction.
Condos rarely work well due to the HOA dues.
Townhome can sometimes work.
What is better is typically single family homes with rent no more than about $1200/month.
We need to get you set up with one of our investment specialist to give you a list of potential areas and homes that you might consider.
If you have more questions, feel free to contact me.
Cynthia Mattiza, JBGOODWIN REALTORS
#1 Leasing Agent in Company 2011
I've owned & managed rental property since 1978 located here in Austin, also in Houston, Tomball and Cypress. Owning rental property is not for everyone as you get to hear about everyone else's problems, especially when it comes to paying the rent. You have to be compassionate, but very firm. "It's a business."
Single family properties to get started. Duplex or 4-plex are also good as you have multiple sources of income. Townhomes or condos last, just because of the monthly homeowners association (HOA) fee, which you have no control over, unless you own several units and are on their board. Yes, the HOA fees and other expenses are considered deductible, but they eat up your net income each month just as taxes, property insurance and maintenance items do. Unless you have an exceptional townhouse or condo that will justify a premium lease rate, I would start with those properties without the monthly dues.
Call or email me if you have additional questions.
I bought an investment property myself a year ago. It is a condo in the Avery Ranch subdivision. I knew that I would have no problem finding a tenant because of location and I rented it out in a couple of weeks. Yes, the condo fee is $175/mo and the property tax is quite high, but all these expenses are write-offs for an investment property as is anything else related to it (if you use a broker to lease it, the fee is also tax deductible). For $180K, you can buy a good property of whatever kind in a good location. In my opinion, location is very important because the better it is, the more you can charge in rent and the better quality of tenant you will get and it will also appreciate better over time. Of course, take into consideration everything that the was said by my colleagues in the previous answers, they are giving excellent advice.
I would like to help you buy your investment property, we can look at all possibilities available in your price range. Contact me if you need help.
Tenant stability is important to your long term goals (the ability to reduce turnover). Historically, tenants in single family residential homes are more stable than those in condos or townhomes. Land appreciates, buildings depreciate (both financially and physically), this tends to favor single family residential homes. Condos and townhomes require HOA dues, which are typically very hefty, but this monthly expense essentially eliminates any costs you might incur for external maintenance and upkeep, compared to single family homes, where you're required to pay for all external maintenance and repairs. Finally, for condos and townhomes, be very careful to scrutinize the HOAs past expenses and current reserves. The last thing you can afford is for an HOA to require a large special assessment to pay for capital improvement they did not foresee (a roof on a lowrise building could cost you $5K to $10K or more per unit).
In the end, look at historical rental rates for similar property types, compared against your carrying costs and your own reserves for vacancy, maintenance, and management fees. A simple, quick analysis to weed out many poorly performing properties is whether or not you can rent out the property for .8% to 1% of the purchase price. But the actual calculations for profitability are more complicated than this.
If you're looking for representation, feel free to give me a call. I can put you in touch with several investors who would be more than happy to share best practices.
Texas Capital Properties
If you price your rental rates properly, you can rent any product out quickly. As an investor, what you should consider is the expected turnover of tenants and the net investment returns with each property type. For that level of analysis, you should work with a local realtor who's familiar with investment properties. It's not something that can be readily answered on a forum like this.