Market Conditions in Austin>Question Details

Charlie, Home Buyer in Nevada

I own a home in Las Vegas, NV. Purchased 4 1/2 years ago at $170,000. It went to $300,000 and has now dropped

Asked by Charlie, Nevada Sat Jan 19, 2008

to $250,000. If I relocate to the Austin/Buda, Tx. I would purchase a home to live in and rent out the home in Vegas in hopes property values rise again. On the other hand if I sell I'm still 50% up, would purchase a home in Austin/Buda to live and could purchase 2nd home there to rent out since the market is better. Any thoughts and opinions appreciated. I have 50% equity.

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Dear Charlie,
I have the home for you in Kyle! i just held open a lovely one story 3-2-2 in Kyle close to the new hospital. It is brand new construction with many upgrades (stained concrete floors, high ceilings rounded corners,recessed lighting, totally finished out garage and more) found in custom homes and its only $172,500!! This area is booming due to Cabelas and the new Seton Hospital. Now is a great time to buy!
0 votes Thank Flag Link Mon Oct 5, 2009
Cash out and sell the house in LV and buy another place in Austin. Try forest creek, it's cash flowing.
0 votes Thank Flag Link Wed Mar 12, 2008
Charle, you must own the house next to mine in Vegas! I also bought a house 4 years ago,and saw appreciation go to $300K as well, but even though the prices have come down again, the rents have increased since I first leased out my house. Management companies are competitive , and some charge as little as 5% of gross rents if you want to hang on to the house. My rental house is now getting more rental income than I had 4 years ago, and there is a ton of homes for sale, but not everyone can still qualify for the homes that are on the market. Texas property taxes are higher than they are in Nevada, so you need to look at all those numbers more carefully if you are looking to relocate. If you sell the house in Vegas you could still wait some time. I am holding mine for a couple of years longer now myself. Good Luck. I would like to hear how it turns out.
0 votes Thank Flag Link Wed Mar 12, 2008
A wise sage told me once that "No one ever went broke by taking a profit." I can only answer your questions with what I would do. It's my understanding that the market is very tough in Vegas. There has been a TON of speculation there, which helped create a bubble. I have no idea if that bubble will swell up again, but it sure reminds me of the stock market when tech stocks were going through the roof. Remember how everyone thought they would make a good day trader back then? Alan Greenspan called it "irrational exuberance." After the stock market crashed, good old fashioned wisdom returned, and people have made money in the market again (this last month notwithstanding). Have all the speculators learned that lesson in Vegas? I don't know. But what I DO know is that you've said you're ahead. And I also know that Austin and surrounding areas are appreciating, have strong job growth, and a quality lifestyle. If I didn't have family ties or something else keeping me in Vegas, I'd absolutely consider a move to Texas. You can get out and still walk away with a handsome profit, and still buy a nice home here with the equity you'll pull out.
0 votes Thank Flag Link Wed Mar 12, 2008
Idealy I would say sell and run but how long is it going to take to sell that home. I do not now the exact situation you are in but I am sure alot of other people in your area are doing the same thing. I would have a plan to do both, if it sells great, if it does not still make it profitable. In todays market it does not hurt to be flexable and make the situation good for yourself regardless. I know it is easier said than done but do the best you can with what you have.
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0 votes Thank Flag Link Thu Jan 31, 2008
Charlie, don't be greedy! Like the song says, take the money and run! Some will tell you to hold on and rent, but Lisa said it best, you can't see that far! Also, if you wait for the appreciation to reach $300k, you may be waiting a long time due to the high inventory left in Nevada after the forclosure fiasco. You're coming to Austin or Buda sounds like a good move. Heck you can buy a small 95k condo near UT and cashflow that forever! Do keep in mind that the average tax rate in Austin is 2.7 percent, which is higher than the national average.
0 votes Thank Flag Link Fri Jan 25, 2008
take your profit and come to texas -- leverage your money here on several properties -- have your cake and eat it too!
0 votes Thank Flag Link Mon Jan 21, 2008
Okay, you asked for my thoughts...if you refi and your payments are appx $1350 per month including taxes and insurance, your rental income is $1200 per month (I went with the higher number) less $120 per month to a property management company, that lea\/es you with a net loss each month of $270 which doesn't seem too multiply that times 12 months making it a $3240 a year loss. You also ha\/e to figure in that you are probably only going to hae a 12 month lease and each time you re-let it you will ha\/e to do repairs and make let's say $1000 to get it cleaned, painted, and repaired. Then you ha\/e to find another tenant...hopefully through a professional real estate agent....and that may take a month or two so you just took another hit. You said you are just getting your feet wet...but even at that the market there would ha\/e to increase 20% in order for you to recapture the $50K recent loss in property \/alue. How long with that take? Niether of us can answer that question...but I will say this...if you take the equity and re-in\/est probably can re-capture that $50K in a much shorter time. All you ha\/e to do is look at the growth rate here and you shouldn't ha\/e to ponder it too much. Off the top of my head, I can't think of any of the Austin Metroplex that hasn't shown an increase in the last few's been amazing!
0 votes Thank Flag Link Sun Jan 20, 2008
Personally, I would sell the house in Vegas. How are you going to be a long distance landlord? As it is you have a profit. I know you think you "lost" 50,000, but you never had it. You still have a nice return, sell it. Buy an investment home where you're moving, if you want to be a landlord. YOu may wait a loooong time till prices go up. They haven't hit bottom here, I doubt they've hit bottom in Vegas.
0 votes Thank Flag Link Sun Jan 20, 2008
Hi Lisa, thank you for your answer. If I refi at 80%. borrowing 200k against the 250k. I estimate monthly payments of $1350.00 including tax and Insurance. Rent would be $1100-1200 with 10% to property managment. I could take a small loss each month (If prudent, (still learning) . Would either sell with the 20% rise, or keep longer if things go well. Thoughts?
0 votes Thank Flag Link Sun Jan 20, 2008
Thank you for your answers thus far! Would love to hear opinion from Dena Davis and Jay Otto as well. To answer's Bruce's question, I've checked and feel it would bring $1100-1200 month rent with 10% going to a property management company. Insurance now is $425.00 annual. Taxes now are under $1800.00 annual. Property tax increases had to be somewhat capped due to high increase in values from 2001-200-2006. I would imagine both would rise as a rental.

Investor? If you mean in the sense of holding onto to this property for the long term, I'd say no. I'd probably sell once it climbs 20% back to the 300k. Would I invest in the same property today as a rental? No, I don't think so. To be honest, I am fairly ignorant when it comes to real estate investing. My ideal scenario I think would be to own a home to live in and maybe have a rental property or two? Just to try to build a little wealth for the future.

I am thinking if I rent it, I would refi as owner occupied (at this time would be near or same interest rate). 80% of $250k would be $200k. Pay off the $125k note. Next step would be purchase a home in Austin/Buda to live in, then go from there.

I think Dena Davis mentioned 20% down for an investment property rather than little or now down, I would love to hear the rationale. How do I determine a good investment property numbers wise. ie purchase price, down payment, expenses and rent receipts etc? Just looking for rough numbers.
0 votes Thank Flag Link Sun Jan 20, 2008

Without a moment's hesitation, I would recommend that your sell your Las Vegas property and pocket the profit. Relocate happily to the Austin area and reinvest the money. It is a college and high tech town, and your rental property should do well.

It is also wise to have investment property which you can manage easily.

Good wishes!

Roberta Murphy
0 votes Thank Flag Link Sat Jan 19, 2008
Roberta Murp…, Real Estate Pro in Carlsbad, CA
What can you rent it for?
Do you want to be an investor?
Would you buy the same house as an investment if you didn't have the past info?
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0 votes Thank Flag Link Sat Jan 19, 2008
Bruce Lynn, Real Estate Pro in Coppell, TX
I would sell the home there and purchase a second home for rental property here. Our market is better and you can start building your equity again rather than sit and wait for the market there to swing. Things to consider, it is much easier to manage a rental property close to your primary residence...should that be a factor in your decision. If you kept the home there, would you have to pay a property management company and how much would your return on investment be? Are you going to be able to rent it and come out even or take a loss each month until the market swings up again? Things are good here, why wait?
0 votes Thank Flag Link Sat Jan 19, 2008
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