Austin is a great area to invest in right now. Your best bet is to find a local real estate agent who is experienced in working with investors. If you are willing to look outside of Austin for investment properties, the Dallas area is a great area for investment as well.
Your question depends greatly on how much you have to invest, what your investment objectives are, and how "hands on" you plan on being.
Most investors currently are looking for more than 10% return on investment. That means that if you pay $100,000 for an investment home, the rent should be over $1000 per month to cover your payment, taxes, and insurance. Depending on how much you actually have to put into the home, you could consider buying a foreclosure or depressed property and doing some repairs and updates on it.
Hands on is also a huge question. Do you plan on being the landlord or do you plan on using a property manager? A property manager is a good way to avoid those 3am calls about a stopped up toilet, but it also costs you money each month.
An example of an investment home that I have listed for sale in Dallas: Home for sale for $70,000. Monthly rents run $1100-$1250 per month, depending on updates. After taxes, insurance, and property management costs, you are looking at about a 15% return on investment. This scenario is fairly common in the Dallas area because rental prices have been on the rise for the past 2-3 years.
If you are interested in looking at the Dallas real estate market for your investments, feel free to give me a call. If you want an experienced agent who deals with investment property in Austin, I have a friend there that I would be happy to refer you.
Keller Williams Elite - Dallas, TX