There are several options when considering the purchase of property for rental purposes. The most important consideration is what type of return do you require in order for the purchase to be profitable. Second to that is finding a property that is priced correctly for your needs and doesn't contain condition issues that could affect your ROI.
Of the properties that would be most likely to support an acceptable return on your investment (ROI) would be those that have financially distressed sellers (short sales) and foreclosures. Not all foreclosures are created equal. The HUD, FanneMae and FreddieMac properties have special incentives and considerations to owner/occupants to allow them the first opportunity to buy. An investor-buyer would have to wait for the requisite period of time to pass prior to being eligible to make an offer on these types of foreclosures. However, there are other foreclosures that don't have those requirements and being knowledgeable the properties that are exempt from the owner/occupant rule, knowing how to find those properties, and being prepared to make an offer in an expedient and proper manner is of utmost importance in presenting an acceptable and successful offer to purchase.
Additionally; as an investor there are different requirements for financing that need to be considered, if the investor isn't paying cash. There are different ways that investors establish funds for these purchases. There is the traditional loan process with a mortgage as an investor, and for those that have significant financial backing, the use of "hard money" is a great advantage. These are a couple of the avenues to be explored when considering financing.
The Cedar Park and Leander area currently are stable. Cedar Park has experienced a slight upswing in values of 5% - 25% vs. in June 2012 vs. June 2013. Leander has remained stable, with a 0% - 5% increase in values for June 2012 vs. June 2013. This is important to an investor when making a purchase as the market trends can make or break an investment.
Again, not just the purchase price of a property is important. Knowledge of how housing has been affected by the economy and the effect that this has on rents needs to be examined. Currently there is an active leasing market, which is evidenced by increasing rents throughout the north central Texas area. Knowing what the market is within the individual "pockets" is important as not all areas respond evenly. This calculation of rental income, cost of the purchase money, cost to maintain the property (taxes, HOA, repairs, leasing fees, vacancies, etc...) and personal time are part of the equation for the "net" that a rental property will provide.
In my opinion; The Cedar Park area is a great area to be considering for investment property at this time. Use of careful and calculated consideration will increase the opportunity for a secure and successful investment.
Anne Schramm, Broker
GRI, TAHS, CNE
TREC LIC# 465302
Realtor -- Owner
Dominion Estate Network Realty