Real Estate Investment

[loves2read]

posted did same thing on dallas board--thought multiple posts were not allowed

[austin-steve]

It's a very risky market because Texas goes on forever and there's nothing to hold value up here. In other words, there's too much land, too few laws, too little uniqueness. It's safer to invest in places that have built-in scarcity

I think Austin does have scarcity, in the western Travis County area. Land is expensive to buy and develop there, which drives prices up.

What you say about sprawl will happen, I believe, heading east of Austin where there is plenty of open flat farmland stretching all the way to Houston. Northwest up 183 and north past Georgetown and South to San Marcos also. But heading west won't be cheap.
Steve

[AllAroundAustinRES]

First of all are you looking for a bargain that you need to fix up in an established neighborhood or are you looking for a newly constructed home in a fairly new area? They both have benefits and downfalls.

How long will you be holding on to the home? Do you plan on selling it in 2 years or 10 years? How much do you plan on putting down? In order to cover the mortage you will at least have to come up with 20% or more.
These questions are important. There are wonderful areas of Austin. Of course the closer you get to the city, the more expensive they become. How much are you willing to pay to be on a bus route?

Austin has a very slight chance of exploding like the California market so if you are looking for a large fast return this might not be your first choice. The market as a whole in Austin has grown an average of 11% over the past year according to PMI magazine. What you probably can expect is a nice gradual increase over many years. A little safer I think.

I have seen numerous dreamers from California come out here and buy an "investment home," from a new home builder. Only to notice 4 months or more down the road that home is still sitting vacant. Guess who is paying the mortgage...the investor. The builders will give away the farm on a SPEC home that has been on the ground for months, which in turn drives down the value of the neighborhood and the homes. When you go to sell you owe just as much as you bought it for 5 years ago.

On the flip side, it looks like the builders are starting to catch on and cut inventory to drive up home sales, prices and the resale market. We weren't as luck as California & Nevada when it came to regulating how many homes were allowable per year for builders. There is a lot of land in Texas.

If you have the money to spend and you are looking to diversify or maybe move into your home in Austin one day then start doing research now.
The successful investors know that it is all about location, location, location.

[fil]

Originally Posted by austin-steve

I think Austin does have scarcity, in the western Travis County area. Land is expensive to buy and develop there, which drives prices up.

But heading west won't be cheap.
Steve

Will you share any zip codes?

I'm in 78750 and I know that I paid top dollar, but appreciation is high and ADM is low.

[TheHarvester]

Originally Posted by austin-steve

I think Austin does have scarcity, in the western Travis County area. Land is expensive to buy and develop there, which drives prices up.

I agree, there are special strategic locations that have unique natural beauty and convenient proximity to the city and other amenities. Those areas will tend to hold value well, as long as regulations prevent too much sprawl and destruction of the beauty people seek in the hill country.

I also think, for investment purposes, the area will grow a lot to the west, all the way from Brownwood and Stephenville down to Uvalde. It's the most beautiful part of Texas and it's got the best climate in the state, a nice balance between the dry west and the humid east, with interesting topography and clean waterways. But will the development enhance or destroy the region? Only time will tell. The laissez-faire policies of Texas don't bode well for preservation of natural beauty and resources.