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Old 04-25-2015, 06:52 PM
 
75 posts, read 72,717 times
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After some consideration, DH and I are thinking of buying a small house in central Austin and moving out to the suburbs after we have kids and they are ready to start school. We are in our early 30's and want to start a family in the next year. That means we would probably hold the house for 4- 5 years, or possibly longterm if it's possible to rent later. We want to stay around $350k give or take. We found several homes in our budget in the North Loop neighborhood. Our plan is to buy a house that needs some cosmetic updating like kitchen and bathroom finishes and landscaping and do those while living in the house. We are looking for a 2/2 or a 3/2 1500 square feet and under. I saw that the neighborhood increased tremendously in the last year. Driving through, we saw a lot of houses under renovation but also many that haven't been yet. It's definitely not a polished as Hyde Park, for example, but we like the funky vintage style of the home and think the size of the home makes sense for our plans to renovate. It's a lot easier and less expensive to renovate a small kitchen than a large one. While we can definitely get more house for our money in other parts of town, we like the idea of a smaller house with less money spent on bills, upkeep, cleaning, etc. Does anyone have any thoughts on North Loop? Are we too late to buy there?
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Old 04-25-2015, 09:42 PM
 
Location: Austin, TX
171 posts, read 158,032 times
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North Loop has some great access to areas nearby (Brentwood, Rosedale, Allendale) and is a good jumping point to head both north and south. You can definitely find what you're looking for there and it certainly looks to be on the upswing. I sold a condo in Brentwood (3/2.5, 2,200 sq ft. that really lived like a single family residence) in less than two weeks. Stuff that is priced properly sells pretty darn quick. If it's been on the market for a while, odds are it remains overpriced.
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Old 04-25-2015, 09:50 PM
 
Location: Lancaster, PA
909 posts, read 931,301 times
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Hot, hot, hot, area. Rated #1 a while back in Austin Monthly as you might know.

I'd expand your search a little outside that area, maybe more upside.
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Old 04-25-2015, 10:09 PM
 
Location: Austin, TX
7,183 posts, read 16,272,425 times
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If you like the neighborhood, and you find something you like and can afford in the area, how could it be "too late?" Seems to me the only situation where it's too late is when you can no longer afford to buy something in the area you want. If you are looking at buying a small 2 or 3 bedroom and fixing it up in North Loop, chances are others are looking at that too. So they eventually get bought up, fixed up, and then no small 2-3 bedroom fixers are available anymore. Or they become so rare that they become super expensive, even as fixers. And that is when you are too late.

Now, will prices soften in 4-5 years? Maybe. But if that happens, it's likely to be the whole metro which slows down... So you'd probably be in the same boat wherever you bought.

Just buy where you want to actually live, and the rest will work out.
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Old 04-26-2015, 08:09 AM
 
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I guess my only concern is, if we need to sell it in 5 years due to buying another house, are we going to take a loss on it? We are hoping to hold long term but you never really know.
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Old 04-26-2015, 08:49 AM
 
Location: The People's Republic of Austin
5,184 posts, read 5,740,935 times
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Quote:
Originally Posted by emeraldcitymer View Post
I guess my only concern is, if we need to sell it in 5 years due to buying another house, are we going to take a loss on it? We are hoping to hold long term but you never really know.
You need to think about the transaction costs on both ends. Loan fees at the start, realtor fees on the back end. You may not take a loss, but you definitely might eat up much of your appreciation. Five years is a short horizon, even in as hot a market as Austin. If you keep it as a rental, your down and equity are largely buried when you could need it for your kid raising home.

Had you thought about buying the kid friendly house now, and renting it out until you are ready? Maybe rent in N Loop until then?
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Old 04-26-2015, 08:51 AM
 
1,509 posts, read 1,401,383 times
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Quote:
Originally Posted by emeraldcitymer View Post
I guess my only concern is, if we need to sell it in 5 years due to buying another house, are we going to take a loss on it? We are hoping to hold long term but you never really know.
It's real estate. There is always that risk, especially in a bubble like we're having now.
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Old 04-26-2015, 11:02 AM
 
Location: central Austin
7,151 posts, read 13,086,371 times
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shoot! North Loop tracks to McCallum, one of the best HS in AISD, the TOP ranked school for musical education in the entire country by the Grammy Foundation. Decamp to the suburbs for whatever reason you want but the schools available to you in N. Loop should not be one of them.
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Old 04-26-2015, 11:43 AM
 
75 posts, read 72,717 times
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Originally Posted by centralaustinite View Post
shoot! North Loop tracks to McCallum, one of the best HS in AISD, the TOP ranked school for musical education in the entire country by the Grammy Foundation. Decamp to the suburbs for whatever reason you want but the schools available to you in N. Loop should not be one of them.

Who knows? Maybe we will stay central when the time comes to "move to the suburbs" .. Our "kids" aren't born yet, lol. We had originally wanted to buy a larger house out in LTISD but are thinking of buying a less expensive smaller house in the city for a few years for a few reasons.

Anyone want to weigh in what living in a 1250 square house is like with two young kids (what we hope to have) and two dogs? We will definitely upgrade size at least in a few years, whether we stay central or not. Our rent is affordable to us now and if we get into a mortgage in central austin I would like to keep our rent around the same amount or PITI of under $2000. We pay about 1950 with all household bills now, including cable, water and electricity.
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Old 04-26-2015, 11:49 AM
 
75 posts, read 72,717 times
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Quote:
Originally Posted by scm53 View Post
You need to think about the transaction costs on both ends. Loan fees at the start, realtor fees on the back end. You may not take a loss, but you definitely might eat up much of your appreciation. Five years is a short horizon, even in as hot a market as Austin. If you keep it as a rental, your down and equity are largely buried when you could need it for your kid raising home.

Had you thought about buying the kid friendly house now, and renting it out until you are ready? Maybe rent in N Loop until then?
There's a whole bunch of reasons why I don't think we want to buy the house in the suburbs for the purpose of renting out right now. One, I think it would be more difficult to rent out because it's a community where people mostly buy. Two, I don't want to throw a lot of money in furnishing or upkeep of a large house. It's also going to be more expensive than 350k from what I'm seeing. I definitely have those same concerns about the down payment and equity being buried when we might need it in 5 years, especially if we decide to hold or buy. Our combined incomes are enough that I think we would be fine getting financing for a second home if we hold, but I certainly don't think we can afford to hold unless we have consistent renters in there and plenty of cash for repairs and for periods of time we don't have a renter in there and are paying 2 mortgages.
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