Buying a house right now in Austin vs Buying a house in 4 years (China: broker, landlord)

[IC_deLight]

1. The house you are looking at now may not be the house you want in 4-5 years.
2. No one ever thinks the market will slow down or crash - and yet it has several times since the 80s.
3. Even more importantly (as someone has suggested above) the local conditions may impact your ability to buy or sell 4-5 years down the line,
4. Living in the Bay Area is pretty expensive. Maintaining two places is pretty expensive. Maybe you and your wife have sufficient resources to do that. But the folks that have those resources aren't the type to ask anonymous individuals on a forum for financial advice.
5. Trying to carry two places in the event of another economic bubble can create a lot of stress on a family. Financial stress has been the cause of a lot of family strife and divorce.

[DCtoTejas]

Great points IC_deLight. While the Austin market has been a fantastic investment for many years, the old statement "past performance does not predict future results" will always hold true. A lot can happen in 4 years in both a macro and micro sense. You could make a mint, break even, or get underwater if the market crashes. The house could burn down, be hit by a tornado or a flood, or have a poor tenant destroy it. Or you could get the best tenants possible and do nothing but collect rent payments from the same people for 4 straight years. Point is, what are YOU comfortable with? Do you really want to be an out of town land lord - essentially a secondary job even if it ends up being a minor one? Only you can answer these questions.

[oldtoiletsmkgdflrpots]

If you want to buy a house now do it. If you want to rent it out and leave the responsibility to the rental agency then do it. If you want to take a risk then take a risk. I don't know what else to say to your questions other than if you get a divorce over having two houses then I'm guessing there is more to the story than the stress of having two houses.

[oldoak2000]

besides what's already been mentioned, consider this; look for a property that has amazing land/yard, and solid older house that's not been already 'updated' ('facade' wise) - should be able to find for like 75% or less of your 'budget'. Live in it as-is for a year, then rent it out (without spending big $ on updates); basic maintenance & painting ok.
THEN, in 4 or 5 years, when you are ready to come back and stay, NOW put your 25% or so into the updates (so they can be enjoyed NEW by you, and not destroyed by renters). Win Win !

With all the people flocking in to Texas - LAND is going to continue to skyrocket (at least anything within 2hrs of any major metroplex); the above plan will let you lock-in your LAND of the residence NOW at todays prices, be a fairly low-risk to carry (not worrying that your new carpet destroyed, granite counters ruined, etc etc), AND provide you a house to fix-up when you are ready to be in it long-term. 4 years from now the land alone will probably cost what you could have got earlier.

[MrCurmudgeon]

Originally Posted by akslp2080

@riaelise,
Do you think after 4-5 years that I would get a 3 bed and 3 bath house in Austin for 400K (NW austin or the 4 points Area/ River Place Blvd). Asking for your opinion.

My gut feeling is that looking at the way houses are being built and sold for past 5 years (5 years back, Lakeline Mall area was supposed to be far AFAIK while now a house there seems affordable). Right now leander/Cedar Park and Round Rock seems far but maybe 5 years down the line people want to move there because there are no more affordable houses in Austin.

Hence, I want to avoid this scenario later. What do you think?

No one can tell you what prices will do up. They could go up, they could stay flat, they might even fall. Of course, your income might go up. Or stay flat. Or fall.

I think your concern about being priced out of the market is not really warranted, especially if you are going to the Bay Area in the interim.

[MrCurmudgeon]

Originally Posted by Ariel_Austin

Why? If you can afford the home and can essentially have someone else cover the payments, where is the downside other than assuming some risk if your PM doesn't help you choose good tenants?

Home sits vacant for a while? Rents for less than PITI? Unexpected repair or other maintenance costs? Cash flow problems? Urgent need for liquid assets?

There are plenty of other risks here.

[austin-steve]

Originally Posted by akslp2080

...
Do you guys think I should buy a house right now or wait for 4-5 years and then buy it.
...

I would only buy now if you would do so knowing you won't move back. In other words, you have extra money that you feel can best be put to work invested in real estate in Austin TX. Using the "could I live in this house someday" question as one of the criteria for buying an investment property is perfectly valid. In this case, you in fact would be living in it right away. But still. Think of it as an investment and if you would not do that, then don't.

Originally Posted by Austin97

I would absolutely not buy a house if I was planning to move in a year.

Agreed. Unless as I stated above.

The advantage of investing now is that it can be purchased as owner-occupant, with better loan terms, then later converted to a rental and left as a rental going forward.

All that said, and I have no crystal ball, but I've lived in Austin and watched the cycles since 1985, the next 4 years cannot and will not see the same feverish level of appreciation as the last 4. I believe we are past the halfway point in the current upcycle and due for a breather. Whether that comes later this year or in 2 years I don't know. But the market has to soften at some point as we run out of buyers in the lower end of the funnel to push the move-up buyers. We can't handle endless double digit annual appreciation. That is unsustainable. While this is simply my "lick my finger and stick it in the air" statement, and I haven't run the stats, it's a pretty strong gut feeling.

[iamwayne]

Buy and live in until you move out. Then rent it out, why sell when you can have that house paid for by the renters? A good agent will have the place rented with minimal downtime so you don't have to worry about the house sitting with no tenant. Why wait for the future to purchase when you can do it now and start to utilize it? Learned that if my parents waited they probably wouldn't have over six rental homes now.

[JH6]

Maintaining multiple houses at once was a stresser for me.

We had two houses in New York (rentals), and we moved to Texas and bought a house.

We had both houses under property management, but I worried about big expenses (roof, plumbing, fire, etc).

I did not have enough cash to cover a big problem, but the Tenant kept making rent payments, and I keep the house in good condition.

After two years of that I sold both houses in NY. Sure as hell do miss those RENT CHECKS every month.

[Hyena]

Originally Posted by Madeline.AustinTX

Have you thought about purchasing a home now and then renting it out when you decide to move to the bay area? Right now is a good time to buy and you are right about the possibility of prices increasing over the next 4-5 years.

Just curious. How many necroposts do you think it'll take you to find a client?