Austin Vs Dallas: Rental Investment Home: Reports says Dallas WINNING (Orange: real estate market, insurance)

[varanj_16]

Guys, i have been doing a lot of research on the real-estate rental investment market and found that Austin, TX has had 30% real-estate appreciation in last 3 years - as its population also multiplied by 1.5 times in the same time period.

Now, Dallas seems to be the next melting pot in TX with reports projecting it as #1 place to invest in for rental properties in 2017 with estimated growth of 8% next year.

Austin market, on the other hand, has already touched a high, however - I seem to feel that Austin gives more of a Sacramento - California vibe than Dallas ever will be - based on whatever I have been reading.

You localities can surely chime in and share your insights.

https://www.biggerpockets.com/renews...investingdata/

So far what I know about Austin is: Rock Music Festivals city, new tech-companies hub (Apple/Samsung), Metro Train to Downtown Austin

Dallas: Southwest/American Airline hub, cheaper housing.

[Austinite76]

Good. Go invest in Dallas.

I’d be a little suspect of any information sources that show 50% population growth in 3 years, but if it’s on the internet, it must be true... right?

Also. Austin and Sacto have almost nothing in common.

Listen. You’ve had a lot of advice that points to your attempt to buy an investment property in Austin being a horribly misguided choice. I would advise perusing the Real Estate-Renting forum for a little taste of how badly this is going to go for you. Your lack of fundamentals is going to haunt.

[Bp25]

Yes, invest in Dallas. Also, if we have real estate market insight, why would we share with you for free? We would create a seminar to sell you the secret

[varanj_16]

Originally Posted by Austinite76

Good. Go invest in Dallas.

I’d be a little suspect of any information sources that show 50% population growth in 3 years, but if it’s on the internet, it must be true... right?

Also. Austin and Sacto have almost nothing in common.

Listen. You’ve had a lot of advice that points to your attempt to buy an investment property in Austin being a horribly misguided choice. I would advise perusing the Real Estate-Renting forum for a little taste of how badly this is going to go for you. Your lack of fundamentals is going to haunt.

What according to you is the city to invest in? please enlighten

[Austinite76]

Originally Posted by varanj_16

What according to you is the city to invest in? please enlighten

Somewhere very close to where you live.

[varanj_16]

Originally Posted by Austinite76

Somewhere very close to where you live.

Sorry but the current property I have rented out is 3000 miles away and I have had no major issues with it being successfully rented out via an agent. Of course, as an investor, I was always ready for occasional vacancy or repair costs.

[Austinite76]

Originally Posted by varanj_16

Sorry but the current property I have rented out is 3000 miles away and I have had no major issues with it being successfully rented out via an agent. Of course, as an investor, I was always ready for occasional vacancy or repair costs.

Your story morphs around way too much.
First you were a new investor, then you’re already renting out a property on the east coast, using an agent, then you don’t know what they cost.

You were buying in Phoenix, then Atlanta, then Austin, then Dallas, then St Louis.

I’m out

[varanj_16]

Austinite76: I appreciate your logic of factoring in Property Management Costs - even for a brand-new property (that usually has every appliance covered under warranty for 2 years)

Let's say i manage to get a property in 78613 zip code for:

Sales Price: 300K
Investor Interest Rate: 4.5% (30 yr fixed)
20-25% down payment: for this i assume 20% down = 60k
Tax: 2.67% =
Home Insurance = $1000/year
Vacancy = 2 months/year
HOA = $50/month
Property Management Fee = $1200/year

Monthly Payment from my pocket = $2117 (inclusive of everything noted above) + $1900 * 2 = $3800 Lost in vacancy

Now my goal by buying this property is NOT to earn big monthly cash flow: if I break even: i consider that as a win in today's market or I should change my goal to be ++ cash flow per year and look at Indianapolis/Cleveland 100k properties that rent for $800-$1000/month

1. I want minimum hassle in my life - that's why i opt for brand-new or 5-6-year-old max properties = less wear and tear = less maintenance hassle

2. The above 4.5% interest rate is a worst-case scenario

3. The 2-month vacancy may not happen every year - good long term tenants is a possibility and so is the chance of increasing rent every year by $50 or $100

4. I am banking on the appreciation of the property in next 5-10 years.

5. I am into Information Technology myself, so I feel more comfortable investing in Tech Hubs

6. Real-Estate is not my full time job, its more of an occasional once in 2 years side-kick thing i do to keep investing money

7. With some IRS tax return incentive due to paying $8000+ in this property and around $9000 in my existing property = $17,000 / year in property taxes alone - i should get some extra return (in case trump new regulations do not pass) and i can keep writing off my exisiting 400k + new 200k+ something = $625k mortgage INTEREST RATE amount off in taxes.

This should help.


In a nutshell, if i loose $3-4k/year on this property or break-even in the first 2-3 years before I generate any ++ penny, then that's what it seems like at the moment or I should look elsewhere in other markets.

[varanj_16]

Originally Posted by Austinite76

Your story morphs around way too much.
First you were a new investor, then you’re already renting out a property on the east coast, using an agent, then you don’t know what they cost.

You were buying in Phoenix, then Atlanta, then Austin, then Dallas, then St Louis.

I’m out

You actually need to chill before passing a judgment, we all are strangers here. I bought a property in Orange County, California 2 years ago and now buying my second one, there's nothing to speculate here, i am doing my market research and will take the best decision as per current circumstances.

I have to research Alpharetta/Cummings area in Georgia and role the dice between GA and TX - that's it - AZ is currently out of the picture for me.

[centralaustinite]

Why real estate as an investment? Huge carrying costs and illiquid. There are some who are super savvy like Austin-Steve who do well with real estate investment because they have a long-term strategy and lots of local knowledge but otherwise I would put all that money to work in the stock market!