Investing in real estate in Austin (Round Rock, Cedar Park: renters, condo, townhouse)

[HEKTO]

Hi Everyone,

I'm looking to purchase investment property, preferably Single Family me or Townhouse in Austin area. I was thinking about Round Rock, since it close to several IT companies. What do you think? Any other areas to consider?

[TXEX06]

You looking for people to do the research for you?

[Komeht]

By low, sell high.

[HEKTO]

Originally Posted by TXEX06

You looking for people to do the research for you?

Asking advice is part of the research. I wonder if Round Rock and Cedar Park are desirable areas in term of rent? Recommendations about other areas are welcome as well.

Thank you.

[EzPeterson]

No. On the whole, the Austin area is a ****-poor investment opportunity for an absentee landlord right now.

Between:
1. Inflated price relative to rental income
2. Management costs
3. Property taxes

You would be better off sticking your money in a low-yield CD.

[HEKTO]

Originally Posted by EzPeterson

No. On the whole, the Austin area is a ****-poor investment opportunity for an absentee landlord right now.

Between:
1. Inflated price relative to rental income
2. Management costs
3. Property taxes

You would be better off sticking your money in a low-yield CD.

hm... based what I see on Trulia/Redfin/Craigslist, house in Round Rock/Cedar Park can be purchased for ~$160K and rented for ~$1300. Am I right? If so, it's not that bad, comparing to area where I live (SF Bay Area). Hopefully a house price will go up over time.

BTW - if you can suggest better areas in US for real estate investment - it will be greatly appreciated.

Thank you.

[usdreamz]

You can consider southwest austin (Shady Hallow, Circle C etc). There are lot of semi conductor companies (Intel AMD Freescale ARM).

[HEKTO]

Originally Posted by usdreamz

You can consider southwest austin (Shady Hallow, Circle C etc). There are lot of semi conductor companies (Intel AMD Freescale ARM).

Thank you for your advice. I looked at homes in the areas you have mentioned. Looks like prices are $300k+. My budget for investment is ~$160k.

[bryandisick]

You can look at Manor or Pflugerville that's close to the downtown

[atxcio]

My advice:

* Don't forget about the property taxes, annually about 3% in most of the areas you are looking for. So that's a $4800 expense each year on a 160K appraised home.

* Don't buy a condo/townhouse in a suburb. People live in those areas to own single family homes; you might find renters without much trouble, but you'll find very few buyers when it comes time to re-sell. Plus the condo fees/assessments will eat into your cash flow.

* It's not easy to manage rental property from another city. You will end up paying more in expenses than you would if you bought an investment property near where you live. Maintenance emergencies are bad enough when you can get in your car and go evaluate the problem yourself... they are much worse when it's a plane ride and a few days of your time to do it. Make sure you are mentally prepared for that.

* Other places to invest in the US? If you know the place that will be the "next Austin", invest there. If you don't know where that is, then Austin is probably as good as anywhere for reasonable appreciation, for the reasons you already know: great economy, low unemployment, popular city, growing rapidly.

* My rule for any rental property: don't buy anything you wouldn't live in it yourself. You may never do so, but it is important to make sure something meets at least your own standard for neighborhood/safety/niceness.

Best of luck.