Austin, Texas has been an investor haven for the last two decades or so, with next to endless opportunities to purchase investment properties and rent them out for a profit. With the amount the city has grown in the last few years however, the number of cash flowing properties from the time of purchase has dwindled significantly.
For those willing or able to put a higher down payment (over 20-30%), opportunities are more accessible throughout the city. But for the average investor, the norm is losing a few hundred dollars per month in exchange for having most of the mortgage payment covered as well as anticipating a larger profit margin from home equity when they eventually sell.
The above is a solid strategy for the Austin area, and the most realistic for most homebuyers and investors. For those who really want to buy with 10-20% down and have the entire mortgage payment covered from day one however, there are a few remaining pockets in the Austin area to consider.
1. Round Rock – Multiple Pockets
Of the three on this list, Round Rock currently has the most areas available with potential to yield a positive return. A 3-bedroom, one-story home rents for around $1,575. With a 15% down payment and target purchase price of $220,000, you could earn roughly $100 per month and have your mortgage payment completely covered.
2. Leander – Crystal Falls
Though tax rates are high, Leander has grown rapidly over the last few years with no signs of slowing down. The Crystal Falls area is still heavily under construction from new home builders, and the monthly payment after purchasing many of those homes can be roughly even when marketed for rent. A 3-bedroom, one-story home in this area rents for around $1,750. With a 15% down payment and a target purchase price of $245,000 or less, you’d break just about even and have your mortgage payment completely covered.
3. Bluff Springs – Southpark Meadows
Last on the list is Southpark Meadows, a growing employment hotspot in South Austin. Though opportunities for instant cashflow are incredibly slim, there are still a few homes that pop up from time to time that fit the bill. A 3-bedroom, one-story home in this area rents for around $1,750. With a 15% down payment and target purchase price of $260,000 or less, you could earn roughly $35 per month and have your mortgage payment completely covered.
Please note that the above examples are purely estimates based on today’s mortgage rates and market and are each hypothetical scenarios. If you’re considering purchasing a property in Austin, please contact me! I’m always happy to talk numbers and work with your budget to find an investment strategy that makes sense for you.
I’d love to be your resource for all things real estate, so please reach out any time!