Investing in Austin real estate can be tricky. With inventory in the city of Austin remaining under 2 months (6.5 months considered an equilibrium buyer/seller market), many investors are hesitant to get into the market or become quickly frustrated with the competition, finding the “right” deal, and therefore quickly give up. However, it IS still possible to find quality real estate investments in Austin’s competitive sellers market.
That’s where we come in… check out these “case studies” for 3 bedroom, 2 bath, single family homes located in SEED’s top 5 neighborhoods we recommended to investors right now.
1. Milwood (northeast Austin zip code 78727)
Why: Milwood is a haven for many cool houses built in 70s, 80s, and 90s located west of the McNeil/Jollyville area. This neighborhood has great parks, good schools (such as Canyon Vista Middle School and Westwood High School) and even boasts a close proximity to downtown and major employers. As a well established area, homes generally are in good condition or needing moderate updates, but perfect for rentals.
Purchase Price: $260,000
Down Payment: $58,000
Projected Monthly payment PITI: $1550
Projected Monthly Rent: $1650
Projected 5 year valuation: $316,000
Projected 10 year valuation: $403,000
2. Windmill Run (southwest Austin zip code 78736)
Why: This green neighborhood has big shady trees and large lots with a more vintage Austin feel. Families will love the sought after AISD schools, and the close proximity to greenbelts. Commuters will be happy to know it's also close to major thoroughfares, and amenities.
Purchase Price: $265,000
Down Payment: $53,000
Projected Monthly payment PITI: $1580
Projected Monthly Rent: $1700
Projected 5 year valuation: $322,000
Projected 10 year valuation: $411,000
3. Northcape (northeast Austin zip code 78753)
Why: Northcape is blessed with a proximity to downtown and northern tech companies like Dell, Apple, and the Domain. As far as making your investment goes, the homes can be a little run down- so plan for light make ready costs and updates. However, prices are so low, there is no where to go but up! One major thing to note is that this neighborhood is prone to foundation movement so be prepared to have that checked out before purchasing.
Purchase Price: $185,000
Down Payment: $37,000
Make Ready Costs: $3000-$5000
Projected Monthly payment PITI: $1175
Projected Monthly Rent: $1375
Projected 5 year valuation: $242,000
Projected 10 year valuation: $340,000
4. Central East Austin, zip 78721
Why: If you know anything about Austin, you know the East side is well loved and growing like crazy. Its proximity to downtown Austin and hip East Side restaurants and bars make it one of the most popular areas in the city- which has led to rapid appreciation and gentrifying neighborhoods. This area has plenty of new construction and move-in ready renovated homes, making it easy for investors to fill the property quickly. Excellent bike lanes to and from the University of Texas and downtown makes it especially appealing to younger tenants who prefer bicycle and public transportation.
Purchase Price: $299,000
Down Payment: $59,800
Projected Monthly payment PITI: $1775
Projected Monthly Rent: $1950
Projected 5 year valuation: $363,000
Projected 10 year valuation: $463,000
5. Georgian Acres (north central Austin, zip 78753)
Why: This cozy neighborhood boasts excellent proximity to new ACC Highland Mall redevelopment as well as northern employers, while remaining affordable to investors and tenants alike. You'll find an eclectic mix of homes- even some on oversized lots, allowing for future development and multiple dwellings. Being that it has a mix including some older homes as well, there's a chance some of the vintage houses might need a little work before being ready for tenants.
Purchase Price: $249,000
Down Payment: $49,800
Make Ready Costs: $5000
Projected Monthly payment PITI: $1500
Projected Monthly Rent: $1650
Projected 5 year valuation: $302,000
Projected 10 year valuation: $386,000
The above projections are based on 5% annual appreciation (the current average in Austin area and has been around that for past 30 years).
When to sell? In the , “My favorite holding period is FOREVER.” Who can really argue with Warren?
Want to learn more about opportunities to invest in Austin’s real estate market? and we will show you how