Austin vs. Dallas/Fort Worth

[Muhammad Wahla]

I am planning to buy two rental properties as my first investment on conventional loan. I am looking for the price range in between $150K-$200K for individual property. I am confused between Austin and Dallas. I live in Austin but the way Austin market is going up, it is ridiculous. With this price range I can only buy on the east side of Austin and for Dallas I am interested in the areas of Fort Worth, Garland and Mesquite. Cash Flow is almost same ranging between $150-$200 per month after all the expenses including property management. I am interested in turn key properties so that is why the cash flow is very minimal. Please let me know your thoughts. Where should I buy considering future growth and appreciation? Should I buy on the east side of Austin or should I go for Dallas market?   

[Spencer Knight]

I'd say that if you're looking for appreciation, Austin is definitely a safe bet! Right now some areas of downtown are seeing annual appreciation as high as 14%, while areas outside the city itself are seeing annual appreciation of almost 3% on average. These rates are among the highest and quickest appreciating in the state and country. 

Yes, Austin is more expensive than other cities in Texas, but if you're willing to spend 200k to hold on a property then you should be able to find a solid rental in Round Rock, Leander, Cedar Park, Taylor, etc that will net you a solid return on rents and appreciation. All the areas just outside the city are growing quickly, and several large corporations are moving their operations here as well. 

For example; 3M is in the process of relocating their offices and 800+ employees to north Austin closer to Pflugerville and Manor by April 2019, which are both major areas for those commuting into Austin already, so by 2019, that area in particular will most likely be appreciating more than the average of the surrounding area. 

Just a small bit of background about the Austin area, let me know if you have any questions about the area and I'll help you figure out your next move!