Newb soliciting advice on plan - Austin, TX

[Vivek V.]

--> NEWB MISTAKE - I Meant to say "looking for" rather than soliciting, but it looks like post titles cant be edited :-( <--

I'm an absolutely n00b to the world of REI, I happen to have found my way to biggerpockets thanks to the interwebs and would love your advice.

Here’s what I’m considering investing in -

1. A SFH 3+, 2+ bath in the N Austin,TX area.
2. Keeping the overall cost under ~ 250 K mark.

What I’m hoping to get from the deal.

1. A rental investment for the first few years, that I could potentially move into in a few years.
2. Not expecting a large CAP rate or much cash flow initially but hoping that will change in the medium term (~ 3 years). At least initially, I'm hoping that the house pays for itself( ie. mortgage, property management, HOA, property taxes and other expenses.
3. Appreciation.

What I’m concerned about -

1. Property taxes - Given that Im going to be out of state for atleast a few years, I understand that there isnt a cap on the property taxes. But realistically, what percentages should I be accounting for?
2. If I end up holding the unit purely as a rental investment. Are there any other hidden costs that I’m missing here?

I appreciate any other feedback/advice you may have 

Thanks!

[Linda Osborn]

Welcome to BP @Vivek V.! Lots of information here! 

First thing you should do is spend some time on BP and with other investors and get educated. Although I agree great cash flow is great, having someone else pay off your investment (thus "buying" you equity), and having depreciation to counter your income (conditions apply, so do your homework!) are excellent reasons as well. Appreciation is a fantastic bonus, but it is risky to count on, even in our dynamic Austin market. 

Depending on where you are in life and your current lifestyle, my recommendations would be different. Feel free to reach out to discuss further.

Some comments on the discussion with @Ryan Blake above:

- Property taxes. Property taxes are capped IF the home is purchased as a homestead. Investment property taxes are NOT capped, and, as you can imagine, have been a big topic in the past 2-3 years as property values in this area continue to climb. So, you are correct, property taxes need to be considered. 

- Ryan captured the costs pretty well. Additional ones to look out for are HOA dues/fees. These can vary significantly across the Austin area depending on subdivision/amenities.

Good luck with your investments and please feel free to let me know if I can help in any way!