Help for Austin Texas Single Family Investing

[Ravi S.]

Hello Friends,
trying to evaluate investing in Single Family in Austin, Liberty Hill, Georgetown, Texas.
Past year has been great price increase which is highly enticing.
Only two things are the rents are 1600-1900 for 3 bedroom single family home wont cover the mortgage+HOA+Pest control of 2500-2600
and
the builders are building houses in huge huge numbers so is a glut or over supply coming ?

Request all friends to share / voice their views.

Thanks in advance !

Ravi

[Bryan Noth]

Thanks @Lucia Rushton!

@Ravi S. To answer in reverse order, over supply is not on the horizon.  The Austin MSA has a severe housing shortage and the rate of people and business relocating here is keeping the inventory critically low.  Even if the rate of construction doubled overnight it would take years to stabilize.  

The rent to purchase price ratio is typically not as appealing in year one.  I would highly encourage running analysis out for at least 10 years (BP calculator is great for this) and the vast majority of the time by year 3 the returns are solid.  This is expected in a growing market.  Austin is not often identified as a strong cash flow market play.  It's a growing market and many folks believe it will continue to grow so the long term play (3+ years) is typically the most appealing.  

I would be curious to see your numbers on your property analysis on cash flow.  The $1600 : $2500 cost ratio sounds off for those areas.  I would expect it to be closer to $1900 : $2100 but it is very dependent on what numbers you plug in.  Do you have a cash flow vs cost analysis to review?