How to make money with the high property taxes in Austin?

[Portia Wells]

Hi! I’m newer real estate investor with aspirations to build my portfolio in a smart way. 

We own a single family 4 bedroom, 2.5 bath home (built 1977) in Barton Hills. It's our primary residence but we've decided to not be in Texas for the near-term. Our option is to rent or sell the property. We have a great interest rate (2.25) and our value has increased by around 300k since we purchased in early 2021. Austin is growing and it seems like a good place to invest but I'm not sure how landlords are covering their mortgate, plus property taxes, when there's no homestead exemption attached. (Our mortgage is on the higher side because we purchased our home with a VA loan.)

Would love any input on how to make a rental work in Austin! 

[Jeff Nash]

So a few thoughts:
1) You’ve lived and used it for 2 years by now and if you sell it and you are married filing joint you won’t recognize any gain on the sale as your primary residence.  That amount of appreciation is awesome. I guess it depends too on where you are going to live next and how much of the net proceeds you want/would need to use.  Understanding your overall financial situation is important.

2) You can cash out refi with built up equity and have several options from there.  

3) Try to rent it for a while and still get the 121 exclusion from #1.

4) Just do some analysis and run the numbers on property taxes, insurance, maintenance, utilities, repairs etc and see what rental income is needed to break even and perhaps cash flow slightly.  @Denver McClure and @Harrison Sharp can help with this analysis and check feasibility or reasonableness in light of current market conditions.