Which Texas town would you prefer to invest in?

Question

Hello BP Members,I'm an investor based out of Austin, TX having a couple of properties in Georgia. I'd like to get started with my first BRRR deal, and since I have zero-to-no experience with BRRR, I'd like to do it near my home so I can learn and fail fast. My strategy is Single-family long-term rentals.I started researching various neighboring cities near Austin, and have shortlisted to these 5:1. San Marcos2. San Antonio3. New Braunfels4. Temple5. KilleenTo focus down on one particular city, I've been collecting various data points about each of the city like:1. Median Sales Price2. Year-over-year growth (or change)3. Median Days on the Market4. Sale-to-list price5. Redfin's competitive score6. Population growth %7. Owner occupied %8. Renter occupied %9. Median rent10. Crime Index11. Unemployment rate12. Per capitaBased on my initial research, "New Braunfels" seems to be the winner in most of the categories. But, I'm still confused because the other cities looks good to:

1. Temple: Has an army base there, sale-to-list price is good. Meta is building a datacenter here.2. Killeen: Median DOM is very low, Redfin score says its very competitive. 3. San Marcos: Employment rate and renter occupied % is very good, they have the outlet mall, and couple of attractions tooI'm not sure if I should consider any more data points to fix on a city. It would be great if you can throw all your thoughts, comments, feedback etc. :)

Jake Pritchard · Answer

I prefer to invest around city centers for long term holds so I would choose (and do invest in) San Antonio.

Jason Sousa · Answer

Have you visited these towns? Killeen and Temple are like the tale of two cites. Killeen is a good multi-family, SFR long term play for army recruits but has rough patches. Temple is ok for rent and small growth, but the town is littered with foundation issues. San Marcos is a great Mid-Term and Long Term play if you are interested in students as renters. San Antonio is spotty at best, low entry to invest, but you need someone who knows the area. New Braunfels is the new Frederiskburg and is up and coming. 10 years from now it will be a mini Austin. I have sold, rented and invested in all those areas except for Killeen and Temple and they all have their benefits.

Kristi K. · Answer

I live in New Braunfels and the majority of our rental properties are here in the city limits, but you cannot buy anything in this town under $200,000 that isn’t a mobile home or an empty lot. I stopped buying in Comal county in 2017 because prices got so crazy but have done extremely well in Seguin, Shertz, Mcqueeney buying properties from the tax and foreclosure sale in Guadalupe county.

Danny Webber · Answer

Killeen/Copp is a great area. I have multiple units in both and they perform well.

Danny

Alecia Loveless · Answer

@Akshay Bhaskaran I’m not going to speak to any of the locations but my family lives north of Dallas and the heat wave this year and presumably with global climate shifting heat waves in subsequent years also has really been destroying foundations.

My parents and sister live about 45 minutes apart and neither can water at all to try to salvage anything in their yards, it’s all dead, but manage to water a little bit occasionally to try to save the foundations to their expensive houses. (I’m the black sheep who’s house hacking my way to financial freedom!) everyone else in my family is lawyers! Lol.

Bug seriously wherever you decide to buy look at the foundation. The wave of the future may just be to normalize and work with the damage the heat is doing to them. IDK. It’s been bad state wide.

Neil Narayan · Answer

I would recommend New Braunfels as well. It's location between SA and Austin make it ideal with all the development happening along I35

Ryan Kelly · Answer

@Akshay Bhaskaran all of these options work depending on your strategy. The army base is actually in Killeen, not Temple. Killeen is at a lower price than these other markets, but has a high concentration of C/D class properties due to the high transience and low wages of the military. Numbers can look good, but you may have more tenant turnover and headaches. Temple is about 20-30 minutes away from Killeen and a completely different demographic. Temple has three hospitals and a lot of supply chain jobs that support the bigger cities in Texas. I personally like Temple a lot. It’s too far away from Austin to be considered part of that metro area. New Braunfels is another great spot that’s an outer suburb of San Antonio. Lots of growth in the Comal county region.

The key is to imagine owning 3+ properties in that market. Get comfortable with the price points and returns and all of them should do well.

Jacob LeBar · Answer

Killeen has the military base, Temple is a much higher income area because of medical professionals at Baylor Scott White and the VA hospital. I work with investors who buy a lot in Belle county, often when you purchase in Temple/Killeen you're buying for instant equity and cash flow.

Melanie Thomas · Answer

New Braunfels is a great place to invest, agreed! Good luck & happy investing!

Which Texas town would you prefer to invest in?

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