Out of State rentals: Austin, TX

[Jon McCarron]

Hello All,

Recently, 2 old college roommates of mine moved to Austin, Texas. I told them that I can't wait to make a visit down there (I am currently in Massachusetts) to see them, and check out the city. But giving it some thought, I figure, why not check out some real estate while I am there. I have not done out of state deals before, so I am not sure how I would get started with it. I think I am going to plan and visit those guys in March 2015, so like 5 months away. 

My strategy would be buy and hold rental/s that produce positive cash-flow. Single or multifamily homes.

I am currently listening to any BP pod-casts related to out of state investing, and reading any blogs and forums about the subject as well. And I figure I would send this out to get even more perspective.

My questions are as follows:

1) What are some good places to start research about the city? Websites, blogs, newspapers?

2) How/ when would I consider building contacts/team for Austin? Suggested property management companies or real estate agents or agencies.

3) Any suggestions on areas to avoid, or any areas to definitely check out?

Thank you for any and all advice! 

[Ali Boone]

Hi Jon,

I live in LA and have always bought out-of-state. You will always hear people on one side or the other about it, but certainly know that plenty of people do it just fine. I wouldn't do it any other way personally. Not everyone will agree, but who cares, my investing has nothing to do with their opinions. :)

To answer your questions...the best thing is to network, especially on BP. Just start asking around for anyone working in or around that area. That's the best starting point. My word of caution though, is make sure you understand how to calculate cash flow correctly because you want to be sure you will get positive cash flow out of a property. The reason I say that is Austin isn't too slick on price-to-rent ratios that produce positive cash flow. Houston, Dallas, and some of San Antonio are good, but Austin isn't usually known for it. Not to say you can't find anything there, but it will be much harder.

Best of luck! You'll have fun with it.