House hacking potential in Austin

[Lauren W.]

I'm an Austin native who sincerely regrets not buying a home when I first moved back in 2013.  I'd love to purchase a duplex in the next 1-2 years (self employed and will likely need to wait until 2017 returns are filed to qualify for mortgage).  I'd live in one half while renting out the other initially, with the intention of holding onto the property as a long term rental.  I'd want to live as close to central Austin as I can afford (<$350k) - transitional areas like SE or Rundberg still preferred over outer suburbs like RR/Pflugerville/Leander.  I'm not willing to bet on appreciation and will only move forward with a purchase if I can find something that makes investment property from the time of purchase.

With our high taxes/insurance and ever increasing RE prices over the last decade, cash flowing properties seem rare to nonexistent based on MLS listings. Does anyone familiar with Austin real estate think this could be a realistic prospect? I'll definitely work with an agent when I'm a little further into the process but would love any input from the BP community at this point

[Joe Scaparra]

Hi Lauren,

I think you have the right mind set in seeking out a duplex. In this market it might be the best way to get back into the real estate market. Rundberg might be a good place to start, however it is now appreciating like the rest of Austin. For a while there it was still know for the crime and run down properties. Still has some of that but due to prices else where in the city it is now starting to appreciate as well. Because you would be house hacking I assume by living in one side I think it may be a good possibility for you. Keep looking, and try to find someone who might owner finance so that you don't have to wait to have 2 years of income to qualify for FHA or conventional loan. Live frugally and save as much as you can prior to buying but jump in as soon as possible because unless a downturn pops up soon, Austin real estate is still going up with no end in sight.

[Lauren W.]

Thanks for your input!  I'd love to see a an economic slowdown bring some reality back to the market.  Since it's anyone's guess as to when that might happen I agree that searching for the best price point I can find now is the way to go.  Luckily I may only have to show 1 year tax returns for mortgage pre-approval since I stayed within the same profession when moving to contracting

[Chris Sweeney]

Maybe try and find an owner finance deal. House hacking won't pay the bills but I think it's still a worthy option. I'd hate to wait a couple years to just see prices and rates higher.