Where & what to buy in Austin TX with $175k?

Question

I would like to purchase an investment property in Austin, my budget is $175k max. From what I've read SFHs are better investments than condos but with my budget I'm pretty much looking at condos. This would be my first investment property. It doesn't necessarily have to be Austin - I'm open to the surrounding areas. But I feel Austin will have the highest appreciation.

I need to know (1) best way to calculate if a property is worth buying? (2) should i Airbnb it or do a long-term rental? to get the highest return.

I need to know  (1) best way to calculate if a property is worth buying? (2) should i Airbnb it or do a long-term rental? to get the highest return.

Costin I. · Answer

@Bhuja Parikh Unless you work with a wholesaler to find you a property in some sort of a distress and be able to acquire it at a substantial discount, you'll have a hard time finding anything close to a decent property (maybe in a C or D area?) or cash flowing investment property (unless you put 30%+ down payment).

If you are talking Killeen or Bastrop, you are no longer talking about Austin, unless you want to be very lax on your definition of "surrounding areas".

Condos are the first one affected in a downturn - I would advise against this option at this time in the market cycle.

Best way to calculate? Use the BP calculators. Of course, you'll have to know your inputs, otherwise watch for GIGO.

STR in city of Austin is heavily regulated and restricted - might want to get clear on those regulations before counting on that.

Do you have a more detailed investing criteria? Something more than "175K property in Austin with the highest return"?

Ronald Rohde · Answer

I would say he shouldn't be investing at all into real estate. If its $175k equity thats better, but vague posts worry me about their due diligence beforehand.

Jason Hirko · Answer

@Bhuja Parikh Lots of stuff south of 290 priced below $175k, but that doesn't leave a lot of room for repairs. If you only have the means to buy a $175k rental investment property, I'd look to San Marcos, New Braunfels, or an Antonio. Pick up something decent for under your budget

Shital Thakkar · Answer

@Bhuja Parikh,

• You can still find good SF in suburbs of Austin in 175K range.
• You are right, SF is better investment than condos
• Not sure how much more quick appreciation you will get in Austin, need Amazon HQ2 for quick appreciation :)
• What is your property criteria... B, C, D...? based on that you can decide best way to calculate worth buying... If this is your first property, go with Class B... and try to get 0.8% rent on purchase price.
• AirBNB/Long term rental again is depend on your long term scale goal.... AirBNB is higher ROI but low in ROT (Return on Time) as you need to spend lot more time than long term investment.

Good Luck Buddy...!!

Danny Webber · Answer

you can buy a 4 plex in killeen with that +/-

that's about it unless you go out to bastrop or so... less appreciation but prices are cheaper out there

Mike Krieg · Answer

Real tough to buy a duplex or sfr in Austin for cash flow. But with a large enough down payment like you have I think you can make it cash flow. The only trouble is that compared to other options, that might not be your best play in this market. I'd steer toward some of the bigger projects here in Austin like apartment syndications and/or new development deals that are coming online. They're safer in my view, completely passive, and will perform better over the next 5 years. This is what I've been doing in Austin: selling my smaller stuff and going into bigger projects. As you grow in RE over time you'll see the wisdom of going bigger anyway, why not start now!

Bhuja Parikh · Answer

Thank you for all the feedback!

Kris Wong · Answer

You say your budget is "$175K max", but how much cash do you have available to do a deal?

Dan Burstain · Answer

You don't have to go outside of Austin to find houses at $175K or below.  Plenty of condos but there still are houses as well.  I have about 8 within 40 min or less of downtown Austin.  Some only 20 min or less.   PM me and I will send you a link to them.  As for short term rentals, they have stopped issuing permits for them as far as single family homes renting out the entire home.  The only way to do it now, and not live there, is buy a four plex and short term rental half and long term rental the other half.  They still allow you to do that I believe.  But with $175K budget you won't find a four plex in the Austin area.

Where & what to buy in Austin TX with $175k?

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