San Antonio vs Austin vs in between for rentals? (2021)

[Chilann Chan]

Hi All, 

I am looking for investment property along the Austin to San Antonio I-35 corridor. The range I am interested in is $200k to $300k property. I am open to either getting more in appreciation (e.g. Austin), or cashflow (San Antonio). However, if it is in Austin the rental income will need to be enough to cover all the expenses (including management fee) for it to work for me. 

So far, my conclusion is rent, as of Feb 2021, its pretty similar in the price range I am looking for in Austin, San Marcos/New Braunfels and San Antonio (Rent all around $1500-$1795 range depending on areas for $200-$300k property) 

Austin: Seems like you have to be willing to go $300k and above but the rent doesnt seem to increase with it, so either you need to put much more in downpayment or be willing to chip in each month for expenses, as an investor. 

New Braunfels/San Marcos: I am considering this area, but I dont know much about it yet. My theory is, as Austin becomes unaffordable, people will move to New Braunfels/San Marcos areas so in my opinion it will appreciate better than San Antonio, with similar cash flow for rental income since price is similar to good areas in San Antonio

San Antonio: You get more rental income for San Antonio, I feel that appreciation maybe less for New Braunfels/San Marcos, and less so than Austin. 

Please spark a debate!!! :) Love to hear what you think if you are familiar with Austin to San Antonio area. The realtor I worked with seem to only know either Austin, or San Antonio, so I cant get a full perspective comparing Austin, San Antonio and the in-between rentals. 

Thanks!

Chilann

[Andy V.]

San Antonio 100%. I'm an Austin native and currently living in San Antonio & have been here for about 4 years now - the growth here is rapid these days (just announced 2nd largest growing city in the nation). It's such a large city with so much potential and yet still very affordable investment properties - depending on how much work you're looking to do. Large population will results in a desirable vacancy rate. 

I have dozens of friends I grew up who are constantly telling me they're ready to get out of Austin - the first place they're considering is San Antonio. I think there will be a mass wave of folks moving down I-35 slowly but surely as they look for new opportunities - If you think back to what Kyle/Buda were 10-15 years ago compared to today it's hard to deny the crowds moving further and further south. Same thing going north of Austin with Pflugerville, Round Rock, Hutto, Georgetown, Liberty Hill, Leander areas as you move North/Northwest from Austin. The population is just widening the circle. 

San Marcos is a college town, and NB is still very small with limited activities for people looking for the big city vibes. In my opinion, San Antonio is a real estate gold mine for the future of what San Antonio will be, partially due to the migrations from Austin but there are a lot of pros about this market.