Killeen, Temple, Fort Hood

[Mike B.]

I need help understanding the Temple/Belton area. 

Some Background: We are still new at being landlords. I'm getting ready to rent my home to make our second SFR in Leander Texas. I'm only 35 minutes from Killeen/Temple area and can't help but feel like I'm missing out on an opportunity to redeploy our assets from Austin to an area that'll cash flow.

The Reson: I'm a government employee and need cash flow on anything that I buy. Most of these Austin properties are very expensive and need 40% down payments to break even. This Killeen/Temple area seems the only place nearby where 20% down can buy me something that works.

My thoughts on the Area: At first glance, Killeen and Temple honestly look like garbage cities that I wouldn't want to live anywhere near. However, I am starting to believe all the working-class people from the north Austin suburbs will be forced out by high rents and property taxes. If that holds true, I think they will need to live in Temple or Belton and commute down to north Austin. I'm not sure about Killeen itself. I think Temple/Belton is within an hour of anything in north Austin. 

Price Differences: If a worker can buy a house in Temple for $250,000 and drive 45 minutes south (to their job) into the Austin suburbs where houses start at $450,000 it just makes sense. If I'm working at a $15/hr to $20/hr job in north Austin Temple looks really nice. 

What am I missing? I am itching to sell/refi my suburban Austin rental and buy something to the north.  

 

[Pete Harper]

Never ask a fisherman where his favorite fishing hole is located.

Killeen is my second favorite. We purchased in 2019 and we are up over 65%; solid appreciation.  Rents are trending upwards we are sitting at 1.4% deal after cosmetic renovations; paint, flooring, and built in microwaves.  Everything has stayed rented and we are able to raise rents whenever they come open.  That being said Killeen is a strange market. You really need to watch neighborhoods.  A block or two makes a huge difference.  I highly recommend you drive around and get a feel for the area before purchasing.  Not long ago an out of state investor posted on BP he just complete a big reno and couldn't fill the unit at market rent.  He did a great job on reno with A-class upgrades.  The problem was he was in a bad area, nobody wanted to live there no matter how nice the place was.  

Some of the comments have been true of the past. Killeen was an overlooked market.  Sure it is a military town but none of our current tenants are military.  We are seeing some spill over from Austin market as people look for cheaper housing.  I haven't had any luck in Temple.  Everything I've looked at is older and needs a lot of work.  I looked at a 4-plex in Temple and the tenant complained about a leak from upstairs.  He had buckets set out to catch the water.  Looking at upstairs unit I thought we were going to fall through the floor.  Other properties were in old town, build in the '30s and '40s, way over priced.