Areas around Austin you like SFH's

[David Sray]

I've been holding out on for multi-family outside of Austin, but simply haven't seen anything that really works for me lately. It could likely be argued that I may not be looking hard enough, but I'm also thinking about picking up another SFH rental for now. Thought I'd see what areas people are liking right now.

Would like to stay below $200k, though I know that's not always easy in this area. How are you guys finding SFH rentals in the areas around Austin?

Cheers!

[Alex G.]

@David Sray Have you tried MLS?

Out of curiousity I just pulled all <$200K houses in Austin, Round Rock, Leander, Cedar Park and Pflugerville. There are 66 houses in these areas priced below $200K.

They are all over the board. From 2,400 sf, 17 years old for $149K in Austin's Colony (east of I30 tollway) that probably doesn't need much to get it rented right away at about 1% rent-to-price ratio - to little 40-50 years old houses about 1,000sf a lot closer to Downtown in areas 9 and 11 of MLS (78744, 78741).

There are several rent ready or near rent ready houses available in good, appreciating areas of S. Austin in 78745 that are listed at near, or just above 200K. Some of these you can probably negotiate down to below $200K. These won't give you a 1% ratio, but the appreaciation rates for these are likely going to be a lot better than for cheaper, younger, bigger houses on the outskirts. 

Ultimately, you'll have to tighten up your buying creteria quite a bit based on a desired age, size, amount of upfront make-ready repairs you're willng to accept, rent-to-price ratio and appreciation potential. Once you have that you can closely track the MLS for those that fit... Then go make a lot of offers.

I am currently looking for rehab opportunities, not rentals. But the search process is fundametally the same. Define a tight criteria based on factors we discussed (rehab margins in my case)  and look for listings that fit the criteria. 

By the way, the competition for fixer-uppers in MLS is fierce. I generally don't like MLS for that reason but the off-market opportunities I used to find are no longer there. So 2 months ago I decided to have a go at finding a rehab deal in MLS.

I generated some 180 leads since to research that might fit my parameters. I made written offers on 18 properties. I was either outbid by other rehabbers on new "fixer" properties coming on the market, or received a "declined" response to my offers on properties that has been on the market for a while. 

After 2 months I finally just got an offer accepted on one. I am fairly pleased with that one. The numbers are better than what I have seen offered by local wholesalers (and passed). I think it's going to be a good project with an acceptable margin.

Good luck!