First House Hack in Austin - Best General Areas?

Question

Hi all, I am a first time real estate investor looking to purchase my first "house hack" (live in one room/unit and rent the rest) here in Austin. I am looking at a general price range of about $250K-$350K.

Thanks to covid I am now a remote employee and can get a house pretty much anywhere in the area with no worries about commute. Given this freedom, what are the best general areas (north, south, southeast, etc.) to start looking at properties within my price point? Are there any particular suburbs or zip codes you would recommend for rentals? I've heard good things about Round Rock and Cedar Park.

Ideally, I would like a cash flowing property but would be okay with breaking even if needed. I am interested in both single and multi family so open to either.

I know this is a broad topic so just looking for general recommendations of where to start narrowing down my search. Thanks in advance!

Jeremy Vandermause · Answer

@Matt Riley There's a lot of good advice in this thread. I've lived in Austin my whole life and it's been awesome to see the change and growth of all the zip codes and surrounding towns. My girlfriend and I are currently looking to do another hack in the same price range (250K-350K). If I'm being honest, we are pretty much priced out of East Austin proper in that price range (78702, 78721, 78723) unless we are willing to do some renovations. My girlfriend hacked her house in Southeast Austin (78741) and has had success with that.

Much like other Realtors here, I like 78753, 78754, 78758, 78759 - close to the Domain, Apple campus, Samsung campus, the new Austin FC stadium - these zips are and will be growing for many years to come. South Austin is great too (78741, 78745, 78748, 78749). 78744 has great prices and is super close to the airport, Mckinney Falls, and has easy access to most anything if you're willing to drive. However, it is a bit of a food & entertainment desert out there - nothing really exciting in that zip code unless you drive across 35 or into downtown/East Austin. Fortunately, they are breaking ground on a new development just east of the airport in 2021!

As far as towns around Austin the obvious choices are up north -  Round Rock, Leander, etc. I love Pflugerville for it's population growth (~100%) and median income (~70K), and the houses are super affordable and EASY to hack.

If you're interested in taking your hack a step further, I have helped several friends build a tiny home in their backyard for less than 40K. They rent it out as an Airbnb and earn between 1500-2500 per month. They are able to live for free and earn some serious cashflow with that short-term rental.

Best of luck!

Jeremy Vandermause | Shaffer Properties

Andres Bustamante · Answer

Hey Matt, I'd say East of I-35 is a great bet.Plenty of appreciation in those areas these past years. I myself am living in a House Hack I recently purchased in Pioneer Hills. It's a 4/3.5 and I'm cash flowing $300. I'd say the zip codes to focus on are 78744, 78747 and 78754.

Austin Martel · Answer

@Matt Riley I am trying to do the same thing in the same price range. I have been looking in the north Austin area and in Cedar Park.

Joe Scaparra · Answer

I am a big duplex fan and I think house hacking a duplex will make the best sense.  Here is a pending duplex, to use as an example in Austin that would work nicely.  The monthly payment with 20% down is just over $1500.  You could rent one side out for $1100 and one bedroom on your side for $500 and you would be building wealth and living free.  If you don't have 20% that would be ok you can buy with about 5% down and may or may not be out of pocket each month.  Look in Round Rock, Manor and Elgin as well.  Cheers.  https://www.realtor.com/reales...

Jon Klaus · Answer

There are lots of good ideas in this thread.  As to small multi-family possibly not appreciating as much as single family, consider an exit plan of converting units to condos, so they can be sold individually.  A few hundred dollars of attorneys’ fees could net many thousands.

Titus Capilnean · Answer

Following, since my wife and I are looking to do pretty much the same thing.

Anil Rathi · Answer

Looking to invest in duplex or 4-plex in surrounding areas to Austin, don’t mind rundown properties...any leads?

Danny Webber · Answer

I would not look for a location but rather look for a deal in any area you can live in.

Ryan Kelly · Answer

@Matt Riley One of the best benefits of house-hacking is it allows you to live where YOU want to live, versus having to choose only a select few areas. If you can make the numbers work in a better neighborhood, you will have a nicer living experience and great opportunities for resale. My clients in that price point are targeting homes up and down the east side as well as some of the closer suburbs like Pflugerville and Cedar Park.

Scott McCord · Answer

I second the Duplex theory from @Joe Scaparra. Especially here in Austin, multi-units are the best bet for cash-flow. Plus eventually, you'll probably want to have your own unit instead of roommates. Duplexes sometimes appreciate slightly less, but that depends on the area. I really love 4-plex due to the ability to use at Short Term Rental (COVID has killed that a bit right now) but there are some loopholes in the city permitting process that make 4-plex a great option and a great way to diversify with STR (Short Term Rental), long term rental, and your own unit as well. Price point is a little higher though.

First House Hack in Austin - Best General Areas?

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