Tips on House Hacking in Austin

[Ali Soomar]

Hey everyone!

I recently graduated and I am starting work in Austin soon. Instead of paying rent and throwing that money out the window, I really want to get into house hacking as an alternative to start my REI journey. I feel like there is no better time than now to invest in Austin, but I have a couple questions about starting out.

Initially I wanted to purchase a used home in Austin in neighborhoods where there are signs of renovations going on, which would allow me to scoop up an old trashy property and put some money into it to gain immediate value. Then I would proceed to renting out the individual rooms. However, with this method, there is a lot more money needed and I'm not sure how intense the renovation process will be. Additionally, I found it really hard to find a relatively cheap property with at least 3 bedrooms while also being cashflow positive.

My parents suggested purchasing a new home instead, and I thought this was out of question because I thought there wasn't any new homes being developed in high demand areas where I could make a decent amount from renting rooms. However, I came across a new area that is being developed in Southeast Austin. Currently, there isn't much going on in the area, but I could purchase a much larger house (2600+ sqft) with more rooms (4 bedrooms), and a significantly cheaper price than the rest of Austin. This area is super close to upcoming projects like Velocity and Austin Green, so I think it has insane potential! I know I might not be able to get people to rent out rooms immediately, but I know that once the development starts happening, it should be super easy and the rent I could charge would be a lot higher. Also, I would expect the house to appreciate insanely. I'm completely fine if I can't rent out immediately because I will still be able to cover the mortgage myself, but I definitely do not want to be in a situation where 2-3 years from now I won't be able to find people to rent to.

I was just wondering if this opportunity is too good to be true...  or if there's something I am missing... or if I'm miscalculating the risk that's involved with doing this? I would also love to hear more about what anyone else thinks about the future projects/development going on in Southeast Austin and the best way to go about taking advantage of this opportunity before it's too late. Additionally, I would love to get some more advice from anyone else that has house hacked in Austin and what's worked for you!

[Suzy Sevier]

@Ali Soomar Hi Ali, if you wanted to try to purchase a used home, you could look into a purchase plus improvements mortgage. If there is not a lot going on in the area where the new home is purchased, I would check into stats to see how many people are renting in that area.