North Austin (existing home) vs East Austin (new home)

[Dhaval A Pandya]

Hi experts,

This is my first time requesting info. I am out of state in CA looking to buy a SFH 3/2 in greater Austin for rental investment. Prices in North Austin are increasing quite a bit due to tech hub and existing homes getting overbid. Whereas there are some new home options in East Austin which carry the Tesla attraction. Thinking what could be a good cash flow decision between:

1. Buying a existing but new (2010 or later) home in N Austin (say Leander, RR, Hutto) for about 240-260K or - higher prices, but also higher rents

2.New home round $270-280K but in East or South Austin - new home so immediate maintenance headaches but potentially lower rent than North

Any advice is greatly appreciated. thanks

Dhaval

[Ryan Kelly]

@Dhaval A Pandya Your challenge with new construction is the vast majority of new home builders in the Austin area are not selling to investors at this time. The demand is simply too high and they are prioritizing primary homeowners. They are also nearly sold out of all current inventory, so there are waitlists and lotteries with a good number of builders for future lots, with construction on that home not beginning until 3-6 months from now. This means you wouldn't get the keys until 2022. The high demand is far outpacing supply in Austin, both for resale homes and new construction. This is why you are seeing the huge spike in resale home prices, which I predict will continue through the spring and possibly the summer as well.