Austin condos - Rental Potential

[Michael Bruns]

Hello BP, I am a first time home buyer that was hoping to buy a house in south/east Austin that would be my primary residence but something that i could turn into a rental property several years down the road. Now that it is impossible to buy a home in Austin for anything under 400k i have turned to look at condos which of course have HOA fees usually listed around 300$. Has anyone here held condos for rentals long term and is it even worth trying to rent out with HOA fees? I am looking around the congress/lamar area. Lastly, are there any wholesalers here that have any properties to sell for under 350k? thanks

[Andrew Freed]

@Michael Bruns - I own a condo that I currently rent out and make a few hundred a month. It was previously my primary residence that I converted to a rental. That is in the Boston market though, but Austin and the Boston market have similar industries. Regarding if its worth it, it could absolutely be worth it however you need to do your due diligence up front. Some of the questions you need to ask yourself are the following:

1. Is the HOA well run? Does it have decent reserves? If a large capital project needed to occur, could it cover it with its reserve or would it have to complete a special assessment?

2. Is the HOA landlord friendly? Some HOAs do not allow you to even rent. Review the condo docs prior to purchasing. Also when the threshold of renters vs landlord goes over a certain point, it restricts financing options hence lowers your buyer pool when you sell the place.

3. Do you want to become a Trustee? I became a trustee of my condo association and it helps in having an investor voice at the table. You know, gotta project your assets.

If you do your due diligence and the numbers work, I say go for it. Austin is a fantastic market and you can't go wrong with it in the long term.