New to Real Estate and Not Sure If Austin is a Good Idea

[Kaya Spicer]

First time posting; hopefully, I am doing this correctly.

So I am interested in investing in Texas, specifically Austin, Dallas, SA, and Houston. I am a newbie, no properties yet. I have saved about 25k and been pre-approved for 430K and will be using the VA loan for my first purchase of owner occupancy. So having read several books, listened to podcasts, and attended a few REI webinars, I felt ready to begin. Then I came to Austin to purchase last week. I have been looking at houses in the area between 350K-400K. I was outbid on a few places, and I understand that the house in the Austin area is going for 15-20 percent over the asking price. I am clutching my coins, feeling afraid and doubting myself. Anyway, I wanted to get the opinion of someone with more experience as to whether this Austin market is a good place to start?

We live in the DMV.

Kaya and Eric

[Joshua Noth]

Welcome to BP @Kaya Spicer!

No need for me to belabor the point, Austin is incredibly competitive and that's easy to see (and experience as you recently have).  The city and surrounding areas show great potential, but in your case, it looks like most of your chips would be on potential appreciation.  @Victor Steffen just posted a very helpful analysis of rent-price ratios in the Austin area, and while that can be "disheartening", know that is not why SO many people invest in the area - they invest for appreciation, which many areas show double digit increases.  Even if you don't see the GLORIOUS 2500 in cash flow a year, your equity could potentially increase 10 times that. Obviously no guarantees, but there is plenty of data supporting it and firsthand accounts of investors achieving that.

For your situation, I would focus on 2 things: 1) Act quick, but don't hurry; 2) See how far you're willing to go.  1) If a house meets your criteria, it all adds up, be responsive.  Don't make an irrational or uninformed decision, but just be ready to act quick, making sure you have all your ducks in a row.  2) If you know you want to stay in the northern suburbs, then perfect! But, if you are willing to expand your search further, you may see more luck - just find how far is "too far" for you.