UT Student needs to buy a property in Austin TX

[Li-Chen Chang]

Hi everyone!  My first time post here but really looking for your help! I joined BiggerPockets to look for investment deal for myself, however, my son just got admitted to UT Austin, and he loved there!  We are out of state and learned that we can establish TX residency after living in state for 12 months and he needs to purchase a property with sole ownership under his name (he is 18 years old) and established as his primary address.  We have about $200K refinanced to invest a property in TX (will retire in TX in few year), and if use for my son, we are unsure if he can get a loan so can't use that as down payment.  Also think it will be good to use the property as short-term rental to rent out so he can live in the dorm during school year and live in the condo during break (housing contract only offer for 9 months). I have few questions:

1. does anyone know or help out of state students invest in Texas?

2. is there still house/condo property in Austin around $200K? (I found few from BiggerPockets deal finder but they were 3 years old)

3. is short term rental easily set up (any management company to work with)? 

Sorry to have so many questions... appreciate any help or advise in advance!

[Ryan Kelly]

@Li-Chen Chang there is a lot to unpack with your questions so I'll do my best to give you a head start. In the city limits of Austin currently, there are only 3 condos listed at or just below $200k, which will likely sell over that price. They are either a studio or a 1-bedroom condo. Prices do tend to be a bit more affordable for smaller, older condos near UT as those tend to trade between parents buying small condos for their children while they are students. For a decent 1-bedroom unit, I would expect to pay between $225k-$300k. Since your child doesn't currently have a lot of income, it may be hard for him to qualify for a loan. You have the option to co-purchase with him so he can get his first property. 

Regarding short-term rentals, the city of Austin has a licensing program and you will need to acquire a license to operate an STR. You will pay an annual fee to hold the license and they will collect hotel occupancy tax as well. In addition, if you purchase a condo, you will need to review the HOA docs carefully to see if they will allow STRs in the building. Quite often they may either have a ban or a limit on how many units can offer STRs. I hope this gives you a good start. Happy to chat if you want more detail.