Househacking in Austin, TX

Prices in Austin have skyrocketed recently. In fact we have seen price appreciation of over 40% in the past year. This is making it increasingly more difficult to buy a home in the Austin area, especially if you're a first time buyer with a lower budget. All the more reason to Househack!

Househacking can allow you to afford more, save more and build a bigger real estate portfolio faster, even if you live in a rapidly growing market like Austin, TX. You might be thinking, if prices are growing so quickly why would I want to househack? Isn't it hard to buy a househack right now? The answer is no, it's not any harder to househack today than it was in the past for a few specific reasons.

1. 1. Interest rates are crazy low. I just locked in a 2.5% interest rate on an FHA mortgage. These low rates push payments down even when prices are going up.

1. 2. Rents are going up! Rising rents helps the numbers work on a househack. Remember the goal is to cashflow when you move out and you want to run numbers on a property before you buy it. Rising rents helps make the numbers easier.

1. 3. Short and medium term rentals are on fire in Austin. This is a great way to pump up the income that will in turn allow you to live for even less. Even when you move out you can continue to rent on a monthly basis with current STR (short term rental) laws.

The main goals of househacking are to live for less, build equity and cashflow when you move out. Make sure you're analyzing properties completely to understand how this looks. Just because it doesn't meet the 1% rule doesn't mean it isn't a great investment. Factors like interest rates change this completely.

When you're househacking, the rents can help you qualify for more when buying a multi unit and can cover the mortgage and improve your DTI when you move out with single or multi family. This can help you hold onto these assets over a long period of time while you take care of the property and cash in on the massive growth Austin is experiencing with all of the people and businesses moving here. Personally I'm buying as much real estate as I can that makes sense in Austin for househacking by doing this every year or so. It's worked out well and I have a long term hold plan so I sleep well at night being fairly certain the Austin of 10 years from now will be more expensive than it is today. I'm not solely focused on making tons of cashflow with my househacks, but more so focused on acquiring real estate in a market that has huge growth potential to hold long term. Of course, the numbers always have to work for me to make the investment!