All Forum Posts by: Ridham Shah

Yeah, the housing prices have gone up quite a bit over the past year, as with many parts of the country as people look for larger homes to suit their WFH needs. I have heard that builders are not selling new homes to investors. I suspect there are opportunities for cash flow positive investments in older homes all over Austin.  

Thanks @Joe Scaparra for your detailed analysis, and everyone for their perspectives. Being an out of state investor, I am looking to invest in Austin real-estate for the long run (~5-10 yrs) with the expectation that rent, equity and property price appreciation will provide a positive return. My hypothesis is that Austin real estate has greater upside (% wise) compared to several other parts of the US due to continued tech boom and migration of ppl from CA. Granted older/distressed homes might provide a better ROI but I assume it is a challenge to identify and fix such a property.

Thanks to everyone who responded with their perspectives. The way I am thinking about the investment is as follows:

Total cost of ownership ~ $1850/month (mortgage+interest+HOA+property tax+1 month unoccupancy + 70% property mgmt fees)

Expected rent: $1800/month. New home so little to no maintenance costs in first 2-3 yrs

Even if rents & property prices remain flat (low probability), the increase in equity itself makes this a viable investment. Based on my calculations, I am looking at ~7% return (equity increase) on investment (downpayment). 

What am I missing?

I am considering one of the new homes in the Vistas at Austin as an investment property. There are 500+ new homes planned in the area, as well as apartments and commercial development at goodnight ranch across the road. This could lead to an oversupply of rental homes keeping the rents down, but I am told there is tremendous demand. Furthermore, the proximity to downtown (~15 min) and proposed Tesla gigafactory (~20 min) seem enticing. 

Looking to buy a new SFH ~1800sqft for ~$300K. Worth it?