Austin (neighborhoods with easy access to The Domain (2nd downtown))

realestate

#1

Some old threads:
Tech firms heading to Austin
For rent < for sale in Austin
Austin and Dallas/ Plano Properties
Buy or rent in Austin
Austin beats SF by 42%

Facebook to eat up big chunk of Austin’s second downtown, sources say, previously announced, some update.

In addition to Amazon and HomeAway, Facebook is surrounded by a bounty of other tech companies at The Domain ranging from software maker Accruent LLC to prosthetics-limbs manufacturer Ottobock to Indeed Inc. — the job-placement website that has leased all 310,000 square feet of Domain Tower on the south side of the development. The area is quickly becoming Austin’s second urban core, with lots of shops, restaurants and bars as well as multiple office tower and hundreds of apartments, plus a Major League Soccer stadium proposed just to the south.


#2

FB single-handedly kickstarted the bull run in South Bay in early 2012. Look like FB is at it again, this time pushing Austin prices to new highs. Two zip codes well known for techies are now VERY HOT.

19%20AM


#3

How much is rent?


#4

You can use zillow to get an idea, plus minus $100 :slight_smile: How much you can get depends on which month your property is marketing in. Apr-Jul are the best months.

78759, one SFH bought for $230k+ 4+ years ago is renting out at $1625. Fairly old house, slightly updated kitchen and bathrooms. Rest original condition. About 1400sqft, 10,000 sqft lot. One story. Rent out without fridge, washer or dryer… cheap house no need to provide these stuffs.

There are quite a few old houses costing $200-$250s in good school neighborhood or near Job centers, original condition, very good for flippers. I think need min $20k-$30k to rehab, guessing only.


#5

How much is that same house worth today?


#6

In comparison, I bought a 1900sf 4/2 In SLT for $275k 4 years ago. Starting rent $1700. Currently rents for $2k. Market rate is $2200. Same tenant, just raise rent $100/m each year…7.4 cap
Zillow value $434k…Would still be a 5cap at current price and market rent…Investors are paying 4 caps and above in Tahoe for sfhs and duplexes…


#7

$325k-$335k by zillow-redfin. Assessed for property tax purposes $330k.


#8

Well that’s about the same as my house in Stockton: before/after value and current rent. Maybe your Austin house will have better appreciation going forward? Don’t know.


#9

Somehow I think market is fairly efficient. If there is huge difference in return, arbitrage would come in to take out those differences. If the same return, Austin is better than Stockton in terms of tenant profile, right? The acid test is will you live in Stockton or Austin? Btw, that is not the best yield that I have but are the neighborhoods that tech guys love. Got $2250 rent for a $285k SFH elsewhere.


#10

Actually I’d live in Stockton because it’s commutable to Bay Area. There are very nice areas in Stockton. Tenant wise I don’t know because it’s managed by PM. Same set of tenants for the last 5 years.


#11

Tahoe offers better cash flow, IRR and is more desirable than either Stockton or Austin. The demographic of retired people that can live anywhere is much larger than tech employees… There are other retirement vacation dream locations like Gold country, San Diego, Vegas, Arizona…But Tahoe is perfect for year round recreation.


#12

Reno 6-plex. Claims to fetch 7-cap. Asking 575K.


#13

manch & wuqijun,

Considering getting a foothold in Austin?
Tomato is considering but as usual NATO (no action talk only).
Recall Austin RE barely barge during the financial crisis

History might rhyme i.e. we may have RE slowdown in SFBA but RE in Austin continues to boom. Cost of operating in SFBA are too high for employers and cost of housing are too high for employees, so there is a clear but slow migration to other places. Austin is one of those places. Everything takes time. Prices accelerate in SFBA only from 1990s, before that prices are appreciating at a good rate.


#15

Texas prices dropped 33% in the 1980s…

https://money.usnews.com/money/blogs/the-home-front/2009/06/19/americas-4-nastiest-regional-housing-busts-2


#16

How come you always quote events happened long long long time ago? Investment is not about the past. Is about the future. Is a judgement call of the future. No point in debating, you either buy the thesis or you don’t. Long long long time ago, SV is an orchard. Remember RE is fairly local, although Austin is in Texas, it can be quite different to Texas’ overall picture. Even in Austin, some neighborhoods and suburbs are not doing well. I am specifically talking about neighborhoods near The Domain.

Edit: Glance through the article. It specifically mentioned Dallas and Houston, most affected by the oil industry. Austin is a lot more diverse and is not affected much by the oil industry. The neighborhoods I am focussing in are affected by the growth of The Domain and continued increased presence by the tech industry.


#17

History is reality. Predictions of the future are fantasy…Most likely scenario is recession in 2020…But nobody knows…Those who don’t learn from the past are doomed to repeat past mistakes .

So far only you and I have invested in Texas and this forum…I made good money developing self storage there.
Built new took the value add profit of 50% in one year and sold…Buying and holding is better in California…IRR IS THE KEY.
Currently getting a 30% IRR on New construction in Arizona…Cant get that holding on to sfhs anywhere.
In most of the US the best profit and highest IRR is developing and selling…Buy and hold strategy offers lower returns except in high appreciation areas like NYC, LA and the BA.


#18

Wrong. Myo has bought in Austin too, and similar neighborhoods because both of us are tech-oriented. Your knowledge is completely outdated as I have mentioned long long ago and now again. Your investment is in Sugarland, an area affected by oil industry. Hence the fundamentals in focus are different. Also, your knowledge of tech industry is zilch. Remember, what you know I don’t know, what I know you don’t know. So is silly for me (and many techies) to adopt your approach. Is wiser to invest based on what you know, then to base on some others’ knowledge and wisdom.

History is past, can’t act upon. We can only act on what are happening on the ground now and make some assessment of the future. Your assessment is totally based on past history. Past history said SV is an orchard, not good.

Btw, can you don’t corrupt this thread with other info not relating to The Domain neighborhoods. This is a narrow topic, not a generic topic on investment, not a generic topic on RE investment in Texas, not a discussion on economy, not a discussion on your RE investment experience, …


#19

I invested in Fort Worth, Sugarland and South of Huston. I have several friends that have invested all over Texas. Most owned 100plus units . One has built spec homes in Austin. And currently owns several strip malls he built there. 7 caps

My knowledge on Texas is extensive. My mother is from Texarkana.
People can make there own choices. But buying and holding sfhs is for amateurs. A recent investment phenomenon trend that will pass like many trends.


#20

Thank you for sharing.


#21

What do you expect is the total return? Appreciation + rent - taxes and repair.