Where in the Greater Austin area can you still get a cute home under 350. We have a lot of investor clients that are looking for this very thing they want a home that can make a great rental, three beds, two baths, fairly new condition and keeping the budget under 350 or as close to 300 or so as possible.
So here’s some of our top picks in that price range, you have a good amount of selection. If you go further south of Austin towards Kyle or San markets. San Marcus is more of a college town that you will get some people who are commuting to and from Austin or San Antonio, it has a lot of growth in that area. And prices have definitely appreciated over the years. Kyle is more of a suburb of Austin. And you do get a lot of people that commute from Kyle to downtown Austin for jobs is really only about 18 or so miles to get from Kyle to Austin. So it’s an attractive area for a lot of families that don’t want to pay the high Austin prices.
To give you an example, we just sold this home for one of our clients. It’s sold for just over 300,000 around 307. And the investor who bought it was able to rent it out for 2100 a month. So it’s really not that bad of a deal. So close to 300,000 just over 2000 a month in rent. Some other areas that we like if you’re willing to go west of Austin towards the Marble Falls area. Marble Falls is also seeing a lot of growth and development. We just helped a client buy a really cute custom home farmhouse that is only 350. That was about what they paid for it. similar size properties in that same neighborhood are renting anywhere from 2300 to 2500 a month.
Now, what’s awesome about this is this one was a new construction build from a small builder. A lot of the big name builders that do the masterplan communities and they’re selling track homes don’t allow investors to buy in Austin because of our housing shortage. There are a few exceptions like Dr. Horton and a few other builders that will occasionally allow a small number of investors. But if you can get an individual builder that isn’t limited by those restrictions, then that’s a great opportunity to get a brand new home. That means you’ve got a warranty no major repair issues for many years. And that can be a great opportunity for a rental. If you go further north of Austin, North Austin is where we see a lot of our job growth. A lot of our tech jobs are up on the north side of town. So areas like Hutto, Georgetown, some parts of Leander, although Leander is getting more expensive, but you still can get a home under the 350 range in those areas.
We like that area of Georgetown because a lot of the homes have lower tax rates. And that’s something to kind of keep in mind when you are looking for a rental is how higher the tax rates. So they can vary anywhere from 1.8 to over 3%. Generally, new construction masterplan communities have those higher tax rates. But not always, it just depends on if they had to create their own water district or if they already had access to utilities. But Georgetown does have a lot of communities where the property taxes are lower, which helps you out as a landlord if you’re calculating your net cash flow each month. So when we’re setting up a search to find rental properties, some of the criteria we look for is a minimum of at least three beds and two baths because those are generally easier to rent than something that’s only a two bedroom or a one bedroom.
Typically, our investors prefer houses over condos, because condos here usually have really high HOA fees. And again, that just eats up your monthly expenses. The other thing we look for is generally newer homes so that you’re not having to replace air conditioning and roof and all the appliances. So something that’s usually built within the last three or four years makes a great opportunity. And then finally, we can also search by tax rate is so just to weed out those ones that are at least you know, upper to 3% we can search for homes that are 2.5 and under, so that way you’re not paying so much on taxes and you can get a little bit better return on your investment.
The other thing we help our clients analyze is each neighborhood you know how many rentals are there? How much competition is there? Are they sitting for a long time or are rentals moving pretty quickly. So all those things can kind of factor in to whether or not a home makes a great investment opera tunity but Austin, most people are still excited to invest here because we’re also looking at overall price appreciation, not just the return on rent, but how much is this home going to grow over time. I know that last year our home values went down. Right now everything is almost at a discount, we’ve kind of hit the rock bottom of where the prices are, and they’re starting to trend upward.
So we’re getting a lot of investors who are wanting to buy while the market is still low, they can scoop up a rental on one of those areas that has a lot of growth and a chance of appreciation, hold it for a few years long term, and where they’re really wanting to see that return is when they can sell it in the future at that higher value. If you have questions about renting in Austin and want to explore it in more detail, contact us.
