Pros and Cons: Austin Residential Investment Property
If you’re looking to start building your real estate portfolio in Austin, residential investment property is a great way to get into the game. Imagine real estate investing as a game of Monopoly. Most people start off with a condo or home, work up to a duplex or fourplex, launch into smaller apartment and then into the larger complexes. While most aren’t in a position to start off with taking on so much risk, residential real estate is a great way to get started, learn how to manage real estate and build up your knowledge as you build up your portfolio.
Based on our experience, here are the pros and cons for purchasing Residential Investment Property in Austin.
Condominium
Pros
1. Lower purchase price than a home in the area
2. Maintenance is typically included in the HOA
3. More amenities than a home or duplex, which may result in a little higher rental price
Cons
1. HOA fees impact your cash flow
2. You only owner a percentage of the interest in the property
3. Resale prices on condominiums tend to be lower when there are more units in the complex
Search Investment Condos in Central Austin Under
Single Family Home
Pros
1. Easiest to resell since single family homes tend to have higher demand
2. Single family homes are typically surrounded by other owner occupied single family homes
3. Since there is more demand for single family homes, you tend to see stronger appreciation rates
Cons
1. There is only one unit generating rental income
2. Compared to duplexes or fourplexes, there is no way to offset vacancy
Search Investment Homes in Central Austin Under
Duplexes
Pros
1. Duplexes in Austin are typically close to single family neighborhoods, so they offer the same community amenities and school districts
2. Less risk than a fourplex, but provides more cash flow than a single family home
3. Since they tend to be mixed in with single family homes, and are a close alternative for living, has the potential to follow single family appreciation trends
Cons
1. Majority of duplex buyers are investors which could result in a smaller pool of buyers when you go to resell the property
Search Investment Duplexes and Fourplexes in Austin
Fourplexes
Pros
1. Generates greater cash flow than other types of properties
2. Because there are four units, you minimize the financial impact when their is a vacancy
3.
Cons
1. Tends to be a higher risk property and lenders require 25% down
2. More upkeep and tenant dammages since there are more occupants
3. Less appreciation since fourplexes are in rental communities
This is really helpful. I like the links to the specific property types. Thanks.
April 22, 2011 by Julie