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Austin, Texas, USA downtown skyline.

Austin Real Estate Investing – What to Expect in 2020

Beginning in the early 2000s with the Austin tech boom, and really since coming out of the 2007 recession, the Austin real estate market has been one of the best places to invest in real estate. And there are no signs of that changing in 2020. 

With major tech players continuing to lease hundreds of thousands of square space all over Austin, government investment moving into Austin and virtually zero unemployment, we’re likely to see buying and equity maintain a steady trajectory of growth. However, that could also mean some potentially negative impacts on property taxes, affordable housing, and even buying inventory. 

According to a survey conducted by Zillow and Pulsenomics, Texas hosts 11 out of the 14 housing markets expected to outperform in 2020, with Austin taking the number one spot at an 83% positive outcome rating. In the survey, economists and real estate experts predicted that Austin home values would outperform the nation’s average, 2.8%, in 2020. That’s huge! And it’s happening all over Austin, particularly in those areas where tech giants are moving in. 

WHAT’S HAPPENING IN AUSTIN

In 2019, according to the Austin Business Journal, Google Inc. leased a whopping 873,000 square feet – 100% of two office buildings under construction, one downtown and one on the east side. That’s room for about 5,700 more workers. Amazon.com Inc. leased about 245,000 square feet of office space at Domain 10. The online retail giant confirmed it will fill the space with 1,400 employees, one of many big tech-driven changes for Austin’s north side. Other major companies like Visa Inc., Allergan PLC, and Indeed Inc. each leased more than 100,000 square feet, as did the Teacher Retirement System of Texas

Apple Inc. also made an announcement in November 2019, that it had officially broken ground on it’s new $1Billion North Austin campus, which is expected to house 5,000 employees at its opening in 2022, with the capacity to eventually fit 15,000 people. Overall, this means A LOT more jobs are to come, which will not only drive the local economy but will radically change the housing market. 

However, despite all of these tech giants moving in, it is worth noting that there will be some physical limitations to where companies can continue to build and not all companies are created equal in terms of ability to build in prime locations. Traditional geographic barriers to growth such as the aquifer recharge zone, International Highway 35, and Austin traffic in general, are a few noteworthy construction obstacles. And given that, we predict that a good portion of development will also likely be near new toll roads and along IH35 where workers will be able to afford to live and employers can build at a cheaper rate. 

INVESTOR FOCUS

So what does this all mean for investors? Well, it means that in 2020 we will have to be more strategic and purposeful than ever with our investment buying and maintenance.

Let’s dig into what being strategic and purposeful means a bit. Think about your long-term goals with your investments and not only what your expected ROI (return on investment) might be, but what kind of experience you want to have with your investments. Some questions to ask yourself might be: What are the best neighborhoods to buy in the 2020 Austin housing market? What should I look for when buying a rental property? Is that property going to need a lot to maintain it? 

Do you already own investment properties in Austin? Well, you might also want to think about what it means to get your property ready for market, how to appropriately price your rental, how to get the best tenant, how to maintain that property, and best practices to keep vacancy low

Does anyone really believe that if you have a well-maintained home that’s priced appropriately, it will not rent in Austin? As an Austin property manager, we can tell you that our homes are being shown on weekends and nights. Actually, in the second half of 2019, we received more than 5 calls per day after hours and on weekends for showings. Every day! That’s a lot of demand. 

Though there may be some obstacles on the horizon for the Austin Real Estate market, the fact still remains that the market is huge and isn’t slowing down. That means there’s no time like the present to strategize your investment journey. 1836 Property Management has a robust system in place to manage investment properties so that you can focus your time elsewhere. We partner with our investors to make sure their tenants are taken care of, their property is always well maintained and that their expected ROI is on a pathway to success. 

Interested in getting a FREE performance analysis of your current real estate investment? Simply fill out this form with your property data and one of our Senior Property Managers will get in touch with you to deliver the insights!

Ready to partner with us today? Give us a call (512-994-4332) or submit an inquiry at our contact page and someone from our team will get in touch with you to begin the process!

 


By: Kayla Gonzales – Marketing Manager