8 Next Best Places in Austin to Buy an Investment Property

Austin, Texas has one of the best real estate markets in the nation. The strong job market, natural outdoor beauty, and laid-back lifestyle entice renters and homeowners to flock to Lone Star State.

What makes Austin the best place to buy investment properties? Why should real estate investors buy rental properties in Austin? Is the Austin real estate market worth the investment?

We'll be answering your questions on why you should invest in the Austin housing market and the top 8 next best places to invest in Austin, TX.

Is Austin a good place to invest?

The Austin economy continues to be based strongly on technology and high learning. It earned the nickname Silicon Hills due to the number of tech companies from Silicon Valley building their campuses in the area as well as the growing number of tech startups.

Austin has made its way to the top of the list of the best cities for job growth. Several companies are expanding and migrating their headquarters and operations to Austin investing millions in the region including the largest manufacturing and tech companies in Hutto (Samsung), Del Valle,  Cedar Creek,  Smithville (Tesla), Round Rock, Cedar Park, Leander, Pflugerville (close to the tech companies in the domain, and Lockhart (close to the possible new Micron micro-chip plant).

In August 2022, the Austin-Round Rock area’s unemployment rate was 3.1% which is lower than the national average of 4.0%. The city has also received a high mark when it comes to work-life balance and competitive salaries. Millennials, born in 1981-1996, have the highest percentage of relocating to Austin. With a large segment of the millennial population preferring to rent, this represents a favorable condition for investors. 

Is Austin a good rental market?

Austin’s rental market is one of the fastest-growing in the state of Texas. A growing population means housing demand. Austin is among the fastest-growing metro areas in the U.S. The population growth is expected to continue for the next 14 years.

Since the last decade, Austin MSA has grown by an average of 55,500 people per year (U.S. Census Bureau Annual Population Estimates Program). The majority of the migration is domestic from different metros in Texas; Houston, Dallas, and San Antonio followed by New York, California, and Florida. According to the Austin Chamber, Austin had a 33.0% increase in population by the end of 2020 and remains to be one of the top destinations for migrating talent.

Which areas of Austin are best to invest in?

With abundant job opportunities, a variety of housing options, and over 17,000 acres of parkland, Austin is a great place for real estate investing. Home values and the cost of living may have been steadily increasing over the past several years, and the city is expected to continue growing in popularity with more than 250 companies looking to expand or move their operations to Austin, TX.

1. Hutto

Recognized as the "Top Place in Texas to Raise a Family", Hutto is a small town located northeast of Austin, 30 miles from downtown Austin. With a population of 30,150 as of 2022, Hutto has a pleasant, welcoming atmosphere and provides its residents quick access to amenities located in its surrounding areas. There are over 20 subdivisions in Hutto including Hutto Square, the Enclave at Brushy Creek, and the Park at Brushy Creek.

The charming town is part of the regional tech hub with proximity to the Samsung Austin Semiconductor. Tech firm Applied Materials is considering a site in Hutto for a new $2.4 billion research and development facility.

As of August 2022, the average home value in Hutto is $454,000 while the average apartment rent is $1,700.

2. Del Valle

Dell Valle is a small town and suburb located 7 miles southeast of Austin in Travis County. The suburb is known for being home to the Austin-Bergstrom International Airport, Circuit of Americas, the Austin360 Amphitheater, and Tesla's Gigafactory. Over 28,000 residents live in Del Valle.

In 2020, automotive giant Tesla announced its plans to build the Gigafactory in Del Valle, TX which is expected to bring in 5,000 jobs. By December 2021, Musk posted that Giga Texas is a $10B investment over time, generating at least 20,000 direct and 100,000 indirect jobs. The Texas Gigafactory officially opened in April 2022.

Del Valle continues to grow in terms of infrastructure and its economy. With its close distance to downtown Austin, major highways, and commute accessibility, residents in the area can conveniently get around Del Valle and its neighboring cities.

The average home value in Del Valle is $375,000 while the average rent for an apartment is $1,530 as of August 2022.

3. Cedar Creek

Cedar Creek is an unincorporated community located 11 miles west of Bastrop and 22 miles from downtown Austin. Cedar Creek has a population of 3,400 people and has proximity to Giga Texas in Del Valle. You can find several restaurants, retail stores, and coffee shops in downtown Bastrop which is just a few minutes away from Cedar Creek.

There are also green spaces and attractions in Cedar Park for families including a privately-owned wildlife park, Capital of Texas Zoo, The Dinosaur Park, and the McKinney Roughs Nature Park. The average home value in Cedar Creek is $613,000.

4. Smithville

Smithville is a charming rural town with big city amenities situated in Bastrop County, forty miles from downtown Austin. Smithville is home to Bastrop County's only airport, full-service hospital, and recycling center.

The growing city has a population of 4,500 with about two-thirds of Smithville's households owning their homes. Residents living in the area have access to the Colorado river, seven parks, community events, and festivals.

Homes in Smithville have an average home value of $381,000 while the average rent is $695. For investors targeting newcomers to Austin's Giga Texas, Smithville and Cedar Creek are two of the best places to buy investment properties.

5. Lockhart

Conveniently located 30 miles from downtown Austin, Lockhart is known as the Barbecue Capital of Texas. Besides the recognition Lockhart gets because of its popular barbecue delicacies, the Austin Chamber describes Lockhart as a town rich in history and ripe for growth. With its short distance from downtown, Lockhart offers a business-friendly environment with new investments and businesses calling the suburb their new home.

In August 2022, Idaho-based Micron Technology is considering a site near Lockhart to build their $80B semiconductor factory. This opportunity makes Lockhart a great location for real estate investment with more jobs being offered near the area.

Lockhart has a population of over 15,000. Investors can find a mix of older neighborhoods including historic homes and new subdivisions. The average home value in Lockhart is $260,000 while the average rent for an apartment is $1,031.

6. Dripping Springs

Photo by Thomas Brushel on Unsplash

Dripping Springs has been an oasis for families outside the Austin area. A small-town feel with big-city amenities. Dripping Springs is located about 40 minutes to the west of Austin and is home to just over 4,600 residents. The region is well-known for being the wedding capital of Texas, its distilleries, and the gorgeous views of Hill County.

Exchange "I do's" at the wedding capital of the nation, Dripping Springs. With over 36 wedding venues within a 17-mile radius, Dripping Springs is the ideal location for weddings. Many couples visit from everywhere to witness the true beauty of the Hill County from breathtaking backdrops and culinary art, Dripping Springs is proud to be referred to as the "Wedding Capital of Texas".

Dripping Springs, Texas is also a premier destination for craft distilling. These distilleries in the region only use hand-selected ingredients. You need to make distilleries in Dripping Springs a part of your next adventure if you are looking to get boozy in the Hill Country! Some well-known distilleries are Dripping Springs Distilling, Deep Eddy Vodka, Treaty Oak Distilling, Frog Pond Distilling, Desert Door Texas Sotol, and Stinson Distilling. 

7. University of Texas - Austin

Image by Tony Webster, Transferred from Flickr via Flickr2Commons

Austin is home to the University of Texas - Austin, which is a major asset in the area with a population of over 51,991 in 2021. There are about 13 neighborhoods that are within five miles of UT Austin. The huge student population influences the neighborhood environment and the local businesses around it. It is also one of the best walkable neighborhoods in Austin.

West Campus is the heart of off-campus living with a population of more than 17,000 people, mostly college students, are living in this neighborhood. Houses in this area are the most sought-after with developments of new condos and apartments in the neighborhood with houses located in North Campus and Hyde Park being more abundant which are easily rented out mostly by the student population which makes it one of the best places to invest in Austin.

8. North Austin Suburbs

Round Rock

What once was a sleepy suburb is now one of the coolest in America with a population of over 128,000. Round Rock, Texas, about 20 miles from Austin, is home to major employers from tech to healthcare such as Dell, Emerson, TECO-Westinghouse, Hospira, and the new Apple Campus.

The city is becoming a major center for economic growth in Central Texas. There's no shortage of single-family homes in Round Rock. The area is primarily composed of communities with multi-family and single-family homes with 3-4 bedrooms ideal for real estate investors who are in search of a market with a strong presence of single-family homes.

A wide variety of home styles can be found in the area; from homes built in the 70s and 80s that were recently renovated to new large-built homes. Round Rock is nestled in the eastern edge of the Texas Hill Country which offers abundant outdoor experiences within the stunning environment. Some of the best neighborhoods in Round Rock are Teravista, Forest Creek, and Behrens Ranch while its neighboring suburbs are Cedar Park, Pflugerville, Hutto, and Georgetown.

As of August 2022, the median list price in Round Rock, TX is $540,000 while the median list price per square foot is $246.54.

Cedar Park

Cedar Park has all the advantages when it comes to city living and the tranquil green spaces. Located 17 miles from downtown Austin, Cedar Park is a suburb with a unique charm and offers plenty of opportunities for everyone.

With a population estimate of 79,000, residents living in Cedar Park has easy access to greenbelt locations, neighborhood amenities, golf courses, top-rated school, and several employers located in North Austin. Cedar Park is one of Austin's largest suburbs with plenty of single-family homes perfect for real estate investors who target families.

The median list price in Cedar Park is $640,000 and the price per square foot is at $268.31 as of August 2022 while the average apartment rent in the area is $1,475.

Pflugerville

Home to over 68,000 residents, Pflugerville is one of Austin-area's fast-growing suburbs. Pflugerville is the third most diverse suburb in Austin and the fifth best city in Texas. The city's park system is composed of more than 40 miles of hike and bike trails and 1,400 acres of green spaces. Pflugerville offers an abundance of one- or two-story, single-family homes with most homes owned and about 25% of the being rented.

The median list price for homes in Pflugerville was $517,000 in August 2022 while the average rent for an apartment is $1,400.

Leander

Leander is one of today's fastest-growing cities in the United States. It has grown over the years with the population rising to over 65,000. The highly-rated Leander Independent School District, accessibility to many employers in north Austin, and big city amenities are some of the reasons people flock to the area.

Homebuyers and investors can expect a feel of a modern suburb with subdivisions composed of one- to two-story homes. The average home value in Leander is $630,000 while the average apartment rent is $1,800.

The growing interest in Austin is influenced by the presence of employers, top-rated schools, amenities, and the pleasant family environment that contributes to the property value.

Click here to speak to a consultant to know more about the best places to invest in Austin or search for Austin Investment Properties here.