Different Types of Investment Properties in Austin

Investing in Austin Real EstateAustin's real estate investment scene is red hot right now, and with the recent announcement of Oracle's corporate headquarters moving here, it's likely to stay that way for a while. Our site caters to investors, so we get a decent amount of people registering that are interested in investing in Austin. Below are the different investment properties that investors in Austin can choose from that we also recommend and help facilitate. It's important to note that an investment play in Austin will be mostly an appreciation play in this current market. We recommend that an investor have at least 30% to put down on a property and $30,000 in reserves.

For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.

Types of Austin Investment Properties

Here's a look at some of the different types of investment properties you can find in Austin.

Single-family Resale Home

These range in price based on location and school districts. The older and more outdated the property, the better it will be to investors in most cases. It's standard for single-family homes to lease at 12 months or more, and that's why we see a demand for corporate or transitional housing, which is listed below.

Vacation Rental Properties

In the city of Austin, properties that are bought to rent out as a vacation rental are not allowed for single-family homes. Vacation rentals are also known as short-term rentals. The city of Austin defines short-term rentals as anything under 30 days. Condo buildings such as Natiivo Austin are exempt from this, but nearly every single building (except one) has restrictions on this. Properties located outside the city of Austin do not have to abide by these rules, but they may be subject to HOA restrictions. This being said, homes outside of Austin will not get as much demand for vacation rentals as homes that are closer in. The exceptions are areas in Dripping Springs and between, as well as homes within a short distance of Fitzhugh Road, which has dozens of breweries and liquor distilleries.

Multi-family residential properties

Multi-family residential properties are homes with 2-4 units that are classified as residential because they don't have 5 units and, as such, qualify for residential financing, which offers more attractive terms than a commercial loan.

  • Duplexes - Austin has plenty of duplexes in and around the city, and that is a favorable product because the tenants tend to stay in them longer and treat them more like a home because they have a yard and more of a feel of a home.
  • Triplexes - Much like duplexes, triplexes tend to be taken care of better. Unfortunately, Austin duplexes are very rare as there were not many built, and we very rarely see a triplex listing on the MLS or as an off-market listing.
  • Fourplexes - Also known as a quadplex. There are plenty of fourplexes in Austin, but they are, in my expert opinion, not as easy to manage as duplexes. In most cases, they are owned by out-of-state investors that haven't seen or visited the property in many years, and as such, there tends to be deferred maintenance. There are exceptions to this, but I would be cautious when looking at a fourplex listing in Austin. Even if you find a fourplex that is in excellent shape, it would be prudent to drive the street and see what condition the neighboring properties are in.


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Corporate Housing

Much like short-term rentals, these are temporary housing that investors can lease for more than 30 days and at a higher rent. There is a larger demand for corporate or transitional housing now than ever before. As people move to Austin and see the lack of supply, many want to use a furnished rental for more than 30 days but less than 6 or 12 months.

Commercial Housing

This is defined as residential housing with five or more units. Demand for these types of listings is very high in Austin's market.

Strategies for Investing in Real Estate

Real estate—in all its forms—is enticing and can be the prime component of an investment portfolio or simply a way to diversify holdings and minimize risk. As we have discussed, many types of Austin real estate may be right for investors who have sufficient cash assets and the staying power to wait for the property to appreciate.

If you decide to invest in Austin-area residential rental property, you have myriad options. Before making an offer, however, define your goals. Rental property of any kind comes with its own set of demands, and both your short and long-term expectations will help to determine what route to take.

Some investors intend to lease only long enough to turn a profit through resale, while others hope to build a portfolio that provides steady cash flow for additional investment. There is no single "right way" to approach property investment, but we can help you determine your individual best strategies.

With the continuous growth of Austin's population as it continues to be a thriving area for job opportunities and its offer of a lower cost of living, multi-family homes and properties will be in demand as people from California and New York will continue to flock to the Texas capital and these investment vehicles are great for your investment portfolio.

For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.

Posted by Ryan Rodenbeck on


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