Austin ...Still a Great Place To Invest

Recent Market conditions as a result of the mortgage industry fallout have had a serious impact on Real Estate investing all across the country. But don't be fooled by the media, Austin is still rated highly among places to invest by most Real Estate analysts. Texas has not been hit as hard by the sub-prime fallout like California, Arizona, Florida and other parts of the country. While some of our individual neighborhoods have experienced sharp increases in appreciation, overall Austin has benefited from a slow, steady climb in prices. There is no better time than now while all the "sheep investors" are on the sidelines to acquire rental property in Austin. Call me today and I'd be happy to talk with you about the many investment opportunities.

Why Investors Like Residential Real Estate:

*You can get someone else (your tenant) to pay for your asset 
 
*You can leverage your purchase to multiply your return 3-5x
 
*Tax deductions increase your after-tax cash flow-deduct repairs, fees, interest, insurance, taxes ... 
 
*Real estate has demonstrated stability-shelter is a fundamental need
 
*Residential property is the most liquid of all real estate investments-homebuyers are everywhere
 
*You can build equity with both debt reduction and appreciation 

Why Invest in Central Texas?

Central Texas is Pro-Business

Austin is at the heart of a dynamic five-county region recognized for its talented workforce and superior business environment. Forbes Magazine confirms what businesses already know-that Austin is the Number One place to do business and advance your career. Austin's well-educated workforce, overall low business costs and available, affordable commercial space offer unparalleled opportunity for business growth.

Austin is considered one of the "Cities of Ideas" along with Seattle, San Francisco, and Portland. High tech knowledge-based industries such as semiconductors, software, internet, biotech, wireless, and nanotechnology make their home here. Austin based Dell Computer is recognized as the world's leading computer manufacturer.

As these industries continue to grow, they will seek to locate in cities with a mixture of high quality of life (including an excellent climate, parks, natural beauty, and a strong cultural base), relatively low cost of living, and with a strong base of highly educated employees - all strong characteristics of the Austin and central Texas areas.

Texas, with its business friendly environment and lack of a state income tax is increasingly considered one of the leading states in the country to start as well as relocate a business (as many California firms have already done).

With all of this projected growth (doubling of population by 2025), new residents are going to need housing. This will serve the dual purpose of increasing rental income for investment property owners as well as increasing the equity value of their investments.

Because Austin invests heavily in "smart growth" initiatives, developers concentrate heavily on infill development - a positive thing for property investors, because suburban sprawl is de-emphasized, and inner city real estate investments appreciates on a more similar pattern to geographically supply constrained areas such as Los Angeles, San Diego, New York City, San Francisco, and Boston.

Central Texas Has Boomed Before and Will Boom Again. In 2001 it was not uncommon for a client to make an offer on a house and find out that they lost out because five other bidders made an offer before – every one of them over the asking price for the house.

This period marked the tenth year of an economic expansion in Austin that saw the median home value double as well as average rental values for residential properties skyrocket 80%.

There were three major factors that sought to “dim the lights” of the area residential housing market around 2001:

Interest rates continued to fall through the floor, allowing many renters to purchase their own homes (leading to decreased rental values)

The dotcom craze lost its luster leading to the demise of many local firms and their accompanying high paying jobs

Class A multifamily builders all witnessed the 98% occupancy numbers of 2000 and decided to build like crazy -- further increasing supply just when demand was falling. Yet despite these factors, 1-4 unit investment property has been remarkably resilient. Even with the economic uncertainties of the past few years median home values have risen every year since and in some areas, 2-4 unit property neighborhoods have downright exploded in value.

As of early 2005, economists have measured marked increases in new hirings, increased net migration to the city, and an overall dramatically improved economic outlook moving forward. It is highly likely that the market has “turned”, and this is the ideal inflection point to jump into the market and strap in for an exciting ride.

Central Texas is a Great Place to Live

The Greater Austin area ranks high on the livability scale, which is why Austin frequently ranks high on national lists of Best Cities. In 2003, for example, Austin came in fourth on Travel & Leisure’s list of best loved cities, first on Forbes’ list of Best Cities for Singles, and third on Hispanic Magazine’s list of Best Cities for Hispanics. In 2002, it was in the Money Magazine’s Top 10 list of Best Places to Live. Lots of reasons are given-a cosmopolitan atmosphere without big city hassle, great scenery and recreational opportunities, a reasonable cost of living, a great music and cultural scene.

Austin is nestled among the rolling hills and lakes of Central Texas, the seat of state government, an educational Mecca with seven area universities and an entertainment complex that includes the best of live music, the arts and all the fun of the great outdoors.

There are simply no other markets in which the cost to “get into the game” is as low as it is in Austin combined with a market that so many experts feel is poised for tremendous growth in the coming years. Forward thinking investors that jump on board now are likely to reap substantial benefits in the future.

*2006 Real Estate Market Overview (as provided by the Real Estate Center at Texas A&M University):
http://recenter.tamu.edu/mreports/AustinRRock.pdf