Austin is a city that is seeing a lot happen to it. From corporations taking an interest in the most business-savvy city in Texas, to people moving to the state to be in a big population center with better rent. But Austin is not one monolithic entity. Like all cities, it contains multitudes.
And if you are a real estate investor, then it is critical that you understand what those multitudes are and what advantages they bring. After all, commercial real estate investment is very different than residential real estate investment, and even more different than tourism.
So, here is a guide to the 10 neighborhoods in Austin that are most worth considering when it comes to real estate investment in the city. Some of these are cheap, some are expensive, and some require expertise. But use them right, and they are all profitable. Check it out here.
This is a primarily low-income area. That means a couple of things: First, it means that while there are businesses being set up here, they are pretty unreliable. There will be a coupe of outliers that are able to pay their rent with little liability, but do not count on it.
But more importantly, it means that it is easy to get into the residential real estate business here. Many people will be moving here to deal with rent in other neighborhoods too.
This is a slightly pricier area to invest into residential real estate, but it has the advantage of having a better price per square foot. Basically, that means the buildings are bigger.
One of the advantages that the United States has over the other global superpowers is that China and Russia’s cultural revolutions resulted in them making their buildings as plain and affordable as possible. But here, bigger buildings are almost always more aesthetically pleasing.
This is a residential neighborhood too, but it is different than the others. The thing is that it should not be taken to be another place to buy apartment blocks for rentals. Instead, these are more expensive properties that house fewer people. What is the advantage here?
For one, you can still rent a home out. But more importantly, the location of the neighborhood means that it makes for a good place to host AirBNB guests.
The big advantage of Riverside is its connectivity to commercial and tourist areas. This makes it a great place for multiple forms of investment: You can pay into a hotel, motel, bed and breakfast, or AirBNB. But you can also pay into a tourist industry or normal business.
In short, Riverside’s biggest asset is that any property can be versatile.
As the name implies, this is an area with a good number of universities adjacent to it. These are usually great places for businesses, as college students have more extra income than you would think. The stereotype of the starving college student is pervasive, but at this point most college students are people who can only be in school due to coming from money in their family.
That means that they will not only have more money, but a different conception of money, allowing for more niche businesses to flourish.
This is a higher-end housing area, but do not let that tradition fool you. Just because something has been a housing area for a few decades, that does not mean it needs to stay that way.
If you want to get really creative with your investments, the high-end housing of Sweet Briar is ripe for innovation. Try something like buying a house, bulldozing it, then building a duplex in its place. This lets you collect more rent on the same area with more residents on it.
The advantage is that you can have two renters occupying the duplex, both of whom are paying far less rent than they would usually in the area. Two renters also mean mitigated risks.
This is an area that can be considered both residential and banking. This is a common practice in Texas. Where a city like Chicago or New York will have a banking district made up of tall office buildings, Austin has everything spread over many miles of land.
This means you can buy real estate at the edge of the residences and banks and turn one into another. Though there are better finance options than going straight for banks.
Do not let that $300,000 properties fool you: This is a low-income area. The thing is that it is located deeper in the city than others, meaning that its buildings are taller and more expensive.
But taller buildings mean more apartments, and more apartments means more renters. This makes it a low-risk area, despite the high price of initial investment.
This is easily the most expensive neighborhood on this list. But the interesting thing about expensive neighborhoods is that they are actually good places to practice if you are new to real estate investing. You see, people with the money and the need to buy in this area rarely know much about real estate. If you sell them an overpriced home, they will accept it at face value.
This means there is a lot more “all in, all out” success stories in areas like this.
The definition middle class neighborhood in Austin, Allandale is more populous than many of the areas around it while still having affordable living spaces. This means that people will move there in search of lower rent. Hopefully, what they find is you instead.
Its location near all the more expensive neighborhoods makes it desirable too, so all you have to do is price your properties lower than those neighborhoods but above your cost.
Housing, and real estate in general, is booming in Austin at the moment. But that does not mean taking advantage of it is easy. Invest carefully, manage your losses, and be careful. No one knows when exactly the bubble will pop for all these places.