The Carvajal Group Blog

How to buy investment property in today’s boom

May 26th, 2011

While most would think that tight credit markets would lower the value of investment properties and make room for some solid deals to surface, the increasing occupancy rates and rent have actually caused the opposite effect on Austin real estate.  Finding a good investment is difficult because property owners are reaping the benefits of ownership and are less eager to sell.  Savvy investors have to dig deeper and get more creative to find good investments in today’s Austin real estate market.

Buyers today should look for properties in which they can add value in some way to increase rents and justify higher prices.

The quickest way to add value is to increase rental income of course.  Obvious options would be adding square footage or additional units which require large cash investment but there are other options that can be less costly.  Tenants in Austin seem willing to pay a premium for nice kitchens and nice outdoor spaces and this is a great way to demand more rents on your property.  Granite, sile stone or slate countertops have a great look and a nice gas stove will always earn a premium to anyone that likes to cook.  Outdoor spaces or green areas can also be a huge selling point to potential renters.  Austinites love their outdoor time and love grilling out with friends.  A nice place to sit and socialize will surely help increase those bottom line rents.  Another viable option is to find properties that may have window A/C units and come in and install central HVAC system.  With so many rebates available, this is a great way to add value and increase rents for a relatively low cost.  Offering additional convenience services like yard maintenance and maid services can also be a huge selling point.  These services can be obtained rather inexpensively and marked up to be included in the rent (this will also help protect your asset over time).

I also recommend that buyers look outside of their budgeted price range.  Many properties that sit on the market, do so because they are overpriced.  Buyers should figure the price that makes sense from an investment standpoint and submit the offer.  Any good real estate agent will draft a cover letter outlining and justifying the offer price.  Buyers should continually keep in contact with the seller continuing to make it known that the offer stands.  One bad day or need for quick cash and that property could be purchased a significant discount.

Getting creative in today’s Austin real estate market is a sure way to buy right.  The ability to see beyond what others can see is the key to making smart and profitable investments.  For more information about Austin real estate for assistance with your Austin Home Search contact us today at (512) 419-7770





Tags: Austin Home Search · Austin Investment Property · Austin Real Estate · Austin Real Estate Market