What Investors Should Know About the Austin Real Estate Market

Austin has become one of the most desirable real estate markets this year, thanks to its ongoing growth. Many companies are relocating and expanding to Austin, which is causing people to relocate as well. More residents mean more people who need housing. This is the perfect time to become an investor in the Austin real estate market! Before you take advantage of the market, here’s what you should know about the local real estate market. 

Renters Can Afford More 

Since many people are relocating for Austin’s incredible job market growth, that means there are people with higher education and higher incomes coming to Austin. These individuals need a place to live, which means you can increase your monthly rent. According to Apartmentdata.com, the rental price for July 2021 was $1,422/month. But don’t go above the market average, then your property will sit vacant for longer. If you need help pricing your property, reach out to us! 

Occupancy Rates Are High

Occupancy rates have always been stable in Austin, but now they’re increasing. As stated in the Apartmentdata.com July 2021 stats, over the past 12 months, the rental rate growth increased by 9.4%, and occupancy is at 91.4%. This hot seller’s market makes homes unavailable for some due to low inventory or high price tags. This means they’ll continue to rent and renew their lease. This creates a unique opportunity for you. 

From that same data, areas all around Austin are popular for renters, which gives you several locations and price ranges to choose from. The most growth came from a combination of downtown Austin, South Congress, and Barton Springs. The other hot submarkets are University of Texas/Mueller, “outlying metro”, Round Rock/Georgetown, and Cedar Park, Leander, and Four Points. 

The Job Market Is Strong

The pandemic has made Austin an attractive home base for many big companies like Tesla, Google, Amazon, Facebook, Oracle, and more. Data from the Austin Chamber of Commerce show that in just June alone, over 20 businesses have relocated to Austin or opened their new business in Austin. More jobs = more people, and more people = more housing. 

Why Invest in the Austin Real Estate Market?

Some other reasons to invest in the Austin real estate market are: 

  1. Quality Education
  2. High Demand for Skilled Labor 
  3. Austin Has Plenty of Amenities
  4. Austin is an Active Community

 

If this all sounds good to you and you’re ready to invest, contact us today! Reach out to TALK Property Management– We are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com

Reporting Rental Income on 2020 Tax Return

Tax day 2020 is approaching quickly, and for many Austin taxpayers, it means spending many hours in front of a computer or with an accountant sorting out their year’s financial activities. For investment property owners, though, it can mean a much more complicated process. Owning a Central Texas property from which you receive income adds another layer of taxpayer responsibility. As an experienced Austin property manager, Dona Brown, offers Texan rental owners expert insight to help navigate 2020’s tax day.

There are two types of taxpayers when it comes to real estate income: cash-basis taxpayers and accrual method taxpayers. The cash basis approach is reporting income on your tax return the year you actually receive it versus an accrual method that reports the income when you earn it. Most often, property owners are cash basis taxpayers that need to understand how and when to report income.

Owning rental properties and investment real estate comes with responsibilities, including claiming all gross rental income. If you are preparing your taxes for 2020 and you own investment properties, you’ll want to understand these key definitions of rental income.

What is Rental Income?

  • Rental income is the gross of all income amounts you receive for the use of a property, and all income must be reported. As a general rule for cash-basis taxpayers, you must report all rental payments as income in the year you receive it. However, there are various ways rental income is defined.
  • Advance rent – any amount of rent received in advance of the period it covers. The income must be reported for the year it is received, not the period it covers.
  • Security deposits used as a rent payment – any deposit to be used as a rent payment (such as the last month’s rent) must be reported for the year in which it was received unless it is to be returned to the tenant. When any part of the security deposit is retained for damages, include that amount as income, reported the year it is retained.
  • Payment for canceling a lease – any amount you receive for terminating a lease agreement is considered rental income that needs to be reported.
  • Expenses paid on your behalf – any payments a tenant makes on your behalf such as a utility bill that they then deduct from regular rental payments must be claimed as rental income.
  • Services or property received in lieu of rent money – if a tenant chooses to provide a service such as painting in lieu of rental payment, the amount of rental income that service is replacing is required to be reported.
  • Lease with option to buy – the rent payments received under this agreement are considered rental income to be reported.
  • Partial interest in a rental property – if you own a partial interest in a property receiving rent, you are required to report your portion of the income received.

As an owner of rental real estate, be sure to understand your responsibilities to the IRS and consult a tax professional with any questions you have. If you need a recommendation or are considering a property manager to help you handle your investment properties, contact Dona Brown, Talk Property Management. We are Greater Austin area professionals, and we’d be honored to earn your trust. Contact us at (512) 721-1094 or DBrown@TALKPropertyManagement.com.

New Homes in South Austin

The 468-acre plot of land known as Turner’s Crossing will soon be a sprawling community with more than 1,300 single-family homes. The community will also offer a variety of amenities, including pools, playscapes, a splash pad, and a three-mile walking trail. The construction project is an ideal location and just 11 miles south of Downtown Austin.

If you’re thinking that it sounds like a massive project, you’d be right. In fact, Meritage Homes Corp is constructing homes in phases and is even working with other partners to get the project rolling. The first phase is likely to start construction soon and will be in the northern section of Turner’s Crossing, between FM 1327 and SH 45.

Trendmaker Homes Austin has also acquired land in the area, 324 single-family lots, to be exact. The company has set a target open date for June 2021. Taylor Morrison Home Corp. will also be helping out and constructing some new homes within Turner’s Crossing.

With a large demand for affordable single-family homes in Austin, there’s no surprise that several companies are putting in their all to develop the south Austin area, but there’s still a chance for more development groups to get in on the action. Close to 40 acres of Turner’s Crossing will be dedicated to commercial and multifamily projects, but Meritage hasn’t begun negotiations to sell this property to developers.

It will be interesting to watch how this project unfolds and what kind of commercial and multifamily residences will join this massive community. The development of land in Austin solely dedicated to homes priced between $200,000 and $400,000 has been needed for some time.

If you have any questions about the area and what kinds of investment properties may be right for you, give our team a call. We’re happy to talk real estate and what the current developments can mean for Round Rock, Austin, and the surrounding areas.

Austin-area Home Demand is Strong, but Median Price Stalls Slightly – What This Means for Real Estate Investors

 

Strong first-quarter home sales in the greater Austin area continued into April, according to the most recent Central Texas Housing Report released by the Austin Board of REALTORS®. However, the Austin-Round Rock MSA’s first quarter home sales were tempered with a stalled median home price increase of just .2% during that period. This figure is significantly lower than in the same period in previous years.

“Between 2012 and 2015, we saw price increases as high as 9%,” said Kevin P. Scanlan, 2019 president of the Austin Board of REALTORS®. “These narrower margins are a strong indication that market prices are starting to stabilize.”

Home sales volume continues to rise in the greater Austin area, and it was up 14.9% to 3,035 sales. Surprisingly, new listings were down 1.8%, but active listings increased 1%, another opportunity for Austin-area real estate investors.

Pending home sales in the greater Austin area spiked to 14.3%, while months of inventory hovered at 2.4.

According to the Texas A&M Real Estate Center, a “balanced real estate market” is defined as six months worth of home inventory. With housing supply hovering at 2.4 months, the greater Austin area remains a “seller’s market,” meaning that it is generally more favorable to sellers/owners due to a reduced supply of homes.

However, with the median home price tapering, there appears to be some stabilization and a silver lining for investors who are considering investing in Austin-area residential real estate, especially while interest rates remain low.

Regardless of your situation, TALK Property Management is always here to help, even if you just have a question about the real estate investments in the Austin area. Or, if you’re considering selling your investment property or if you know someone who is, contact our TALK Property Management today. We are always here to help.

State of the Greater Austin Real Estate Market Update 2018

The greater Austin real estate market continued to show signs of strong growth at the end of 2018, and the consensus is that this will continue into the foreseeable future with some market normalization.

In the Austin-Round Rock Metropolitan Statistical Area (MSA), sales volume slightly increased year over year from 2,185 sales in November 2017 to 2,201 sales in November. Meanwhile, the median home price rose 2.2 percent year over year to $301,391.

New listings were on the rise for the five-county MSA, up 1.7 percent year over year to 2,380 listings in November. During the same period, active (on-market) listings increased 11.5 percent, and pending sales rose 2.5 percent, indicating larger inventory levels but also more buyers to absorb part of that increase. Monthly housing inventory increased to 2.7 months of inventory (6 months of inventory is considered a “balanced market,” meaning that neither buyers nor sellers have an advantage.

The number of days (on average) that a house spends on the market increased 3 days to 64. Over time, this figure has continued to slowly grow, indicating a rise in both inventory levels and the time it takes for a home to sell.

“Families and young professionals continue to move to the suburbs where there are more opportunities for home ownership at a more reasonable price point than in the city of Austin,” said Steve Crorey, president of the Austin Board of REALTORS®. “While home sales growth isn’t as rapid in the city, demand is still strong. Analysts predict Austin will be a market to watch in 2019.”

The moral of the story? Today is still a great time to buy and sell real estate in the greater Austin area. If you have any questions about how this information affects your real estate portfolio, please reach out to me anytime. I’m always happy to help.

Austin-Area Home Sales Set October Record

Despite a dip in September, the Austin-area housing market rebounded big time in October. In fact, according to the October 2018 Central Texas Housing Market report released by the Austin Board of REALTORS®, both home sales and sales dollar volume were the highest on record for any October. These record highs suggest a strong demand for single-family homes around the Austin-area and, while inventory did slightly increase around the area, there is still not enough supply to support the demand. What should you know as both a current and potential investment property owner? Here’s a look at the details:

Luxury houses in North America

  • Austin-Round Rock MSA
    • 2,347 home sales – a 4.3 percent increase from October 2017 AND the highest number of sales for any October
    • $900 million in sales dollar volume – an 8.8 percent increase year-over-year
    • $308,355 median home sales price – a 7.5 percent increase from October 2017
    • 2,871 new listings – a 3.7 percent increase year-over-year
    • 7,434 active listings – an 8.2 percent increase year-over-year
    • 2,444 pending sales – a 2.8 percent increase from October 2017
    • 2.9 months of inventory
  • City of Austin
    • 735 home sales – a 7.8 percent increase year-over-year
    • $343 million in sales dollar volume – an 11.9 percent increase from October 2017
    • $377,000 median home sales price – a 3.7 percent increase from October 2017
    • 878 new listings – a 5 percent increase year-over-year
    • 1,643 active listings – a 5.4 percent decrease year-over-year
    • 711 pending sales – a 2.2 percent decrease from October 2017
    • 2.1 months of inventory
  • Travis County
    • 1,176 home sales – a 6.2 percent increase year-over-year
    • $537 million in sales dollar volume – a 10.9 percent increase from October 2017
    • $358,540 median home sales price – a 5.5 percent increase year-over-year
    • 1,417 new listings – a 5.1 percent increase year-over-year
    • 3,374 active listings – a 1.2 percent increase from October 2017
    • 1,198 pending sales – a 3.3 percent increase year-over-year
    • 2.6 months of inventory
  • Williamson County
    • 780 home sales – a 0.5 percent decrease year-over-year
    • $242 million in sales dollar volume – a 3.3 percent increase since last October
    • $281,250 median home sales price – a 4.5 percent increase year-over-year
    • 963 new listings – a 2.6 percent decrease from October 2017
    • 2,595 active listings – a 12.2 percent increase year-over-year
    • 835 pending sales – a 2.1 percent increase from October 2017
    • 2.9 months of inventory

Do you have any questions about the local housing market? As a longtime REALTOR® and property manager in the Austin-area, the TALK Property Management Team is always here for you. Contact our team anytime!

Are you thinking about buying an investment property? We would be happy to help! Contact us today to get started and learn more about our property management services!