Episode 68, Part 3: Explaining Recent Appraisal Delays in Austin

John and Andrew talk appraisals and recent delays in the busy Austin real estate market.

"There's no doubt that there are delays with appraisals right now," John says. "Prior to March or so, in real estate things get really busy in the spring through the summer, and then it slows down around November. We're in two thirds of the way through the busy season right now." 

Why are appraisals taking longer to come in right now?

"Appraisers get really busy too, but to become an appraiser, it's like a two-year apprenticeship and you also have to have a college degree, and you can't just hire appraisers," John explains. "It's an industry where the average age is going up and the younger generation is not getting into becoming appraisers, for whatever reason. It's just the reality - the average age of appraisers is around 60 right now."

So when appraisers get really busy, they're tapped out - there's just not enough appraisers out there right now. 

"We're used to about a 5-day turnaround, but we're seeing in Travis County that it's taking about 6.4 days on average to get an appraisal back. When you're in this business, every day counts. Sometimes that one day can really affect things."

In other counties like Bexar County near San Antonio, appraisals are taking about 7 to 8 days right now. 

"In Salado, we had to call 10 appraisers to find one who could do that report in 17 days. We couldn't find an appraiser to do it in the time-frame it needed to happen, so we had to push out closing date out, and the appraisers were still 3 days past that date."

We work with appraiser management companies, so we don't really have any control over how the appraisal goes or how fast it comes back," Andrew adds. 

Guidelines to Dealing with Appraisal Delays

1. Be prepared to possibly pay more

A typical appraisal costs roughly $460, but it's not uncommon these days to pay $560 or $660 for an appraiser simply because they are so busy and working later than normal. "It's supply and demand," John says.

2. Talk to your lender about what their turn times are

We have a pretty good idea depending on the location of the property what the turn time is for an appraisal. If a closing date is August 10th and the best appraisal time is August 8th, we'll then tell you that we think it should close on time, but there may be a delay. A good lender will let you know upfront that there may be a delay in your appraisal.

3. Have a back-up plan

"Unfortunately, right now you may just have to assume that the appraisal will come in a day or two late," John says. 

Be sure to communicate with your realtor and lender to ask what the plan is if the appraisal does come in a little later than the deadline. "I think most good agents will think through this and have a pre-negotiated backup plan so that if the worst-case scenario happens, you will be able to get through it," John says.

If you work with a good lender, they will help you through this process! If you have any further appraisal questions, feel free to call John or Andrew at (512) 524-8310. 




Episode 68, Part 2: DPA Programs That Aren't FHA

John Schutze & Andrew Thurston discuss the different down payment assistance program alternatives to FHA. Listen in to see which programs you may qualify for!

"A lot of the folks I work with are first-time homebuyers and millennials," Andrew says. "A lot of younger people don't have a lot saved up and don't know what to do, so they come to us to see what their options are."

"One of the neat things about Supreme Lending is we offer several down payment assistance programs," Andrew says. 

Those programs include the SETH program, TSAHC program, Travis County HFC program, and the My First Texas Home TMP 79 program. You can learn about all of these programs right here!

DPA programs help you cover your down payment and maybe some of the closing costs. There is, of course, a trade-off: The closing costs are a little higher and interest rates are a little higher with these programs.

An FHA loan allows you to do 3.5% down payment with pretty good interest rates and are usually more forgiving on the credit score side, but their monthly mortgage insurance is usually higher. 

An alternative that makes sense for some people with a higher credit score is a conventional DPA program: They can get a conventional loan with an even lower down payment at 3% and still receive down payment assistance!

Conventional loans are also great for condos, since FHA loans for condos are generally much more strict on approving certain condos. 

"With an FHA loan, you have to look at the spouse's credit score. In some cases, one spouse has great income and credit, but the other spouse may have a lower credit score or more debt. Unfortunately, with FHA loans, we must include both debts for each spouse. With conventional loans, you don't have to do that and can qualify with just one spouse's information," John says.

Nowadays, there are a lot of down payment conventional programs that are better options than an FHA loan! There are some from Fannie Mae, some from Freddie Mac, and all with different eligibility factors. 

If you'd like to learn more about down payment assistance programs, visit our blog or call John or Andrew at (512) 524-8310 to discuss your loan options!




Episode 68: Discussing Discount Points

John Schutze & Andrew Thurston of Supreme Lending discuss how the point system works with home loans, and what it means to have a discount point.

3.45% is the current average interest rate, according to Freddie Mac's latest survey. However, there are a lot of factors that may bring in adjustments to that rate, John and Andrew say.

"A common phrase I hear is that people want 'no points,' or 'I don't want to pay any points!'" The Freddie Mac rate specifically includes average points of .5 -- it's not the zero point rate," John says. 

"The rates that are quoted generally have some sort of associated discount points," John explains. 

"We're definitely competitive out there with other lenders and banks," Andrew says. 

"I had a client this week who was about to go with another lender after starting the process with us," John says. "They emailed me and said they were going to go with another lender because their rates were better. She put these round numbers in an email, and it didn't look right to me because her closing costs were $500 - so unless the lender was waqiving their fees AND the title company's fees, it just didn't add up. So in a very nice way, I told her to send me that in writing - I want to help people, and I didn't want her to go down the road and find out later about those costs. She had called online to a lender and wasn't even given a written quote!"

What is a discount point? 

Discount points come up a lot, so it's important to know what they are:

"Discount points are basically money that you pay to bring the interest rate down," Andrew says. "So in this case the point is equal to 1% of the loan amount, so if you're buying a $250,000 home and putting 20% down, your loan is $200,000. So one point there is going to be $2,000. If the Freddie Mac average is half a point, then they are likely paying $1,000 to drop that interest rate a little bit."

"I'm seeing these tiers - you may pay one point just to get an 1/8th percent off, since rates are so low right now. What we're actually seeing is a lot of clients aren't paying too many points because it doesn't really pay off right now," John says.

"You pay your normal lending fees plus the title company fees, so if today you paid a point, you could get down to 3.375, paying $2,000 on a $200K house -- your payment will be $28 cheaper if you do that,' John explains. "So one thing we do is help people understand what their break-even is; so how many months would have to go by before that savings of $28 per month adds up to the $2k you paid?"

"A lot of lenders seem to give clients a one-rate option, whether discount points are included in that number or not. This is especially true with online lenders and banks, quite frankly," John says. "That's why it's so neat what we do, because we give our clients a matrix chart of different rate options so they can see what they are saving and where with different points and rates."

Bonus: Discount points are generally tax deductible, so if you pay points now, you can increase your tax deductions slightly!

If you'd like a consultation or have further questions about how discount points work, give John or Andrew a call at (512) 524-8310. 

Episode 67: Is Now The Best Time To Refinance Your Home?

With interest rates averaging close to 3.57% (according to Freddie Mac's latest survey), there hasn't been a better time to refinance in years! Listen to the show or continue reading below to figure out if refinancing is something you should consider:

What does it mean to refinance? 

A refinance is essentially getting a new mortgage to replace your original one - only with a better interest term and rate. A lower interest rate can save as little as $30 to hundreds of dollars off your monthly payments. Your original loan is paid off, allowing you to create a new loan. Refinancing can also allow for you to take cash out of your home for large purchases.

Heads up: Most mortgage companies require borrowers to maintain their mortgage for at least one year before refinancing. 

What are the perks of refinancing? 

  • Lower monthly payments: If you plan on living in your home for the next several years, refinancing will be worth it when it comes to savings on your monthly payments. However, if you are planning on moving elsewhere in the next couple years, you may not break even with your refinance & closing costs. It's important to calculate your "break-even point," which helps you decide if a refi is the best option for you financially. 
  • Get rid of pesty PMI: If you bought your house and put less than 20% down, you are most likely required to pay private mortgage insurance. As the value of your home increases, borrowers may be able to drop their PMI with a refinanced loan (as long as it's not an FHA loan). Be sure to ask your lender if this is an option for you!
  • Cash out some of your home equity: As your home increases in value, the opportunity for putting it to cash also increases. You can use a cash-out refi to help purchase a new car or pay down credit card debt. Bonus: This option is also often tax-deductible!

What are the costs of refinancing?

Refinancing generally includes lender fees, title company fees, and the cost of a new appraisal.

Other reasons you may want to consider a refi: 

  • Current interest rates: Right now, rates are lower than ever, so it's a great time to consider a refi! 
  • Jumbo loan: If your original mortgage was a jumbo loan, but the current balance of your loan is under $417,000, you may be able to get a "regular" refi with lower rates.
  • Credit score changes: If your credit score has improved since your initial mortgage, you may now qualify for a lower rate! 
  • Home Equity: The more equity you have in your home, the easier it is to get a refi. If you haven't been in your home too long, you may want to wait it out; but if you've earned quite a bit of equity, you're much more likely to qualify for a refi with great terms.

While refinancing can sound complicated, try not to feel overwhelmed! Call John or Andrew today at 512-524-8310 for an open and honest discussion of all your options. We're happy to take a look at your situation and help you decide if refinancing right now is the best idea for you! 

If you're interested in taking the next step, just click right here to apply!

Episode 66, Part 2: Why Sellers Should Get Home Inspections First

Mark Hairston and Andrew Thurston of Supreme Lending welcome Keller Williams Luxury Homes Agent Sean Sutton to the show to discuss an awesome strategy for sellers when it comes to home inspections and how to control the deal.

What's a home inspection? 

"A non-invasive visual inspection of the systems and components for durability, operability, and serviceability," Russ explains. "If you tear a wall open and find dry rot, that's really not your home inspector's fault. However, if there was water damage or staining, then absolutely they should be bringing that up."

"The home inspection is usually something we're all holding our breath for," Andrew says. 

"I literally schedule the inspection as I'm driving away after a final offer has been made," Russ says, emphasizing the importance of getting an inspection done as soon as possible in the process.

Why the seller should get a home inspection done first

"The one person holding their breath the most in this is the seller," Russ says. 

"The seller should get the inspection done upfront BEFORE they go on the market," Russ explains. "Now when they get an offer, they respond with their counteroffer AND their seller's disclosure AND the home inspection, and now they've defined the as-is sale. The buyer may get their own home inspection anyway, and anything that's in their inspection that's also in yours, you've already defined as part of the as-is sale and there's no re-negotiation. Anything different, you go back to your inspector and if the buyer's inspector is correct, then a great seller's inspector will step up and make it right, and that's a win-win."

"Be prepared. Get everything done upfront so you can control the process," Russ advises.

Left to right: Andrew Thurston, Russ Colliau, Mark Hairston.

Left to right: Andrew Thurston, Russ Colliau, Mark Hairston.

If you have any questions for Russ about real estate or home inspections, feel free to call him at 512-910-0560 or email him at RussColliau@kw.com.

If you have any questions on the lending side, call Mark at 512-789-6967 or Andrew at 512-590-4976. 

Episode 66, Part 1: Home Buying Is At Its Lowest Percentage in 48 Years

Mark Hairston and Andrew Thurston of Supreme Lending sit down to discuss the surprising news that the current percentage of home-buyers is at its lowest in 48 years.

Why are we at a 48-year low?

"The housing crisis back in '08 is still affecting us, though in Austin we have been protected from it moreso than in other areas in the United States - but it seems like some people are still too scared or think it may be too difficult to buy a home," Andrew speculates.

"Also, it seems like a lot of millennials are okay with putting home-ownership off," Andrew says.

"I'm definitely seeing that," Keller Williams agent Sean Sutton agrees. "But it's the opposite of what they should be doing! The sooner you can buy a property, the sooner you can start building that real estate wealth. More millionaires have been made through real estate than any other platform!"

Mark adds, "The economy isn't doing so great and the rates are pretty low right now, so it's a great time to buy."

"I've been seeing refinances go up as well," Andrew says. "People who got mortgages in the past two or three years are even refinancing already."

"However, at some point rates will go up, so it's smart to get in now," Andrew advises. 

If you're interested in buying a home in the near future, contact Keller Williams Luxury Home agent Sean Sutton at (512) 988-7827 or email him at seansutton@kw.com.   

If you have questions about refinancing your current mortgage or if you're looking to apply, contact Mark or Andrew or call our office at (512) 524-8310. 


Episode 65, Segment 3: Strategies for Winning Multiple-Offer Deals

Guest real estate agent Monica DiSchiano joins the show to talk about the best strategies for winning a multiple-offer deal in the incredibly competitive Austin market.

As real estate agents have been seeing as many as dozens of multiple offers on homes in Austin recently, it's important to figure out how your offer can stand out from the crowd. 

"Anything under $250k has so many offers and is so competitive," Monica says.

Outbid or offer cash

"Sometimes just offering $5k more can get you the deal," John says. 

"There are a lot of cash offers out there right now, and sometimes a seller will choose a cash offer even if it's a lower offer,  because then they don't have to worry about it appraising and it can close faster," Monica explains. 

Put more money down

"Of course this may not be an easy option, but if you show up to the table with just a little more money down, it will make your offer much more appealing," John says. 

If you can put 20% down, that can not only win you the deal but also save you from having to pay for mortgage insurance. 

Write a letter 

"Tugging at the heartstrings can actually work pretty well," Monica says.

"I find that people get very sentimental about their house," Andrew says. "If they grew up there or their kids grew up there, they may want to know that their home is going to a good family and not an investor."

John chimes in, "I've seen so many examples where the letter makes a difference. I bought a house last summer and I knew the sellers had kids and my agent wrote them an email with our story and we ended up getting the house!"

"I knew it would make a difference, and it did."

Put a great team behind you

Having a reputable mortgage lender behind you can definitely help you in the process," Andrew says. "When we do a prequalification we really vet them out well and sometimes we'll even call the seller's agent and tell them that they are a good candidate and don't have any red flags on the lending side."

"All lenders aren't equal," John adds. "How many times do we see folks win contracts because they know Supreme Lending or our loan officers? It really does make a difference."

Be a flexible buyer

"Basically, if you can find out the seller's ideal scenario, just try to meet that and not make demands for when you need to close as a buyer," John says. "If you're flexible, you can allow the seller to determine the date rather than you and possibly lose the deal."

"If you're working with a good agent like Monica, find out the seller's minimum criteria and just meet it and give them what they want," John continues. "A lot of buyers enjoy the game of negotiating and want to have something on their side, but it's just not in the card for them in this market right now."

If you're interested in selling or purchasing a home, feel free to call or text Monica at (512) 496-0606, email her here, or visit her website at www.monicasdomain.com



Episode 65, Segment 2: Financing Options for a Multi-Generational Home

In this segment, John Schutze and Andrew Thurston flip the coin on multi-generational homes to discuss the mortgage options available for this unique type of housing.


Loan Options for Multi-Generational Homes

"The lower-priced models could possibly qualify for an FHA loan," Andrew says.

Austin is simply not affordable for a lot of people anymore," John adds. "So we're seeing this with a lot of clients nowadays where they're combining households to save money or just to be able to buy a house. This is a great alternative."

"Parents can get the loan in their name and have their kids live there; the kids could get the loan in their name and have the parents live there; or they could all four be on the loan together and the down payment could be from any source, either the parents or the kids. So this is a very acceptable way to finance it without any issue," John explains.

"If the home is in the $350-400k range, and the parents and kids are both wanting to move, there aren't really a lot of homes under the $300k range. In this case, they could get a $400k house and it would be cheaper than getting two separate homes," he continues.

"If you have a current home and sell it to move to a multi-generational home, you could use that money to put 20% down on your new home and avoid mortgage insurance and do it that way," Andrew says.

"If a parent who is over 65 is helping to buy the multi-generational home, they could most likely get the senior exemption on the whole home and offer a huge savings," Monica adds.

"And if you have a parent on the title, you can get the exemption through that - they don't have to be on the mortgage to be on the title," John says.

If you have questions about the mortgage side of things when it comes to multi-generational homes, feel free to email John or Andrew or give our office a call at (512) 524-8310. 

If you're interested in learning more about multi-generational homes, give Monica DiSchiano a call at (512) 496-0606 or email her here

Episode 65, Segment 1: The Awesome Potential of Multi-Generational Homes

This new type of housing may be a game-changer, says Monica DiSchiano of Sky Realty. Listen to the podcast or keep reading below to learn more about the multi-generational home and the impact it may have for both the Baby Boomer and millennial generations.

So, what is a multi-generational home? 

It's a single-family home, but it's like a home within a home," Monica says. "Inside there's an apartment or 'suite' and it has a kitchenette and a living room and bedroom with a full bathroom, and it also has its own exit out of the home and a porch and sometimes even a garage. They can also access the inside of the house from inside as well."

"I'm seeing a lot of buyers out there who are needing the space for an elderly parent, a child, or roommate situations that these homes are filling a need for," Monica says. "I noticed the need for it first two years ago when I was holding an open house at a large home with four or five bedrooms - the master bedroom was downstairs and there was also a guest bedroom downstairs, which was a little unusual. People really liked that, but were upset that it didn't have its own bathroom."

The Lennar Hilltop II Floorplan

The Lennar Hilltop II Floorplan

"I looked at that extra room as an office or study, but people were coming in and saying how great it would be for their parents to stay with them or live with them there," Monica explains.

Where can you find a multi-generational home?

"Lennar Builders are building in about 4 different Austin area neighborhoods right now with three different floorplans," Monica says. "They're in Leander, Georgetown, Buda, and South Austin."

"Lennar came out with these floorplans about five years ago in Houston and then in Dallas, and they decided to bring them here in Austin, and they've said the homes are really taking off."

What kind of prices are we looking at?

"It's about $40,000 more," Monica explains. "The majority of that number comes from adding the extra kitchen, and having their own exit out of the house."

Pricing of these layouts starts as low as $295,900 and goes up to $452,900, depending on which floorplan you choose.

"Right now, the majority of their homes are built with elderly parents in mind, but 32% millennials age 18-34 are still living with their parents, so this could definitely be built for them too," Monica adds.

"I always tell clients to think of the extra money as a gift fund," Andrew Thurston adds. "It's a small price to pay for getting your kids into their own home or their own space!"

If you have questions on multi-generational homes or are interested in buying any type of home in the near future, don't hesitate to contact Monica DiSchiano at Sky Realty!

          Monica DiSchiano, Sky Realty

          Monica DiSchiano, Sky Realty

Monica's blog also features a ton of extra information about multi-generational homes.

Email Monica here or give her a call/text at (512) 496-0606. 

Episode 64, Segment 4: What Does It Take To Get a Millennial to Buy a Home?

As millennials are reaching the typical "home-buying" age of their late 20s, real estate agents are surprisingly not seeing many of them in the market to buy a home. Which begs the question from John Schutze: "What the heck does it take to get a millennial to buy a home?!" Listen as he talks to his own millennial employee to get her take on why this generation continues to wait to purchase a home. 

If you're a millennial and have your own opinion on the matter or just have a question for John, reach him here or by phone at (512) 524-8310. 

Episode 64, Segment 3: The Current Real Estate Market in Lakeway

John Schutze & Mark Hairston of Supreme Lending welcome Keller Williams agent Sean Sutton to the show to discuss the current real estate market in Lakeway, Texas. Listen below:

What's going on in Lakeway?

"Lake Travis, Lakeway, Bee Caves, Spicewood, Sweetwater - that whole area is doing really well," Sean says. "We've got new roads built up, we just got one of the largest HEBs in Texas, a new Lexus dealership - there's just a lot going on and a lot of great places to live and work in Lakeway - it's a great place!"

"The schools in the Lake Travis ISD are incredible too," John adds.

"It's exceptional," Sean agrees. "Lake Travis High School is almost like a small college - it has great leadership and is just a great school." The area also just recently opened up a new elementary school and have plans for a new high school in the works, as well.

"There is something for everybody in Lakeway," Sean says. "I do a lot of luxury home sales, but I'll grab ahold of a $180-190k house - they're out there. You just have to get an experienced realtor that will take the time to find it for you. And if they do pop up and you have your lending stuff in order - if you can get there quick and get that offer in fast - you'll get it. There's something for everybody in Lakeway."  

Keeping it local

"I'm a believer that it's good to have an agent who really knows the local area," John adds. "If you can't be there in 15 minutes, that may be a sign you may not be the right agent for your client. That's how quickly things are moving these days - if a house goes on the market at 5 p.m., it can be under contract by 8 if it's a good house."

"The next thing is making the right offer on the house - it doesn't mean that if you offer full price on a low-priced house, that you'll get it. If you get the offer in correctly and the financials are ready, there's no reason that an experienced agent can't make the transaction come together for you."

Lakeway Inventory

Anything in the 350k and below range goes really fast, we're seeing some activity in the 800-900 range as well, though the million and up range is a little bit slower right now. 

"The million dollar house in Texas will get you a LOT for your money," Sean says. "You just want to make sure that you're getting a lot of value for your dollar. We're looking at the quality of the build, the granite slabs, the type of wood flooring and tiles - these are the things you have to look into."

 "It's a great time to get in - it's better than we've ever seen," Sean concludes.

Sean Sutton, Keller Williams Luxury Homes Division

Sean Sutton, Keller Williams Luxury Homes Division

If you have any questions about the real estate market in Lakeway, you can reach Sean at 512-988-7827, email him, or visit his website at www.seansutton.kw.com

Episode 64, Segment 2: Marketing Through Facebook Live

John Schutze & Mark Hairston welcome Keller Williams agent Sean Sutton to the show to discuss his unique marketing techniques through Facebook's most recent new feature, Facebook Live.

"Every Friday between 12-1 p.m., I pick a luxury home in the Lake Travis/Spicewood area and do a live Facebook video of that home. On the flip side, if we see great value on an inexpensive home that's hard to find, we'll do a short and sweet video of that too. We've got quite an audience that tunes in!"

You can view Sean's videos at his Facebook page right here.

"If you mess up, everyone gets to see it - it's completely live, it's not canned, and you're able to see something that you might not ordinarily get to see from anywhere. You can just check in and I'll give you an intro into what's going on in real estate at a really cool place!"

"I've had as many as 40 people tune in while it's live, and it continues to grow even after the video is done. You can't edit it or anything, and that's what makes it pretty cool."

"I've always had to be really careful around pools and stairs," Sean jokes.

"There's some exciting things going on here in Austin, so it's fun to do videos from some of those cool events and places here in town," Sean says.

To reach Sean, email him at seansutton@kw.com, give him a call at (512) 988-7827, or visit his Facebook page.

Episode 64, Segment 1: Common "Landmines" in Qualifying

John Schutze & Mark Hairston discuss the surprises, or as they call them - the "landmines", that can delay your home loan process once found. Listen in to make sure you don't run into any landmines of your own!

"I've been doing loans here for 30 years, and guidelines in mortgage lending changes over time. Since 2008 specifically, we've tightened guidelines and it's become much stricter to qualify for a loan," says Mark. "So a landmine would be things that happen in the process sometimes that catch us off guard or the client isn't prepared for it that makes it challenging for the loan to get processed and close on time."

"One that comes to mind is child support," John says. "If you pay child support, let your lender know - because it's generally not on a credit report, so we don't know about it if you haven't told us. 

"It's really important to have complete transparency for both lenders and the clients to make sure that we're crossing all our t's and dotting our I's," Mark adds.

"Another thing that we've seen is the money needed for down payment and closing costs needs to be verified," John explains. "Oftentimes when you're getting qualified as a borrower, the mortgage professional says you'll need $20K or whatever for the down payment and you may have $25k in your bank account so we move on - and what we sometimes find out is that that $25K wasn't there - they may have a vintage car that they're selling for cash and then deposit in the bank, but that's not generally an acceptable source for a down payment." 

"The bottom line is really understanding what the acceptable sources are and verifying large deposits," Mark says. "I had a client that sold a boat and a trailer and we were able to document the ownership of the boat and the transfer of title so it was fine, but had he not had all that, it would have been a problem."

"As a borrower, you just have to trust your lender and tell them everything, John says. "It could be a gift from a family member or selling something and that's usually acceptable if we have the right documentation, and if we know ahead of time, we can get that documentation rather than after the fact when it's too late."

"Another big one is commission and self-employment income," John says. "We've had a situation where there was a boyfriend/girlfriend so the girlfriend called to apply on her boyfriend's behalf, it looked great so we took it at face value. A couple days later, the girlfriend called back with her boyfriend's tax returns so she brought them in and we found out that in this case, half his income was from Dell but the other half was from his own business that showed some losses. So that's another thing that we call a landmine, and that's why it's important for us lenders to ask all these questions upfront to avoid the landmine later on in the process."

"Another common mistake we run into is someone opening a new credit card or buying a vehicle or piece of furniture that can end up changing their credit score and possibly make it lower," John and Mark say. "It can change your debt-ratio and make it so that you don't qualify anymore." 

If you have any questions about these "landmines" or want to discuss your own loan application with John or Mark, you can give John a call at (512) 775-6820 or Mark at (512) 789-6967. 

Episode 63, Segment 3: Investing in Austin Real Estate

John Schutze and Andrew Thurston of Supreme Lending have a revealing conversation with local investor and realtor Aaron Farmer about current investment opportunities right here in Austin, Texas.

Are there good investment opportunities in Austin right now?

"Absolutely," Aaron says. "I'm talking to homebuilders right now and their raw building costs are $80-90 per square foot because of the labor shortage - everyone in Austin that wants a job has a job right now. Prices are going up!"

If you believe in Austin and you believe in Texas like I do, I think people are going to keep coming here and moving here.
— Aaron Farmer

"I think issues like transportation need to be fixed, but historically - even in the Great Depression - Austin never got hit the way other places did. We have government jobs, university jobs, etc. The reason the market is going up is demand-driven, mostly. That's why I don't think there's a bubble, or at least not a huge bubble. 

"Rent prices are going up, but there's a lot of value in renting a single-family home or duplex. People that grew up here think everything is expensive and rates are really high, but I don't think they're that high considering the demand and amount of people moving here. It's a new lifestyle for those of us who grew up here."

Places to Consider Investing

Something to consider: 60 percent of millennials say they want to live in a walkable area, so this next generation coming up, which is even larger than the Baby Boomers - they don't want cars, they want to be able to walk places. 

"One area I really love is the 78745 area just south of Ben White and William Cannon and that area, I really think that will be the next 78704. It's got a lot of the same characteristics and there's not a lot of HOAs, so there's much more freedom and less restrictions for your property."

"I look for at least a 1% rule - I want to rent it for at least 1% of what I paid for it," Aaron explains. "If I pay $200K for something then I want to rent it out for at least $2k per month. I'm making long-term investments and use that as my retirement instead of a 401k - so I make sure all my investment properties are on 15-year notes." 

If you'd like to talk more with Aaron about investing in Austin, you can reach him by phone at (512) 585-9520 or emailing him here

If you have any questions for John or Andrew, feel free to call our office at any time at (512) 524-8310!