Dallas-based HomeVestors has ranked Austin as the top market in the U.S. for single-family home investors.
Several other Texas cities made the list: Houston, No. 2; San Antonio, No. 7; Dallas, No. 14; and Fort Worth, No. 16.
“Texas has always been a sweet spot for real estate investing. Its economy is strong and only getting stronger,” said David Hicks, HomeVestors co-president, in an announcement.
HomeVestors earned its national profile by advertising “We buy ugly houses.” The company is a franchising operation that trains its network businesses in ways to attract real estate investors who pay a fee for leads for potential single family home investment properties.
On its website HomeVestors explains why those fees are worthwhile: “We spend millions of dollar annually on local and national advertising. HomeVestors advertising attracts thousands of calls per month from sellers wanting to sell their properties. From those leads, we select only the houses that are most likely to produce the type of financial results that investors demand.”
Hicks, in an announcement distributed Dec. 30, says Austin represents the best opportunity to make money as a single family home investor because of job growth and “relatively low home prices.” HomeVestors says the average home price in the Top 10 markets is under $300,000.
That doesn’t quite jive with the latest data from the Austin Board of Realtors, which indicates that the average home price in the Austin metro area is $311,222, 6 percent more than November 2013. Through most of the year, Austin home sales have recorded appreciation rates in the double digits.
Generally, the more rapidly home prices escalate the more difficult it is to make a profit on rental properties. Still, Hicks touts Austin as a sure bet.
Tracking the single family investor market isn’t a particularly easy undertaking, though I had a much keener sense of the opportunities for this kind of investment as a real estate reporter for the Phoenix Business Journal. Since moving to Austin almost three years ago, I haven’t detected that this is a strong market niche here, but I could be wrong.
I’d love hearing from any local single family home investors or agents who help investors locate properties. What is the current situation and potential within this market?
One interesting side issue that surfaces, however, is how single family home investors impact inventory, which has been at historic lows in the past couple of years, making it even harder for would-be owner-occupants to find suitable purchase options.
Another factor I’ll be keeping my eye on whether the vast number of luxury lifestyle apartments that will flood the market in 2015 impacts the single family rental market, as well.
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By: Jan Buchholz at Austin Business Journal