Austin is Number 1

According to an article in US News and World Report this week Austin, Texas is the number one spot to live and to buy a home.  Just an FYI last year Austin was ranked number two on the list.  The survey examined the top three ranking metro areas to come up with Austin as being number one the last.  Austin beat out Denver, Colorado and my home town of San Jose, California.  With San Jose being such an expensive place to buy a house I’m really surprised that it made the cut.  A part of the qualifying process was linking job opportunities and finding a home that that is affordable.

Well Austin and the surrounding cities are indeed affordable by nationwide comparisons, but the value of housing continues to increase yearly and is becoming more unaffordable for many in our area.  This is based on the fact that Austin home buyers and home renters pay only 27 percent of their income on housing.  Household incomes are not rising fast enough to match the rising home prices according to the Austin Board of REALTORS.

This information tells me that Austin and the surrounding cities continue to be a great place to own residential rent properties, why:

  1. Austin area property values continue to increase yearly
  2. Job growth continues to be strong in our local area
  3. Nationwide there is a tendency for people to rent housing vs. buying a house
  4. Millennials prefer to rent housing vs. buying a house, and there are plenty of them here
  5. As home values continue to increase rental houses in our area build up tax-free equity

All of this adds up that it is a great time to own Austin area residential real estate.

Rick Ebert / Austin, Texas / 2.9.17

Two Congratulations to Mike Gonzales RPM® TRLS

Mike Gonzales is awarded the Austin area chapter of NARPM® “Member of the Year” award by chapter president Michael Ebert. Mike Gonzales’s was cited for his contributions and continuous support to the Austin NARPM® chapter and to his unfaltering assistance to the chapter president.  Mike Gonzales stated that he was both surprised and honored to be the recipient of the award.

This year Mike Gonzales is the president of the Austin NARPM® chapter. As incoming president he takes the reins from outgoing president Michael Ebert.  Austin Landmark Property Services, Inc., CRMC® is proud to have on their staff such dedicated professionals who promote the highest standards of excellence to be found in our industry.

Rick Ebert / Austin, Texas / 6 Jan 17

Why Aren’t Home Builders Building?

This was the headline in a recent post in REALTOR Magazine this week.  There were several reasons cited in the article.  Leading the list among them were increasing regulations regarding building.  The article stated, but did not identify what kind of regulations were adding to the cost of building new homes but the cost was estimated to have increased to 29% of the cost of construction over the last five years. I assume this means not only implementing the regulations but also finding the hardware and training craftsmen to make the changes through trail and error.  These costs can include building around trees, impervious cover, set back requirements meaning less land to build on, the height of door handles and light switches all of which have to be designed and then implemented, and the list goes on and on.  Additionally builders are citing the lack of suitable labor and the increasing cost of lots to build upon. 

My take on all this means that if you own a residential rental right now that you are in a good place.  Take all of the above, now factor in the rising interest rate and probably more to come, and the lack of folks to save for a down payment, and you have a lot more people needing to rent vs. being able to buy a house.  Now add in the millennials who have a penchant for “wanting to rent” as a life style choice vs. having to rent, and this throws more prospective renters into the market.  So with a shrinking inventory or rentals, say in the Austin area, and a bunch of folks moving here to take jobs, coupled with the millennials and with those who can’t afford to buy a house and you get rising rental rates.

Just a few good reasons for owning Austin area residential rentals!

Rick Ebert / Austin, Texas / 23 Dec 16 

What and Who is an Austinite?

In the December issue of Impact, a local monthly area-wide newspaper, the publication cited several facts obtained from the Austin city auditor’s office.

Population: For starters the report cited that the city is expected to increase its population by 88,419 over the next five years.  The report didn’t clarify if the increase was from folks coming here of from children being born here.  Either way that amounts to 49 people a day on the average.  This figure actually seems low to me as Austin has seen in the last e years an average of 100 people a day relocating and other sources indicate that this trend isn’t slowing.  Time will tell.  The number of Austin households is expected to grow from 356,998 from 2015 to 395,686 by 2020 which is just a tad over 10%.  Not surprising, the number of families is expected to expand to 201,371 from 183,564.  That figure is also a bit of a 10% increase.

Income: The average Austinite earns $52,460 a year or $4,371 a month.  This figure is just about on target for the average ALPS renter (actually a bit lower).

Housing Costs:  The report stated that renters spend 48% less on housing costs than homeowners with renters reportedly spending $1,240 monthly for rent and homeowners spending $2,390 for a mortgage payment.  Frankly, I don’t buy those figures.  A small one bedroom apartment in a decent area will run $1,100 a month here, and it goes up from there; way up!  I also base my thinking on our average rent in our managed properties are over $1,500 a month.  Also taking into consideration that the “average” Austinite who earns $4,371 month would typically qualify for a rent of $1,457 – so go figure?  The report also stated that 57% of all households rent vs. 43% who are homeowners.

The Californians are Coming!  Well  no surprise there.  In a recent article in the Austin American Statesman a piece stated that 8 Californians a day migrated to our fair city between 2010 and 2014.  And just what part of California is seeing the most of this outflow?  Guess what it isn’t Silicon Valley but amazingly it is Los Angeles!  And why are they leaving.  Well for one thing they are living in California (my former home state) and what does California have and Austin doesn’t have?  Affordable housing, a “go to” work spirit, and lower taxes.  I do give California the edge on having a great climate!  But the Austin area is “climate friendly” when compared to the rest of the nation.

What Does this Mean?  It means that for us investors in Austin area residential real estate that we are in a good place, a very good place.  Our rentals are located in a growing area that is seeing lots of folks coming here, lots of jobs coming here, and folks are making good money to pay the rent.

Rick Ebert/Austin, Texas / 15 Dec 16

Austin Ranks High on Technology / Office Growth is Strong

Recon, the on-line publication from the Texas A&M Real Estate Center, reported this week that Austin ranked number 3 in cities in both the USA and in Canada that have jobs and services in the technology industry.  Tech jobs in Austin grew a whopping 33.3% from 2013 to 2015 vs. the national average growth of 7.3%.  The article didn’t state how many jobs this growth represented but let’s just agree that it is a bunch!

The article also commented on the Austin office market.  Austin ranked second in the nation on net absorption of office space.  Well this fits nicely with all of the high tech jobs coming to office because those firms can’t work out of a tent!  The Austin office market had the distinction of having the 8th highest office rent.

What does all of this mean to us investors in Austin area real estate?  It means that all of these new comers to the Austin area have to live somewhere and residential rentals provide that need.

This is especially true when taking into consideration that many high tech employees are millennials who seem to have an aversion to buying a house.  I interpret this information to mean that the high paying tech jobs spurn office growth which in turn spurns construction jobs, which spurns jobs in the retail and service industries which in turn spurns a demand for housing.  The Austin area has a strong residential rental market and the outlook seems to indicate that this demand will continue into the future.

So hang onto your Austin residential rentals,  keep them well maintained, and enjoy your profits.

Rick Ebert / Austin, Texas / 1 Dec 16

Africa Coming to Round Rock

Local news sources from KXAN and the Austin American Statesman report that an African themed water resort will be coming to Round Rock and is to be built near the Dell Diamond on 350 acres.  This is no small venture and won’t be ready until 2020.  Planned are a 200,000-square foot indoor water park and a 990-room resort hotel.  Also planned is a 150,000 square foot convention center.  There will be several small man-made lakes with restaurants near the water.  The price tag is estimated to be $250M and will have an estimated 700 permeant jobs.  Of course there will be hundreds of construction jobs over the next few years to pull all of this off.  The developer looked at Dallas, San Antonio, Frisco and Houston before deciding on the Round Rock location. What they liked most about Round Rock was the “can do” attitude that the city takes towards development.  Also coming into play were local events and large evens such as Formula One and the Austin City Limits music festival.

This just makes good sense to me.  Since we still have about 150 people a day coming into our area with about 100 of them landing in Travis and Williamson County these folks need a place to take their families and to relax, and of course to spend money.

These are more good reasons that owning Austin area real estate makes good sense.

Rick Ebert / Austin, Texas / 17 June 16

Austin Area Jobs:  Looking Good – No Looking GREAT!

According to a recent article in the Austin American Statesman Austin added 21,200 jobs from October 2015 to October 2016.  To me that figure represents a small city so it is pretty darn impressive.  Shadowing this figure is the Austin metro area unemployment rate which is reported at 3.2%.  To me this means that anyone who wants a job can have one.  In October, 2015 the unemployment rate was a whopping 3.3% so obviously the Austin area is the envy of any city, anywhere, period.  Drew Scheberly from the Texas Workforce Commission was quoted as saying that the average family income in the area is increasing as are the jobs responsible for that and he expects the trend to continue.  Namely there is a demand for people to fill positions in the areas of medical and high tech, all of which have nice pay scales.  Let’s not forget that Samsung recently committed to invest an additional $1 billon in its local chip manufacturing and plans to add 500 engineering jobs.

So for us investors in Austin area residential rentals the future looks sunny and bright.  I’m glad to hold several residential rentals. 

Rick Ebert / Austin, TX/ 21 Nov 16

Austin is a Landlord’s Market

Yesterday local news station KVUE ran a piece on the Austin apartment situation.  The reporter quoted AustinApartment.com which stated that apartment rents have increased more than 5%  this year.  This trend is expected to continue because, even though many apartment communities have been built construction is expected to slow down because of tightening lending require- ments.  The piece went on to state that renters these days are not necessarily just looking for larger spaces but want amenities.  What does this mean for us landlords of single family dwellings?  It means that we have to offer housing that is well maintained and in good repair.  It also means that we need to offer amenities to go along with the sticks and bricks.  In our area such amenities include ceiling fans in the living room and bedrooms, garage door openers, expanded decks or patios, irrigation systems, and similar items.  These amenities not only shorten the vacancy period but will be reasons for the tenant to remain in place.  Naturally it also adds value to the property.

So owning residential real estate in the Austin area is wise choice that is hard for any other investment to beat.

Rick Ebert / Austin, Texas / 1 Nov 16

Austin Employment Figures are G R E A T !!!

According to a recent article in the Austin American Statesman the employment figures for the Austin area which includes Caldwell, Bastrop, Hays, Williamson and Travis counties is 96.5%.  This is the same figure as last month and it means virtually everyone who wants a job has one.  These counties added over 28,000 more jobs than this time a year ago. That’s amazing and amounts to a 3% annual job growth rate which should be the envy of every city.  Statewide the unemployment rate for this period rose a bit from 4.7% to 4.8% but is still below the national average of 5%.  I wasn’t surprised to read that construction jobs grew by 4,800 jobs over a year ago.  Just about every area around here is seeing some kind of construction work from new construction to remodeling.  Professional and business services added 6,000 new jobs. 

These are great reasons why owning Austin area residential real estate is a good idea and a great investment.

Rick Ebert/Austin, Texas/26 Oct 16

Shelly Longoria Earns RMP Designation

Austin Landmark Property Services, Inc. (CRMC) is proud to announce that Shelly Longoria has the Residential Property Manager designation from the National Association of Residential Property Managers (NARPM®).  Only a few hundred members of NARPM® have earned this designation and that is because are no easy steps to obtain it.  At ALPS we strongly believe that we deliver quality service by having the best educated residential property managers in the industry, and we welcome Shelly to these ranks and invite you to do likewise.  The requirements for the RMP designation are listed below.

RMP® Requirements:

  • Be a current member of NARPM®.
  • Be a currently licensed real estate agent for a period of not less than the 2 previous years. (If your state requires licensing.)
  • Verification of 100 unit years of experience acquired over a minimum of two consecutive years. (One unit year equals management of 1 residential unit for 1 year.) Must manage a minimum of 25 residential units during candidacy period and at the time of achieving the designation.
  • Successfully complete 18 hours of NARPM® approved coursework, plus the NARPM® Ethics course.
  • Earn 50 elective points through service to NARPM®. All Service Verification should be provided on the required 
  • Attend two NARPM® state or regional conferences OR one NARPM® national convention prior to completing candidacy.
  • Submit letters of recommendation from 2 RMP® or MPM® designees and 3 clients. Letters of Recommendation should be completed through online designation packet.

Rick Ebert/Austin, Texas/27 Sept 16