Home to the popular South by Southwest music festival, a burgeoning restaurant scene, a legendary love of local music (it isn't called the "Live Music Capital of the World" for nothing), and a unique culture best summarized by the motto "Keep Austin Weird," Austin is a metropolitan area with a lot going for it. In fact, The Atlantic ranked it third a few years ago in its list of the top cities for recent college graduates, thanks to its rapidly-expanding tech sector and employment opportunities for creative, professional and managerial workers alike.
With the release of All Property Management's Q2 2015 Rental Ranking Report, Austin can also add being the best city in the Southwest for rental real estate investment to its lengthy list of achievements.
Q2 2015 Austin Rental Market Update
For the second consecutive quarter, Austin remained one of the best housing markets in both the Southwestern U.S. and the country as a whole for rental real estate investment. In the Q2 2015 Rental Ranking Report, Austin achieved the top spot in the Southwestern rankings and was ranked 12th in the national rankings, an increase of three spots since Q1 2015 for the latter.
Austin's attractiveness for rental real estate investment is largely driven by its phenomenal annual property value appreciation rate of 9.85 percent, the fifth-highest increase in Q2 2015 for that metric and almost twice that of the national average during that time period. This explosion in property values is largely attributable to Austin's booming population (helped out by its 3.26 percent annual job growth rate, one of the highest in the country), which has in turn led to the moderately low local vacancy rate and median age of housing inventory of just 4.50 percent and 46 days, respectively.
Median rents in the Austin area increased a respectable 4.65 percent year-over-year in Q2 2015. This increase, while slightly below the national average, should be enough to pique the interest of most rental real estate investors.
All things considered, Austin is by far the best housing market for rental property owners in Texas (which is easily one of the hottest states at the moment for those in the real estate industry) and the Southwestern U.S. as a whole, a title that Austin doesn't seem likely to lose anytime soon.
Q1 2015 Austin Rental Market Update
Austin had some of the best property value appreciation over the year ending in Q1 2015, posting increases of over 10 percent; this places it in the top five markets nationwide for this metric. Austin is a major destination for young professionals, and the booming local economy is fueling demand for rental housing. Austin ranks strongly in rental unit availability (from the perspective of the landlord), as well as in past job growth and future job availability. Homes sell quickly in Austin, too, a sign of a very active, relatively liquid real estate market; the median age of Austin's housing inventory is 48 days.
Austin's biggest weakness, compared to other markets nationwide, is the relatively high cost of property taxes. But that's substantially offset by the lack of income tax in Texas; any rental income you earn there is otherwise free of state income tax.
What data is this Rental Ranking Report based on?
To calculate the statistics found in the Q2 2015 Rental Ranking Report, All Property Management gathered data, including the most recent government housing and jobs data, for 75 metros across the United States. Specifically, we looked at home vacancy, capitalization, home value appreciation and job growth rates, changes in rental prices, and the average number of days properties have been on the market to determine which U.S. metros will give investors the highest returns on rental investments. Click here to learn more about the Rental Ranking metrics.
Should I invest in Austin rental property?
Thinking about renting out a property in Austin? Save time, avoid hassle and maximize your rental income by having a professional property management company operate your rental property for you. Click here to get a free quote from a local property manager or call 877-780-4510 to have the All Property Management staff get quotes for you.
All Property Management specializes in connecting rental property owners with professional property managers in communities across the United States. These property managers help set rental rates, advertise properties, screen and manage tenants, collect rent, manage vendor relationships and ensure compliance with local, state and federal housing regulations. They take the hassle and worry out of managing rental properties - all while maximizing rental property owners' rental incomes.