If you’re looking for Austin multifamily for sale, then you’ll want to know how the market is performing for that type of property.
Recently, multifamily for sale Austin TX has been gaining a lot of attention from real estate investors looking to establish themselves in the market.
The overall Austin market has seen an increased interest in the past two years as rental rates have been rising significantly.
But demand for Austin multifamily properties for sale, in particular, has seen a sharp increase in the second half of 2021.
This was mainly due to people moving back to urban areas and metropolitan cities as the COVID-19 era comes to an end.
This further increases the demand for rental properties in general.
But in this article, we will see why Austin multifamily for sale is worth investing in this year, what advantages this type of property provides in the Austin market, and which are the best neighborhoods for investing.
What Are Multifamily Properties?
If you’re new to real estate investing and you’re trying to buy investment properties, then you’ve probably come across the terms single-family and multifamily homes.
But what does multifamily mean?
The answer is quite simple:
A multifamily home is a property that contains two or more housing units.
In other words, it is a property that can house multiple families, with each unit acting as its own house or apartment.
The most common type of multifamily property in real estate is apartment buildings.
Learn More: Back to Real Estate Basics—What Is Multi Family Real Estate?
The Appeal of Austin Multifamily Homes
So, why should you be looking for an Austin Texas multifamily for sale in 2022?
Simply put, investing in multifamily properties lets you take advantage of the increased rental rates in Austin and maximize your rental income for the next few years at the least.
Since rental rates are not expected to go down any time soon and the demand for apartment rentals is increasing in the city, owning a multifamily home and renting it out can be a lucrative investment.
Although property prices are at their highest, the return on investment that you can expect from renting out units in a multifamily property is well worth the cost.
Additionally, since the market is favorable towards investors at this point, you shouldn’t have a problem obtaining an investor’s loan to afford a multifamily house.
So, let’s see how you can find Austin multifamily for sale that are worth investing in.
How to Find a Lucrative Multifamily Investment Property
The first thing you will need to find investment property in Austin, TX, is a database of Austin multifamily properties for sale.
Accessing such a database requires one of two things:
- Access to the MLS, which is only available to professional real estate agents or realtors.
- Using one of the many online sources and platforms that specialize in listing real estate properties for sale.
Related: The Complete Texas MLS Listings Guide for Real Estate Investors
Of course, hiring a real estate buyer’s agent who has access to the MLS is a very common way of finding properties for sale.
However, investors might opt out of hiring an agent at this point to avoid the fees associated with it.
Instead, it is becoming more common for investors to use trusted online sources, like Mashvisor, to carry out their search and research.
In the following section, I will talk about Mashvisor’s platform and how it can help you find and buy investment properties and generate a passive income through real estate investing.
Finding Multifamily Properties for Sale Using Mashvisor
Mashvisor is a real estate platform that is designed to help investors find lucrative rental properties for sale across the United States.
By gathering data from the MLS and other verified sources, the platform provides the user with all the real estate data that they need as well as the analytics and projections for each listed property.
For example, if you’re looking for downtown Austin multifamily properties for sale, you can use Mashvisor’s Investment Property Search to start looking for this property type in that area.
In addition to allowing you to see properties listed for sale with their price and details, the platform will also show you how much passive income the property will generate and the rate of return that it is expected to have.
By using the several filters that the tool offers, you can search for Austin multifamily properties for sale based on your budget and preferences.
The tool focuses on projecting the return on investment for each property, as well as providing market data and analytics based on the performance of properties within that market using the metrics:
- Cap Rate
- Cash on Cash Return
These two metrics are the most commonly used for analyzing rental properties and predicting their rate of return in the long term.
This next section will showcase Mashvisor’s market data and how useful this information can be when you’re looking for Austin multifamily for sale as a real estate investment.
Related: The Best Way to Find Multi Unit Properties for Sale
Austin Multifamily for Sale – Top Neighborhoods
When it comes to finding an investment property in Austin, TX, you first need to look at how the market is performing.
What you see below is data from Mashvisor’s market report for the city of Austin as of April 2022:
- Median Property Price: $959,017
- Average Price per Square Foot: $544
- Days on Market: 57
- Number of Traditional Listings: 2,963
- Monthly Traditional Rental Income: $2,114
- Traditional Cash on Cash Return: 0.52%
- Traditional Cap Rate: 0.53%
- Price to Rent Ratio: 38
The first thing you will notice from this data is the very high median property price in the market.
This circles back to what I said earlier regarding the drastic increase in property prices.
Additionally, when looking at the entire Austin market, you will see that the rental rates aren’t that high compared to the property prices.
However, the rental rates get higher once you look at specific neighborhoods. These areas have high profit potential for passive income investments.
So, what I have for you is a list of the top four markets in Austin, Texas, where traditional rental properties are projected to yield the highest rate of return on investment.
To determine this, I chose the neighborhoods that have the highest traditional cash on cash return.
As you will see from the data below, while the property prices are significantly lower in these neighborhoods than in the overall Austin market, the rental rates are only slightly lower.
- Median Property Price: $440,800
- Average Price per Square Foot: $308
- Days on Market: 120
- Number of Traditional Listings: 22
- Monthly Traditional Rental Income: $1,821
- Traditional Cash on Cash Return: 2.09%
- Traditional Cap Rate: 2.14%
- Price to Rent Ratio: 20
While the median property price in Johnston Terrace isn’t the lowest on this list, this neighborhood shines when it comes to the average price per square foot.
When it comes to Austin multifamily for sale, you want to find a market with a low price per square foot because you’re buying much larger properties.
This means that you can potentially get one or more extra units in your multifamily property for the same price as in other markets.
In terms of cash on cash return, this market is the most lucrative on this list.
Overall, I see this neighborhood as the best market for investing in an Austin multifamily for sale.
- Median Property Price: $189,000
- Average Price per Square Foot: $438
- Days on Market: 25
- Number of Traditional Listings: 22
- Monthly Traditional Rental Income: $881
- Traditional Cash on Cash Return: 1.69%
- Traditional Cap Rate: 1.76%
- Price to Rent Ratio: 18
If you’re a beginner investor and you can’t afford a multifamily property in most markets, then the North University neighborhood is the best option for you.
This market is the most affordable when it comes to finding Austin multifamily for sale.
While the rental income per unit is on the lower end, the passive income that a big multifamily property can generate will be significant even at this rate.
Of course, with property prices that are this affordable, it is only natural that this market has the second-highest cash-on-cash return compared to other neighborhoods in Austin, TX.
South River City
- Median Property Price: $564,333
- Average Price per Square Foot: $709
- Days on Market: 42
- Number of Traditional Listings: 43
- Monthly Traditional Rental Income: $1,869
- Traditional Cash on Cash Return: 1.25%
- Traditional Cap Rate: 1.27%
- Price to Rent Ratio: 25
The South River City market is an interesting neighborhood to invest in.
This is the most expensive market on this list.
However, if you can afford a property here then it’s worth investing in.
While property prices are high compared to other neighborhoods on this list, it is still a very affordable market compared to the overall city of Austin.
What’s most interesting about this market is that it also has the highest price to rent ratio on this list.
This means that it is more affordable to rent than it is to buy a property in South River City.
As a real estate investor, this is great news as it means that rental properties here will have very low vacancy rates.
Overall, the cash on cash return in this market isn’t significantly high, but it guarantees a steady passive income and long-term profits.
- Median Property Price: $545,732
- Average Price per Square Foot: $320
- Days on Market: 23
- Number of Traditional Listings: 123
- Monthly Traditional Rental Income: $1,986
- Traditional Cash on Cash Return: 1.11%
- Traditional Cap Rate: 1.13%
- Price to Rent Ratio: 23
At first glance, Garrison Park doesn’t seem much more affordable than South River City.
However, it is when looking at the average price per square foot that you will notice a huge difference between the two.
The Garrison Park market has the second-lowest price per square foot on this list.
This means that you will get a larger property with more units for a much cheaper price compared to other markets.
And while this is also the lowest cash on cash return on this list, it has the highest rental income.
So, compared to the larger market, this is a great neighborhood for finding Austin multifamily for sale.
As you can see, Austin multifamily for sale is worth investing in this year.
With property prices still climbing up, it is best to invest sooner than later.
By buying now, you will avoid paying a higher price for the property in the future, and you will also get to take advantage of the increasing rental rates across the nation.
The Austin market, specifically, has seen an increase in the number of investors buying properties there.
This makes sense after the rise of businesses moving to Texas in 2021.
Since multifamily properties allow you to maximize your passive income by renting out multiple units, the increased rental rates will significantly improve your rate of return on investment in the long term.
So, if you’re looking for multifamily for sale Austin, look no further than Mashvisor.
By using Mashvisor, you will gain an advantage and be able to save a lot of time and agent fees.
The platform will let you find the best performing Austin multifamily properties for sale based on their projected cap rate and cash on cash return.
Whether you’re searching for downtown Austin multifamily properties for sale or anywhere else in the US, Mashvisor can help you find lucrative properties and avoid making mistakes that will cost you money in the long run.
To start using our real estate investment tools today, click here to sign up for a 7-day free trial followed by 15% off for life on your Mashvisor subscription.