As reported recently in the Austin American Statesman, rents in Austin and in the Austin area continue to increase. A recent survey showed that the June rent hit an all-time high average of $1,350 a month up 5.6% from June 2018. Charles Heimsath, a local real estate consultant, stated that rents are up 4.8% from the start of the year that is close to 1% a month. He went on to state that average rent for a one bedroom apartment is $1,179 and $1,480 for a two bedroom unit. Other news for investors in local area residential rentals is that the occupancy rate in June was 94% up from 93.2% in June 2018. Why all this good news for us? We have a low unemployment rate coupled with thousands of people coming here (a lot are from California) and they are younger professional types who prefer to rent vs. buy. This is especially true of the folks coming here in the high tech industry, especially those from the Golden State, where rents can often be triple of those found in the Austin area. And in yesterday’s issue of the same paper there was an article that stated there was a growth rate of 6.8% of high tech jobs in 2018 and that high tech jobs in 2018 accounted for almost 16% of the total job market.
Beverly Kerr of the Austin Chamber of Commerce stated in the article that the high tech industry is the driving force behind the strength of our regional economy. So what does all of this mean for us investors in local residential rental real estate? It means that rents are rising and it looks like they will continue to rise. It means that home prices are rising and will continue to rise. It means that we can take advantage of this situation by purchasing a well suited income producing property that will increase in value tax free while the expenses are covered by incoming rents. I practice what I preach and recently purchased another rent home in Hutto, an area that I think will do very well in the future because the numbers are good now and should do well tomorrow.
Rick Ebert / Austin, Texas / 8 August 19