Austin Real Estate (Unnamed Copywriting) 6 of 10

Austin is a great town to live in. There is a thriving social scene, beautiful landscape, and wonderful weather. If you are thinking about moving, Austin is a great place to choose. But, if you’re coming here, you need to decide whether you want to purchase a house or rent. The advantages to owning real estate in Austin greatly outweigh those of renting, but you need to make sure that your plans for the future match up well with owning a home.

In better real estate markets in the past, this question was not as hard to answer. In fact, the decision became quite simple. If your 5 year plan didn’t necessarily ensure that you were going to stay in Austin, chances are that your best bet was to rent. But, with the real estate market in the shape that it is today, this question is not so cut and dry.

Owning property has some very obvious advantages over renting, and some that are specific to our market that are not so obvious.

First of all, on almost all occasions, your monthly housing expenses are going to be much cheaper if you own your home as opposed to renting. If you are renting, you will be paying a landlord who likely has a mortgage on the property. Although interest rates have been very good for the last few years, these real estate investors will likely have much higher interest rates than your typical 30 year fixed rate. Mortgage lenders charge a premium on the interest rate if you don’t live in the home. So, if an investor has a mortgage, it will likely be at a rate around 7% instead of one in the range of 5.5%, like you can get on a house you are going to live in. You’re going to need to cover that mortgage payment and put profit in the pocket of your landlord if you decide to rent. It’s for this reason that owning is cheaper.

Another big advantage to owning is the tax benefit that comes along with your home. Homeowners get great tax breaks at the end of the year for owning their homes. Interest paid every month is accumulated and written off. Repairs and upkeep on the home can be written off. And, costs associated with obtaining a mortgage are tax deductable as well. So, not only will you be paying less on a monthly basis, you will also be paying less in taxes every year.

But, where Austin is unique is in its value. Unlike the rest of the nation, Austin’s real estate market has not been terribly hit by the recession and the mortgage crisis. For the same reasons that you want to live here, the town has been, for the most part, insulated from the real estate bubble bursting. Having said that, though, it has still lost money on the median home value. So, this is where the decision becomes tough. In a down market like this one, you can expect that very quickly, your house will increase in value. All of the sudden, the five year mark isn’t a very accurate benchmark.

If you’re planning on living here, and don’t know how long you’ll stay, it may not matter. If you buy a house now, you can expect the value to continue to climb, as it has over the last ten months. This is going to put you in a very good position because if you do decide to leave, within a matter of months from now, you should have enough equity in the home to at least sell it and break even.
Making a decision on whether to rent or own is a difficult one. But, in Austin, this decision is a little easier.