The growth of the real estate market is gaining momentum due to several key factors. The most fundamental one being the various means for individual investors to invest in the market.
Traditionally, direct investment was the only measure by which money was being infused into the market. However, with REITs and real estate syndications turning common, there are several streams of financial influx.
Okay, I have the money to invest, but where should I invest?
Touted to be the ‘hottest housing market’ amongst the commercial properties, Austin is a goldmine. A Zillow research opined that Austin shall outpace all the other housing markets in 2021.
Also, quite like the previous year, Commercial Real Estate in Austin is predicted to outperform the national market.
The numbers have voiced out the soaring growth of commercial real estate in Austin. However, with such tremendous growth comes the need for understanding the factors of growth. It all boils down to answering the elephant in the room i.e
What is driving the Austin real estate investment market?
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Population growth
Back to the basics of economics i.e. supply and demand that controls the market. With more people in Austin, the demand for real estate is bound to grow.
Also, Austin is the 2nd fastest growing city in the US expediting the process of population growth. The influx of people from different states and countries is also increasing.
Both of these factors contribute to a substantial amount of population growth. This directly reflects in the real estate marketplace where the volume of investing increases. Right now and for the near future, Austin is expected to be a strong seller’s market. And with an increasing millennial population, Austin is also a strong renter’s market.
Henceforth, buying properties or investing in REITs have never seen a better time than now. The historical growth of the real estate market reflects the same with negligible fluctuation.
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Sub-urban lifestyle
Austin is not as flashy as other states but it outperforms almost all other local real estate markets. The reason lies in the Austin ecosystem which is healthy and warm for almost everyone.
Also, Texas as a whole is extremely affordable compared to its immediate counterparts. For a growing millennial population, Austin is an ideal location.
According to US News and World Report, Austin is the ultimate place to live in the US. With growing infrastructure and amenities, the city’s real estate is eyeing greater heights.
The suburban culture at Austin is attracting several entrepreneurs. Here is CNBC suggesting the same stating Austin as the best city for startups. The hustle culture, coupled with a fairly laid-back environment makes Austin a perfect all-rounder.
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Employment opportunities
Forbes ranks Austin as the 9th best place for finding a job and growing in career. With more tech and industrial establishments happening in Austin, the volume of employment generation is high.
The city is also an investors’ dream abode with a healthy economic and social situation. It also boasts of one of the lowest unemployment rates in the country.
All these factors are important reasons why more people are moving into the city. For a job change, for a new branch — Austin caters to every need. Alongside, Austin is not dominated by a single sector or industry. It houses a diverse lot of firms and enterprises that ensure the market is not concentrated and is stable.
This factor also contributes to the growth in demand for commercial properties. Office spaces, co-working spaces, apartments are property classes that are bound to rise.
With different classes in need comes diversity and options for investment. The commercial real estate in Austin is ripe for voluminous growth. Leverage the momentum and invest in quality commercial properties for maximum profits.
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Student housing
The education community contributes a lot to the real estate market in Austin. The University of Texas which is one of the best global universities is of utmost significance.
This assists the growth of the student housing community. With local job opportunities on the rise, students are not restricted to hostels. A fair share of these students turns into first-time homebuyers.
On the flip side, Austin is also known to be a renter’s paradise. Without a doubt, most of the Austin population prefers renting to owning. In the past 3 years, the average rent in Austin has grown by 9%.
Investing in properties with more student occupancy and rental opportunities is a great way forward.
The quality of life, cost of living, price changes are to be factored on priority.
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Tax benefits
One of the major reasons why people hesitate to invest in real estate is the fear of massive taxation. Whilst paying taxes is inevitable, reducing it is easily possible. And in Austin, opportunities for tax exemptions are plenty.
The major one being the absence of state income tax. Most of the Texas real estate firms would have saved huge dollars due to this. If you are looking to stay invested in Austin’s real estate for years, your savings shall accrue into a monumental figure.
In Austin, you can easily apply for depreciation deduction and reduce your tax liability. And if you are investing in commercial properties, this deduction shall be of might help.
And if you plan on selling your properties in Austin, you surely must know this. If you use the proceeds from the sale to invest in another real estate, it shall be considered as an exchange. The best part here is this exchange does not require you to pay capital gains tax or others.
Bottom Line:
Alongside these factors, several local trends support the growth in the Austin real estate market. With normalcy being restored at a steady pace, your investment shall never find a better time to enter the market. From commercial properties like corporate offices to residential properties, the real estate investment market is dynamic. Consult GW Partners the best Texas real estate firm to invest in quality properties for better yields.
