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Investment Property in Austin Texas

 

Today, I am going to talk about a fourplex investment property in Austin Texas, 78741. It is located in South Austin. The address is 2201 Mission Hills, Austin, Texas 78741. I know this street very well given that I used to own a duplex in that neighborhood which by the way, I regret selling it. This fourplex street was, for the longest time, not a very good street to be on late at night. It was not for the meek.

The details of 2201 Mission Hills, Austin, Texas 78741 are as follows. The rent is $3725. The asking price is $489,000.  The estimated taxes are $5229. Its 3612 square feet. Its asking price is $135.88 a sq ft.

The unit matrix is 1×1 $785, 1×1 $800, 2×1 $1060 and a 2×1 $108o.

 

Those are the above facts.

Now lets do a bit of analysis. Does it have a good yield? If you calculate the price divided by the rent one arrives at 10.94. I got that by dividing the Price divided by the rent divided by 12 months. This number is in line with duplexes. So is it a good deal? On the surface it seems alright.

Since I have experience with fourplexes I think that one of the relevant questions to ask is who pays the utility bills. In most fourplexes, the owner pays the water bill and the tenant pays the rest. The reason is that there is only one water meter for most older fourplexes in the city. If the owner is paying the water bill then that yield of 10.94 is not a true representation of the yield.

Also, I know that older properties like these fourplexes tend to have a bit more maintenance than a newer property because things break down over time. Roofs are usually only good for 30 years. Hvac is shorter time frame. Water Heaters go out over time. How about garbage disposals? Stoves and other appliances too? I would go into a deal like this one with eyes wide open.

Another question that I would have is the tenancy. Are the tenants long term? Are they in a month to month lease? Are there problematic tenants? Are there deferred maintenance issues caused by bad tenant relations? Do they have pets? What kind of pets?

Have there been any other fourplexes sold on this street? What price? Can one gather any relevant information about those other fourplexes that might be pertinent to this one? Lets see.

There have been four fourplexes that have sold on this street in the last 360 days.

2302 Mission Hills is pending back up. Its listed at $475,000. The rent that its generating is 3050$. The square feet is 4560. The condition is okay. Its on the market for 104.17$ sq ft.

2215 Mission Hills sold for $408,000 after being on the market for 8 days. It was listed for $379,000 and it was bid up given that there were multiple offers on it. It has 3612 square feet. It was generating $3400.  Good quality renovation. It sold for $112.96 a sq ft.

2217 Mission Hills sold for $516,900. It was listed for $545,000 and was on the market for 73 days. It has 3612 sq ft. It was generating rents of $4899. Very nicely renovated. It sold for $143.11 a sq ft.

Given the condition of 2201 Mission Hills there would be no way that I would offer anything close to the asking price. I would consider it at a lower price though. Also, one has to be very familiar with managing a fourplex. Its imperative to find a good property manager if you don’t have experience managing that type of building.

If you want to check it out or if you have any questions or concerns about the above property or even the analysis in general please contact us. Cheers! 

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