Austin Relo Buyers Purchasing Years in Advance of Move
I’m seeing an increasing number of hybrid investors, mainly from California, who are purchasing a home in Austin in which to live, but they don’t plan to move here for several years, so the home is initially rented to a tenant. These buyers want to cash in on their home (which has become a winning lottery ticket of sorts) and bail out of California some day, but not just yet. They want to pad the nest egg just a little bit more before following their California friends to the new promise land that is Austin Texas.
They are worried that home prices here in Austin will increase in the coming years, as they did during the past 5 years in California. If that happens, they won’t be able to afford the same home that can be purchased in Austin today, especially if their California home drops or stays flat in value. Hence, the “I better buy a home in Austin while they are still cheap” attitude.
Is this a good idea? Yes! Buy a home today in Austin that you’d like to live in, and rent it out for a few years. Later, when you move to Austin, you will already have your place, complete with equity. If you end up not moving to Austin, you have a good investment property that will have appreciated nicely.
So is this buyer an “investor”, or an early-bird relocation buyer? I think she is an investor first and foremost, since the property will be rented upon purchase. The mortgage company will certainly deem this buyer an investor because the home will not be owner-occupied immediately, and the IRS will deem the home a rental property. But this is a new, different kind of investor who is less a traditional investor and more a pre-purchase home owne making plans for where they eventually want to settle.
I guess the only question is, what will Austin be like in 10 years after we have doubled in size and our laid back, relaxed people are elbowed out by our rushed and hurried friends from the West? Or will those rushed and hurried people (who tell me a 60 minute one-way commute “is good”) automatically relax and slow down to the Austin pace once they take a cool dip in Barton Springs, a long shady hike along one of our many greenbelts, and take in a night of fun at one of our many live music venues?Time will tell.