Buyers often ask me about small towns surrounding Austin, such as Kyle, Manor and Hutto, where new homes can be purchased much cheaper than in Austin. Investors and first time buyers have flocked to these areas and purchased many of the homes sold there in the past 4 years, and continue to do so because of the better prices.
I’ve never personally, as an investor, liked these areas simply because it’s hard to know what they will be like in 5 or 10 years from now. I’d rather buy a beat up duplex close to downtown. I believe many of the small outlying areas are over-sold to investors and that they are also over-sold first time buyers (who are really, as far as how they take care of their homes, renters now making a mortgage payment). If you’ve read my investment page on this website, I touch on that in outlining the pros and cons of buying existing homes in established areas versus buying new homes in newly populated outskirt areas. It’s somewhat a roll of the dice, in my opinion, buying in some of “starter home” areas.