Californians Own 10% of South Austin Rental Homes

I recently harvested thousands of tax records for marketing purposes. I pulled from the Travis County property tax records database all of the “absentee” owners of single family homes in South Austin, including area codes 78704, 78745, 78748, 78749, 78739 and 78736.

An “absentee owner” is one for whom the mailing address is different than the property address. This method of determining which homes are rentals is not perfect, but there is no better way.

Prior to filtering and deduping the raw data, I had 4,374 names, many of whom own more than one property. Of those, 3,487 (80%) have a Texas mailing address. Of the Texas addresses, 3,068 have a Central Texas (Austin area) mailing address.

So, 80% of the rental homes in South Austin are owned by Texans, and 70% are owned by local landlords who live in or around Austin.

Which state is the next highest represented by ownership?

You guessed it…Californians own 467 of the homes in my sample data, which represent 11% of the rental homes in South Austin. All other states were way behind, but the next highest was Arizona with 37 properties, Illinois with 26, Washington with 21, Hawaii with 20, Colorado and New Mexico with 16 each. The rest of the city would probably produce similar ratios and ownership breakdowns, though I would expect the California percentage to be higher in the newer outskirt areas than they are in South Austin.

Of the 4,374 names I started with, 955 were removed as duplicate mailing addresses. In other words, 955 rental properties in South Austin are owned by an investor who owns at lease one other rental property in South Austin. This means about 20%, 1 in 5, of the rental property owners in South Austin are multi-property owners. Indeed, Sylvia and I are in that category as well.

And thus is the answer to the question of why I market mainly to rental property owners. Our background and area of expertise includes much experience dealing with investors and renters. Many of the listings we take are either vacant or occupied by renters. It requires a somewhat different mindset and set of abilities to navigate the many issues that arise in helping a home make the transition from rental property to beautiful sales listing.

When selling an owner occupied home, the seller is, in most cases, a willing partner in the process (let’s not talk about divorcing sellers). The seller is a cooperative team player who will clean the house, keep it clean, put away dirty dishes, clear their clutter, take care of the yard, leave the home for showings, etc. Not so with a tenant.

Also, there is often a lot more deferred maintenance to deal with before listing a rental home. Tenants are often slobs and are uncooperative and unhelpful to the sales effort. This requires patience and diplomacy when determining whether it’s best to let the tenant move out before selling or if they might be converted to at least a tolerant and accepting player in the process. The yards on rental homes typical are not as well kept so there are “curb appeal” issue to address as well.

Selling renter occupied or vacant homes is a hassle. So why even mess with these kind of prospective listings? Why market to these owners?

Because an absentee owner, especially if out of state, is more likely to value the services of a Realtor than an owner occupant. They generally need guidance and assistance to a higher degree than the owner occupant. There are exceptions of course. Of the many shabby and worn looking listings I show, most have obviously been rental properties (the required “tenant” deadbolt gives it away sometimes) and the seller and agent did a poor job of bringing the home up to the condition needed to compete on the sales market.

These sellers needed better help than the Realtor they hired was able to provide. Or perhaps the Realtor was unable or unwilling to have the difficult conversations needed when listing a somewhat worn property, such as the “you’re going to need to spend $3,000 to $5,000 on new carpet, paint and landscaping before we can list it” conversation.

We enjoy those types of challenges because we are good at overcoming them and creating a good outcome. So, we LOVE absentee owners and their properties.

10 thoughts on “Californians Own 10% of South Austin Rental Homes”

  1. Steve

    Another interesting post. We have a rental on my street and thanks to TCAD, I realized the individual is local and lives in the neighborhood. However, she could probably use you. The place is not trashed but me and two other neighbors have actually considered purchasing the property to spread the rental cost but more importantly, purchase it, sell it, and have another nice home in our neighborhood. We in Texas Oaks are pretty emotional about our property, as I am sure you are in your new house in Oak Hill.

    Plus, it looks as if Oak Hill is having a makeover, based on the AMD development, new apartments, and article in Saturday’s Statesman. People have found our little jewel we call South Austin.

    I appreciate your statistics and your earnest evaluation of our local market. When I read about Las Vegas, Phoenix or Florida, I realize its guys like you (and your wife) who are helping keep our market stable.

  2. Steve:
    Did you take into account that some “owners” might be companies (Inc. or LLC, etc) that could have local addresses, but be owned by out of staters? One of my clients is from CA – and all of her properties are individual TX LLCs, according to WCAD and TCAD, with a TX mailing address. When you check with the TX Secretary of State, these LLCs are all owned by a Real Estate Trust from CA. That’s as far as my search went to see if she was legit.

  3. I understand your pain. I am here in Phoenix, Az and the real estate market was overrun by investors as well. I moved about a year ago and kept my Phoenix area home as a rental. Now I am dealing with the same issues.

  4. I always find that the Crossland Team has such fantastic information. Yes, their information appears right on when considering my experiences.

    I’ve also noticed that Austin is very unique in that Realtors are more actively involved in Rental Houses than in other parts of the country.


  5. My friend does Real Estate in Louisiana, and she says that their MLS is not anything like Austin’s. Rentals kinda play second rate. They only focus on residential sales.

  6. You all are the greatest with numbers, evaluations, statistics. This is off-subject (kind of!) but would you know what percentage of Texans own New Mexico properties?


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