We take pride in our homes. For most of us, our home is our largest physical and financial asset. It's where we spend time with friends and family, where we may go for peace and quiet, and where we spend a lot of our hard-earned money. It is much more than shelter, more than a residence. It is "our place," with all the physical, mental, and emotional ties that implies.
Investment real estate shouldn't carry the emotional attachments of a home, but it can be a critical source of income and financial growth. Financial assets -- stocks, bonds, etc. -- are an important foundation for many investors. Real estate can provide more stability, current income, and predictable long-term growth.
I represent both buyers and sellers of residential and investment real estate throughout the Austin metropolitan area, which means first-hand market knowledge is brought to bear on serving your needs:
My relationship with a home seller begins with a thorough understanding of the client's objectives, needs, and timing. My ongoing analysis of properties and market areas throughout Central Texas provides the basis for a comprehensive analysis of each client's home. Price consultation, property preparation and staging, and broad promotion of each property follow, and frequent communication -- showing feedback, market updates, and ongoing advice and counsel -- round out a successful listing engagement. As a starting point, just ask me for a FREE Market Analysis. That may answer your immediate questions, or it could become the basis of a more comprehensive discussion. That choice is yours.
My approach to buyer representation is also full service – shopping, previewing, price and market consultation, contracting, negotiating, coordination of inspections, appraisals, repairs, and closing details, and follow-up beyond the closing of your purchase to ensure your lasting satisfaction. Looking for a new home? Use Quick Search or Map Search to browse an up-to-date database of all available properties in the area, or use my Dream Home Finder form and I'll conduct a personalized search for you.
In both roles, honest advice and clear communication are what my clients expect. The fact that more than 90% of my business is with repeat clients and their referred friends and family is a sign of success in meeting those expectations. Client ratings that earned my selection for 6 consecutive years as a Five Star Professional -- representing less than 7% of Central Texas agents -- are also very gratifying, and humbling.
As you consider selling or buying Central Texas real estate, you'll find a lot of information on this website that can help. Much of it is updated regularly, so come back often:
National and regional Market Trends is a thorough monthly e-newsletter you'll enjoy.
Five Star Real Estate Agent Bill Morris is published as a Real Estate Market Leader in the March 31, 2018 issue of Forbes! The Five Star award is presented to local professionals who demonstrate outstanding service to their clients. We receive nominations from local home buyers and sellers, who evaluate professionals on the services they provide.
Please congratulate Bill on Facebookhere, and be sure to check out the March 31, 2018 issue of Forbes!
Congratulations once again to Bill and all of the Real Estate Market Leaders!
CEO, Five Star Professional
I received this message a couple of days ago, and I want to thank all of my clients who have participated in the surveys that allowed me this privilege for 8 consecutive years — every year that the survey has been conducted in Central Texas. The Five Star Professional organization tells me that this year they selected less than 600 agents from more than 32,000 in the Austin and San Antonio metropolitan areas!
As you have seen in posts and articles here and elsewhere, strong demand and severe under-supply have driven Central Texas residential prices upward over the past few years. In the early part of that period, residential rents largely kept up, but during the past two years, the supply of rental properties has gained ground. That growth was mostly in the apartment market, but it has affected the ability of owners of other property types to increase their rents. This chart shows the relative changes for single family homes across the Austin metropolitan area during the past ten years:
The change in the relationship between sale and lease prices has complicated opportunities and decisions for some investors.
Real estate investors may use any of several calculations in considering how much they might pay for a rental property. The Gross Rent Multiplier is one of the simplest, and it’s easy to compare without making detailed assumptions about operating costs. Using that measure, here is a ranking of some of the major market areas in the Austin metro:
One very simple rule of thumb some investors use is simply the ratio of gross rent to purchase price, and 1% used to work for many properties. Notice in the far right-hand column of the table that none of those market areas produce that kind of income (on average) anymore. (And they really haven’t for quite a while.)
The Gross Rent Multiplier is essentially an inverse look at that calculation: it’s the purchase price of a property divided by annualized gross rents. For GRM, lower is better. For comparison, a property for which monthly rent is 1% of the purchase price would yield a GRM of 8.3.
(Note that in creating the table above, I first identified the average floorspace (square feet) in each market area for all executed leases reported our MLS system and then searched completed sales in the same market area within a relevant range around that floorspace.)
Does this mean that there are no attractive investment opportunities in North Austin or in Dripping Springs? Absolutely not! Nor do those calculations indicate that investment opportunities are everywhere in Elgin or Kyle or Southeast Austin. You might find a property in Central West Austin that will produce a GRM of 0.8 or 0.9, and you can almost certainly find properties in Manor that would yield GRMs of 0.5 or less if purchased as priced.
There is a lot more to evaluating an investment than floorspace and gross rent and price — property condition, how it will be financed, property age, style, appearance and amenities of the surrounding area, likely price appreciation in the area over the investor’s planned holding period, specific location (busy corner or quiet cul de sac), demographics or crime statistics in the neighborhood, coming changes in and around the immediate area, access (major thoroughfares, public transportation, etc.), and more. Every investor has his or her priorities, property management style, risk tolerance, and target market, and with experience comes to understand the financial trade-offs that may be required by a chosen strategy.
There are also many other financial tools available — Capitalization Rate, Return on Investment (ROI), Internal Rate of Return (IRR), Cash-on-Cash return, and more. If you’re in the market for real estate investments, think carefully about what you want to accomplish, when you want to accomplish it, what you’re willing to do to accomplish it, and what ultimate return you need, short- and long-term.
The information I’ve provided here won’t guarantee making the right decision on any specific investment, but it might help to guide your search. I hope it is helpful.
Mortgage interest rates (30-year fixed rate loans) have been very low for a very long time — mostly 5% or below since early 2009, and mostly 4% or lower since late 2011. There have rumors periodically during each of those years that rates were about to rise. We’re hearing it again this week, and if you look at the most recent history, it certainly looks like the rate increases are really here:
Yes, over the past four months, the average 30-year fixed rate mortgage has gone up to more than 4%! But … let’s adjust the scale and add some historical perspective:
For those of you who don’t remember, interest rates spiked to 18% in the early 1980s, and were consistently above 12% from late 1979 through late 1985 — about as long as we’ve had sub-4% rates in this decade. The long-term average (1972 to Present) was 8.2%, about twice today’s rate.
I actually believe that this time we will see rates rise, but not by much and not overnight. I last wrote about this subject almost a year ago (Interest rates going up?), and I included comparisons to other market interest rates and their relationships with mortgage rates.
That post also includes some insight into how higher mortgage rates affect prospective home buyers. If you’re planning a home purchase over the next couple of years, you should be aware that interest rates do impact your buying power.
So … mortgage rates going up? I think so this year. In a recent presentation, Dr. Jim Gaines, Chief Economist at the Texas A&M Real Estate Center, suggested the increase might be in the 0.5% (1/2 of 1%) range by year-end. I’m going to trust Dr. Gaines’ crystal ball on this.