By Celeste Messer Your Kyle and Buda Real Estate Expert
What is it with all of the homes for lease in Kyle?
When I first moved to Kyle Texas six years ago you never saw a FOR LEASE sign in the neighborhoods. Then a couple of years ago it seemed that you couldn’t go down a street without seeing one. You can see in the numbers below that this trend seems to have leveled off.
The two major factors I saw causing the investors to come to Austin Texas in droves were 1) The California housing price boom and 2) The popularity of books and tapes about real estate investing such as “Rich Dad Poor Dad” and the Carlton Sheets tape series on purchasing a home with zero down.
Regarding the California home price boom a few years back, many Californians made so much money on the sale of their homes that they headed to places like Texas to cash in on what they considered to be an area that had not yet been hit by the price boom. Investors were buying homes left and right I heard of stories in which a single investor purchased 10 homes in a neighborhood! Their goal was to purchase homes in neighborhoods that were primarily owner occupied.
With regards to purchasing homes with zero down programs. Lenders were much more willing to lend money a few years ago than they are today. In addition some potential buyers were disappointed to learn that while some books touted that you can purchase a home with zero money from your pocketbook and walk away with a check in your hand, failed to mention that this is illegal in the state of Texas. (That’s not to say there weren’t deals to be made just as there are today…for those that have the money. If you do…call us!)
Anyway back to the leases in Kyle Texas. Because the prices of single family homes in Kyle were lower compared to a comparable home in Austin, Kyle got more than its’ share of investors. You can see on the chart that we saw a huge spike in the number of leased homes between 2004 and 2005. This was when the California investors were heading our way.
The good news is that you can see in the estimate for this year, (I took the current leased YTD and doubled it to estimate the total years leases), we are continuing to see a leveling off. Again you can attribute this to the California Sales Market. Many of the leases in the last couple of years are actually lease renewals, that is one tenant moves out another moves in, rather than a lot more homes going to an investor. Actually with the markets taking a dip in areas such as California, Las Vegas and Phoenix (the states most of my investors came from), some of the investors found their cash assets were no longer what they were and with the Texas taxes and home management fees, they decided not to hang on to their properties. Many are selling them, or, unfortunately many are walking away. In the upcoming Travis County foreclosures auction scheduled for August 5th, 52 properties up for auction are owned by out-of-state residents. Some of these will likely go back into the hands of a owner occupant. So like everything else in the world around us, real estate goes in cycles and things seem to work themselves out. You just have to hang in there long enough to see it.
How much does it cost to Rent a home in Kyle? Or conversely how much rent can I expect to get if I wanted to rent out a home in Kyle?
For a few years because there were so many homes on the market the lease prices were kept low. Tenants had a lot of options out there to lease and therefore if a landlord didn’t want the home to sit vacant he/she would be very competitive in the pricing. However there are less on the market now (only 22 active in all of Kyle) and you can see on the chart below that we are starting to see the prices drift up a bit. I would expect when the Hospital, Target plus and other future businesses start opening we’ll see an increased demand for the rentals which in turn will in turn cause prices to go up as well. (The 2008 average lease price is the average lease price for all homes that went under contract from January 2008 to mid year.)
If you are looking to buy or sell real estate in the Kyle, Buda or Austin Area, please call us or send us an email. We’d love to be your realtor of choice.
Have a great one!
Celeste
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