If you’re looking to invest in Austin, you may be considering purchasing a property to use as a short term rental. Oftentimes, you can earn significantly more renting your property out short term than you can long term. Unfortunately, it has become more and more difficult to find properties you can use as vacation rentals in Austin as the city limits the number of permits available for short term rentals.
The City of Austin classifies short term rentals into 3 categories: STR Type 1, STR Type 2, and STR Type 3. Type 1 refers to primary residences used occasionally for vacation rental purposes. Type 2 refers to non-owner occupied single-family investment properties, and Type 3 refers to multifamily short term rentals. Take a look at this article to learn more about the different types of short term rentals.
The City of Austin is no longer issuing Type 2 permits. So, if you want to purchase a property to use solely as a vacation rental in Austin, you have two options. You can look outside the city limits to find a single family property or you can find a unit in a multi-family building to use as a short-term rental.
If you want to buy a single family home, consider the type of people that would like to procure a short-term rental in the Austin area. Austin has become a very popular wedding destination. Consider looking for homes outside the city limits near wedding venues. Areas like Dripping Springs, Driftwood, and Bee Cave are all outside the city limits of Austin and popular for tourists coming into Austin for weddings or simply for a weekend getaway to check out the breweries/wineries. A home with a pool tends to perform well as a short term rental as well. Guests are willing to stay a little bit further out if they can envision a group get-together with plenty of room to relax and play poolside. A number of tourists also come to Austin to enjoy the lakes. Consider looking at lakefront communities in the Austin ETJ such as Apache Shores, Volente, Hudson Bend, and Cuernavaca.
If you want to purchase a condo to use a short term rental, you will want to make sure the condo allows for short term rentals, and that there are STR Type 3 permits available for the building. Below is a list of downtown condo buildings that have units which have been issued STR Type 3 permits in the past. This list is for informational purposes only, please note that condo regulations can change and that permit availability is not guaranteed.
If you are interested in purchasing a property to use as a short term rental in Austin, contact me today. My background in vacation rental management coupled with my real estate experience is sure to give you the upper hand in procuring a solid vacation rental investment property.
Yesterday, I was at a closing, and my client and I decided it would be funny to track exactly how many signatures were required to officially sell the property. I always make jokes about closing saying “you sign your life away” or “you’ll practically get carpal tunnel in the process”. But, we were curious, exactly how many signatures would it take.
As my client continued to sign a variety of forms, many of which seemed to cover the same thing, I started tallying. All in all she signed her name 24 times yesterday, and initialed 6 times. This was part of a 1031 exchange so I speculate she may have endured a little less pain had it not been.
This process got me thinking. I wonder how many signatures and initials are required in total from the listing to the closing. I looked back through my records and uncovered these stats:
All in all my client signed her name 29 times and her initials 28 times. Keep in mind this was for one seller client. Also, this was a multiple offer situation and there was no countering on the contract. All in all, these numbers were actually less than I thought, and, as my client pointed out, almost all signing before the closing was done electronically which makes it a lot easier than by hand.
You’ve been working on getting your home ready to go on the market for a few weeks. You’ve been tackling various projects; cleaning up the yard, touching up the paint, and de-cluttering. Unfortunately, these projects may seem to take more time than you had imagined and now the time has come for your home to be photographed. Preparing your home for photos is a little like preparing your home for a party. Everything doesn’t have to be perfect, but overall you want it to appear tidy and clean.
First on your list should be removing clutter. If you’re running low on time, this means cramming everything in the closets, drawers and boxes in the garage. Obviously this isn’t the best approach for long term, but if you just need the home presentable for photos, this is your best bet. You really want only a few minimal items on all the countertops in the home. Hide all your kitchen appliances in the cabinets, and make sure all the random papers, personal items, and cooking supplies are off the kitchen countertops.
In the bathrooms, place all of your personal items (toothbrush, deodorant, beauty supplies etc.) in a large Tupperware, bath caddy, or box. Place this box under the sink. Your countertops will be clear, and you can utilize this method throughout the showing process as well. Simply remove the box in the mornings and evenings, perform your daily hygiene routine and then put the box back under the sink.
Don’t forget the pet’s and kid’s stuff. Hide food and water bowls in closets. Make sure the litter box is tucked away out of sight. Stuff the kids toys under beds or in the closet, and make sure all of the kids and animals are out of the way for the photos.
When it comes to cleaning your home for photos, you can get away with doing a lot less than you will need to do to prepare your home for showings. For photos, you want to focus on a few main areas: floors, countertops, and windows. Make sure the carpet is vacuumed and steam cleaned if necessary. Have stubborn stains? This stuff works miracles! Sweep and mop the hard surface floors, and make sure to clean the countertops and kitchen appliances. Windows are important too! If time permits, take the screens off. Photos look better without the mesh in the background. If you’re running short on time, make sure to clean the most prominent windows, especially if they reveal a pretty view.
Outside you will want to make sure the lawn is cut and leaves are raked or blown away. Hide your trash bins in the garage or on the side of the house. Nothing ruins a gorgeous first shot of your home more than an unsightly waste bin. Last but not least, don’t forget the lights. Make sure all of your lights are functioning and have bulbs. Open all of your blinds and curtains to let in natural light. Great light really does make a great photo.
Preparing for listing photos leads to great images. First impressions occur with your home’s photos these days. Do yourself a favor and take these steps to ensure your home looks it’s very best when buyer’s see it online. Thinking about selling your Austin area home? Contact me today for more home selling tips.
The Austin Real Estate Market is not showing any signs of slowing down. Yesterday, the Austin Board of REALTORS released the March 2018 market reports for the Austin Area. Across the board, we are seeing median price increases and an increase in the volume of single-family residential sales. With new listings going under contract quite quickly, we are also seeing an increase in the number of pending sales.
In the greater Austin area which encompasses Austin and suburbs such as Round Rock, Georgetown, Cedar Park, Kyle, Buda, and Manor, known as the Austin-Round Rock MSA, the median sales price reached $305,233 last month. That figure is up 4% compared to March 2017’s Austin area median sales price. Even more remarkably, this area saw a total of 2,714 single family sales last month; this is more sales than any previous March.
Within the Austin-Round Rock MSA, the average days on market (ADOM) increased slightly from last year. Homes stayed on the market approximately 3 days longer with an ADOM of 61 days last month. Homes prices under $250K in the greater Austin area averaged far fewer days on market.
In the City of Austin, single family homes spent on average 46 days on market last month. This is about 5 days less than the ADOM in March of 2017. The median sales price within the City of Austin increased only slightly compared to the median sales price of last March. Last month, the median sales price for single family homes in the Austin city limits was $370K.
Inventory continues to be a problem across the board as well. A balanced market consists of 6.5 months of available homes. Within the City of Austin, there is about 1.5 months of inventory; the greater Austin area has about 2.2 months. As buyers continue to seek out more affordable areas to live, suburbs like Buda are facing a shortage in supply. Last month, there was 1.9 months of inventory in Buda. In comparison, in March of 2017, Buda had 2.4 months of inventory. As inventory decreases, buyers are moving farther out to suburbs like Kyle in order to find homes.
If you are interested in learning more about the market conditions in your Austin neighborhood, contact me today. I’d be happy to give you a detailed breakdown of the activity happening in your hood.
The Austin real estate market can be quite competitive. It’s not uncommon for lower priced homes to have more than one offer within the first day of being listed for sale. As a buyer, there are a variety of strategies you can implement to put your best foot forward in this situation.
First, it’s important to find out what is important to the seller. Are they looking for a quick close? Will they appreciate your emotional attachment to the home? Or, do they simply want to accept the offer that will net them the most money?
What you find out about the seller’s motivations will help you craft the most competitive offer. Regardless, of their preferences, a significant amount of earnest money will illustrate serious interest in the home. For example, if you traditionally would put $3,000 in earnest money on a $300,000 home. You could instead offer $5,000 in earnest money. This money will be applied to the sales price if your offer is accepted and you move forward with the purchase, or will be returned to you if you back out during the option period.
That brings me to my second point, the option period. The option period is a specific amount of days you pay for to do all necessary due-diligence on the home. This is typically when the inspection is performed, and if you decide to back out during the option period, your earnest money is returned to you and you just lose the option money. Shortening the number of days in your option period strengthens your offer. Additionally, increasing the amount of option money shows you have more skin in the game. Using the same example as before, consider offering $300 option money for a 5 day option period verse $150 for a 10 day option period. Again, if you proceed with the purchase, this money will be applied to the sales price. Click here to learn more about option money vs earnest money.
Traditionally, the seller pays for the owner’s title policy. Want to make your offer uber competitive? Offer to pay for the owner’s title policy. Similarly, consider taking on the survey expense if needed.
Ultimately, multiple offers are a numbers game. Various items take away from the seller’s net proceeds such as: home warranty, survey, closing costs, and the title policy. Consider removing these from your offer, or come in with a higher purchase price to counteract them.
Illustrating that you have the financial capacity to purchase the home is also critical. If you are submitting a cash over, make sure to send proof of funds. If you are using financing, sending a pre-approval letter is the minimum. A phone call or email from the lender directly to the listing agent is even better. In Texas, the third party financing addendum specifies the number of days required for buyer approval. The shorter the number of days, the more appealing your offer is to the seller. Furthermore, consider waving the appraisal contingency if you can. By stating upfront that you will pay the difference in cash between the appraised value and the offer price, you show the seller that you mean business.
Combine these strategies with what you know about the seller to craft the strongest offer. If the home is vacant, they may value a quick close. Can you move your closing date up to be more competitive? Did you see a beautiful dog house in the back and recognize the sellers as animal lovers? Maybe a hand written note with a pic of Spot will help you win over the hearts of the seller.
If you’re interested in purchasing in the Austin area, don’t be frightened. This market is competitive, but with a strong agent by your side, you can get the home you deserve. Contact me today to get started.
In the City of Austin, there are protected tree ordinances to preserve and promote the growth of healthy trees. If you are interested in developing a lot, remodeling a home, or adding an accessory dwelling unit to your property, it’s helpful to understand these tree regulations.
The City of Austin determines which trees are protected by looking at the size of the tree, type of tree, heath of tree, and the site. Trees are measured at the diameter, at 4.5 feet from the ground. A tree with a diameter of 19 inches or greater is protected by the City of Austin’s tree ordinance.
If you find a tree with a diameter that exceeds 19 inches on the subject lot, that does not mean all your development plans come to a shattering halt. It does mean, that your process is going to be a bit more difficult. You will need to submit a Tree Ordinance Review Application at the same time you submit your residential building plan. The application will be reviewed by a City Arborist, and depending on your plans you may also need to obtain a tree survey and or a tree inspection.
The Critical Root Zone requirements of the Tree Ordinance most limit the development potential of a lot with one or more trees with a 19 inch or greater diameter. Proposed development plans must demonstrate that trees will be preserved. The mechanism the city uses to illustrate root system preservation is known as the Critical Root Zone Area (CRZ). The CRZ is based on the diameter of the tree. The formula to calculate CRZ is tree diameter (in inches) x 2, then convert to feet. For example, for a tree with a 30 inch diameter, the CRZ= 60 ft. CRZ can be visualized as 3 circles that surround the base of the tree. The outermost circle is the Critical Root Zone where development is most lenient, here you can impact up to 50% with a driveway, porch, dwelling etc. In the next smaller circle, the ½ CRZ, you could add a ribbon driveway, etc. as long as it is no more than 4” below grade so usually any structure wound need pries with footing no more than 4” below grade. In the innermost circle, the ¼ CRZ, there must be no impact.
If you’re new to Austin, you may be wondering what these spurts of blue are that you keep seeing along the sides of highways. Well, these are bluebonnets, the state flower. However, they won’t be here for long, so if you want to get an epic bluebonnet picture you should act now. Luckily, I’ve rounded up some of my favorite locations to get that perfect shot.
Ok Muleshoe Bend is a little outside of Austin in Spicewood, Texas. However, it has some of the most beautiful, sprawling displays of bluebonnets I have ever seen. Muleshoe Bend is a 654 acre park on the banks of Lake Travis. It has copious trails for walking and biking, beautiful campsites with water views, and of course, epic bluebonnets.
Lady Bird Johnson Wildflower Center
The Lady Bird Johnson Wildflower Center located near Circle C in southwest Austin is a great place to visit any time of year. However, now it is one of the best places to see the state flower in full bloom. In fact, Lady Bird Johnson played a large role in creating all of the bluebonnets we see along highways today through her beautification efforts. She incentivized folks to grow wildflowers by personally writing checks for winners of her Texas Highway Beautification Awards.
Along the edges of 360 near the loop 360 bridge, aka Pennybacker bridge there are often tons of bluebonnets. You will also find a scattering of Indian Paintbrushes and other wildflowers here. If you park underneath the bridge near the boat ramp, you can easily walk to a number of good photoshoot locations.
Willow City Loop
Just northwest of Fredericksburg off Hwy 16 is the historic 13-mile Willow City Loop. It offers one of the most picturesque displays of Texas wildflowers. In addition to the colorful fields or wildflowers, there are rolling hills and a beautiful canyons speckled with live oaks, pecan and mesquite trees.
Many people will tell you that the best time to sell your Austin area home is in the spring. However, is now really the best time to think about listing your home for sale? Well, it may be and it may not be. For many Austin residents, spring likely is the best time to sell your home. However, depending on what type of home you have and where it is located, you may be better off waiting if you want to sell for the most money.
For homeowners in the City of Austin, spring probably is the best time to sell your home. Over the past three years, the median home sales price for single family homes in the city limits has been highest in the summer months. In 2015, the highest median sales price for these homes occurred in May at $360,000. In 2016, the highest monthly median sales price was $377,470 in June. Last year, we saw the highest median sales price occur in June again with the median sales price increasing to $407,500.
As you can see, single family homes in the City of Austin really do sell for the most money in the spring. It’s not all about the price though. If a quick sale is important to you, the spring market is great for that too. The last column in the chart above represents the number of days a home is on the market before it goes under contract. Over the past three years, the median days to sell in the spring months was almost always less than 2 weeks.
If you’re thinking you want to sell your Austin home for the most money in the least amount of time, now is the time to start preparing to sell your home. Keep in mind that there is usually about a month of time from the date the contract is accepted until the closing date. In order to close in June, you want to list your home in April or May.
Now, if you are thinking about selling your condo in the City of Austin, now may not be the best time to sell. City of Austin condos had the highest median sales price in December for both 2015 and 2016. In 2017, the highest median sales price for condos in the city limits occurred in October when the median sales price was just under $305K.
If you don’t live in the city limits of Austin, spring may not be the best time for you to sell either. While single family home sales in Travis and Hays County conformed to the spring is the time to sell trend, homes in Williamson County did not.
In Travis County, May was the month with the highest median sales price in 2015. In 2016 and 2017, June yielded the highest median sales price for single family homes in Travis County with sales prices of $350K and $370K respectively. Hays County single family home sales showed the highest median sales price for 2015 in June with a price of S250K. In 2016, the highest median sales price occurred in April. Last July yielded the highest median sales price for 2017 with a median sales price of $270K.
Conversely, winter seems to be the best time to sell single family homes in Williamson County. In 2015, the highest median sales price was $252,500 which occurred in December! A month usually not associated with peak selling season. In 2016, November yielded the highest monthly median sales price, and in 2017, December led again with a median sales price of $287K. I should note that in 2017, the June median sales price was a close second with a median sales price of $286,713 and a much shorter number of days on market, 15 days compared to 40 in December.
If you’re thinking about selling your home this year, you really need to look at the market activity in your specific neighborhood. I’d be happy to run individualized reports for you; just contact me. Alternatively, if you are mildly curious what your home is worth, click here for a quick home worth estimate.
Recently, I was talking to a prospective client. We were discussing commissions and he commented, “well, a listing agent really doesn’t do anything”. I resisted the urge to scream obscenities at his face, and calmly replied that a good listing agent does a lot more than you think. Besides, taking care of the essential duties when listing a home for sale, I’ve gone above and beyond for my Austin area real estate listings more times than I can count.
So, what exactly does a listing agent do? Well, first and foremost, I cover the basics. I help you price your property, prepare it for the sale, market it to prospective buyers, negotiate the offers, and ensure a smooth closing. I don’t just put a sign in the yard, a lockbox on the door and say good luck.
When I help my seller clients prepare their home for sale, that sometimes means I’m getting down and dirty with them. I want the home to show the best it can, after all, any listing is a reflection of my work. In the past, I have helped clear out the belongings from a home that had been vacant for over 5 years, mopped the floors of a condo minutes before the photographer arrived, coordinated extensive remodels so that my seller would get the highest price for his home, and even mowed the lawn. I also have personally staged a number of my vacant listings. A staged home sells quicker and for more money than a vacant property so I lug couches into and out of homes, and add décor touches.
Once the home is ready, I pay a professional photographer to capture the property in its best light. I try to always meet him there to make sure he captures unique elements of the property, and then I take those images and create a full-fledged marketing campaign. I stay up late designing flyers, spreading the images through social media, and promoting the property through a plethora of other modes.
Sure I put the property on the MLS, as any competent agent would, but I also field numerous phone calls and emails from prospective buyers, coordinate showings, and when it’s necessary personally show the home. I host open houses, and door knock the neighborhood to make sure all the neighbors no your home is for sale. I put your home on REALTOR tours to make sure all the agents who work your neighborhood know the home is for sale as well.
While your home is on the market, I make sure it stays in tip-top shape. This winter, we had an unprecedented amount of freezes in Austin. I regularly attended to my listings, making sure the heat was on, cabinets were open, and just to be sure the pipes wouldn’t freeze, turned the water off. I joked with one seller client recently that this was the hardest part of my job; I had bloodied my knuckles and bruised my arms countless times while struggling with a wrench to move that tight knob to turn the water on and off.
At another listing of mine, I noticed someone had tracked mud all across the brand new carpet. I personally got on my hands and knees and scrubbed and sprayed that carpet till it looked good and new.
My listing efforts are not limited to physical labor. A few years ago I was helping a young lady sell a home she had inherited in East Austin. Unfortunately, her grandmother didn’t have a will and the mortgage company refused to release the payoff statement to her. This was delaying closing and something had to be done. I must have called, and emailed at least twenty high up employees at the bank. I sent out hand-written notes, and finally, I got through to someone, and she was able to send us the payoff statement.
Of course, I handle all the other tasks a good listing agent takes care of too. I negotiate for my clients’ best interests, prepare net-sheets for incoming offers, vet prospective buyers, and ensure the final settlement statement is prepared correctly.
I’m sure this sounds like a lot of work, and don’t get me wrong it is, but I love every minute of it. I take great pride in my work, and feel a great sense of accomplishment when my client sees the amount of money they made on their home sale. If you’re looking for a go-getter, who works hard to ensure your Austin area home sells for the most money, contact me today.
When you put an offer in on a home, one of the negotiable items in the contract is a residential service contract, more commonly known as a home warranty. It’s quite typical for the buyer to request that the seller contribute a certain amount of money towards the buyer’s home warranty purchase. Why you should request a home warranty, how much money you should request towards a home warranty, and how to choose the right home warranty are all questions worth asking when you are purchasing a new home.
Why should you get a home warranty?
A home warranty reduces the costs of home repairs by providing an insurance policy of sorts on the maintenance of your home. If an appliance breaks, you will pay a service fee for the repair which is much less than the actual repair cost. There are really only a few situations when I will not recommend my client get a home warranty. If the home is a fixer upper or tear down, it doesn’t make sense to purchase a home warranty. New construction homes sometimes come with builder’s warranties. It’s a better use of my client’s funds to hold off on the home warranty if the builder’s warranties are as good or better than those offered by a home warranty company. If you know it’s a multiple offer situation, you may not want to request a home warranty. The home warranty weakens the offer by requesting an added expense for the seller. Otherwise, I will advise my clients to request money towards a home warranty. My job is to protect my client’s best interests so I will usually write in that the seller will pay a certain amount towards my client’s home warranty. If the sellers don’t like this part of the contract, they can always make a counter offer, but the initial offer is going to be skewed towards my clients’ best interests.
How much does a home warranty cost?
Since you have to put a monetary amount that the seller will contribute towards the buyer’s home warranty in the contract, it’s a good idea to have a rough idea of home warranty costs before you submit an offer. Home warranty costs vary significantly based on the type of home you are purchasing; a condo home warranty will cost less than a home warranty for a duplex with double the number of appliances as a single family home. The average amount I recommend in the contract is $500, this will cover an extensive condo plan with extra money for added coverages, and it will cover a mid-level policy for a single family home. Once we are under-contract on the home, I send my clients brochures from a few different companies so they can choose the policy that’s best for them.
Which home warranty should I choose?
Choosing a home warranty policy is challenging. You need to determine what coverages are most important to you, compare annual costs as well as service fees, and take a look at the fine print to really determine which one’s the best. There are a number of different home warranty companies out there, and they all have multiple products to choose from. Usually they will have 3 service tiers, a basic plan, a mid-level plan, and the ultimate plan. Reviews.com did a great assessment of the options available for consumers looking to purchase a home warranty. In their article, they point out some great tips for finding the best home warranty company for you, and they also made a key conclusion that rates may be negotiable. Calling the home warranty company directly can often lead to obtaining the best rate.
If you’re planning to purchase a home soon, it’s a good idea to understand the different home warranty options available to you. Contact me today, and I can send you brochures for a variety of home warranty providers in the Austin area.
Erika Rae Albert
Sharing my Austin real estate updates, home owner tips, & more.
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