Austin provides many opportunities for fix-and-flip investments if you know where to look. Here are four areas to consider for house-flipping properties.

House flipping can be a great way to make a profit if you do your research and plan carefully. Austin, Texas and its surrounding areas offer many fix & flip opportunities. While housing prices have risen considerably throughout Austin, a savvy house flipper can find distressed properties that just need some care and attention. Read on to learn about a few Austin areas where you might consider looking for fix-and-flip properties.

Planning a fix & flip

Photo by Tim Patterson from Wikimedia Commons [Creative Commons]

According to the 2022-23 list of “Best Places to Live in the U.S.” in U.S. News and World Report, Austin ranks 13th in the nation and 1st in Texas. The rankings are based on metrics like value, job market, and desirability.

Several large tech companies are either moving to Austin or expanding their operations here. This is helping to drive a major population boom. A recent report from the American Growth Project at the University of North Carolina ranked Austin as the second-fastest-growing city in the country behind the San Francisco Bay Area.

Austin’s housing prices are high, at least when compared to most other parts of Texas. That said, tools are available to help house flippers find properties. The 70% Rule offers a guide for how much you should spend on a fix-and-flip property. It uses the following metrics:

After-repair value (ARV): The estimated market value of the property once you have completed your repairs and renovations
Estimated repair costs (ERC): The amount you expect to spend to fix up the property
Maximum purchase price (MPP): The largest amount you should pay for a property

You can use the 70% Rule to calculate your MPP using this equation:

MPP = (ARV x 0.7) - ERC

If the estimated ARV for a particular area is $600,000, and you expect to pay $20,000 (ERC) to fix the property, your MPP would be $400,000.

Where to find lucrative fix & flip properties around Austin

The housing market has slowed in 2022 throughout the Austin area, at least when compared to the robust market of 2020 and 2021. The following four areas are worth a look for fix-and-flip projects.

1. Taylor, Texas

Photo by Billy Hathorn from Wikimedia Commons [Creative Commons]

While much of Austin’s growth has occurred within the city, surrounding areas also offer investment opportunities. Taylor is a small town of about 16,000 people located east of I-35 in Williamson County, about a 30-minute drive from downtown Austin. It has seen significant growth in property values. According to Redfin, home prices rose 15.2% to $360,000 between 2021 and 2022.

2. East Cesar Chavez

Photo by Everdayzac from Wikimedia Commons [Creative Commons]

East Austin is where a substantial amount of the city’s growth has occurred in the past 20 years. The East Cesar Chavez neighborhood is located just east of downtown along the eponymous street. While the median sales price has declined slightly since 2021, it stands at $805,000. The area continues to experience new development.

3. Govalle

Govalle is located just east of East Cesar Chavez. It is roughly bounded by Pleasant Valley Road to the west, Airport Boulevard to the east, Oak Springs Drive to the north, and Lady Bird Lake to the south. While neighborhoods to the west have seen rates of growth slow down, home prices in Govalle rose 9.7% to reach $740,000 in September 2022.

Govalle is like a relic of what locals call “old Austin”. It retains the charm of Austin’s former eclectic glory days, where residents find an abundance of one-of-a-kind restaurants, bars, and shops.

4. Milwood

Photo by sbmeaper1 from Flickr [Creative Commons]

Northwest Austin has also seen significant growth thanks to tech companies setting up offices and areas like the Domain attracting a variety of new businesses. The Milwood neighborhood, located on the south side of Parmer Lane between Mopac Expressway and McNeil Drive, has seen property values grow while remaining relatively affordable. Median home prices increased by 10% year-over-year in October 2022.

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4 Austin Areas to Take Advantage of with a Fix & Flip Loan