| Austin Cool Properties- unique condos, lofts, apartments, and townhomes |
| Austin Cool Properties- unique condos, lofts, apartments, and townhomes for rent |
| 512-693-7231 |
Eeyores Birthday Party Drum Circle
The start of 3 days of music & fun
Congress Avenue
Bats
Bats
The green city of Austin in Fall
Why have rental rates in Austin gone though the roof? There are 3
main reasons. One is the boom/bust/boom cycle the Austin economy has
gone through the last 7 years. The 2nd is the apartment to condo
conversion craze in central Austin, and most important is the HUGE
property tax increases that central Austin has seen. It is impossible to rent
an apartment for $600 per month in central Austin if the property taxes are
$500 per month!
When the NASDAQ stock market crashed in early 2000, technology
companies in Austin were hit hard and had to lay off many employees.
Austin also had a large number of dot-com companies that went under in
the tech bust, so all of their employees were laid off. Tens of thousands of
Austinites lost their jobs. This put the Austin economy in a tailspin and the
occupancy rate of apartment rentals plummeted down to around 87%.
With the occupancy rates this low, rental rates also plummeted. With rental
rates so low, all construction of rental property stopped and all planned
projects were pulled. This was very shortsighted of developers.
From 2001 through 2006 almost no new rental property was built in
Austin. The Austin economy though steadily improved during this time.
Starting in 2004 the Austin economy really started to pick up steam. Austin
became known as the place to be, and many people moved to Austin from
all over the country. The Hi-Tech business also improved greatly and
Austin tech companies started hiring again. The occupancy rate during this
time period steadily climbed. Then in the fall of 2005 Hurricane Katrina hit
the New Orleans area. Thousands of people from the New Orleans area
moved to Austin and rented thousands of apartments. In a city the size of
Austin, a thousand apartments being rented in a span of a few weeks,
immediately increased the occupancy rate to 95% or 96%. The Austin
economy as steadily grown since the fall of 2005 and now the occupancy
rate is near 100% in certain areas, especially central and downtown Austin.
Finally, new rentals are being planned and built, but this takes time. Also
developers are targeting the high end market and the average new rental
being built in central Austin is priced at over $1100 for a 1 bedroom
apartment. With the occupancy rate near 100% in certain areas, it has
turned into a landlords market, with landlords able to raise rent by hundreds
of dollars per month.
Central Austin has seen the worst of the rental increases with many older
cheaper apartments being bulldozed for new high end condos or remodeled
and sold as condos. Some apartments on South Congress that used to rent
for the mid $600's just a year ago are now sold as condos and renting for
over $1000. There are actually thousands of fewer apartments in central
Austin then there were just 2 years ago, and supply and depend means
prices go up..
Last but not least is property taxes. Rental property has no exemption
from property tax increases. (If it is your homestead, it can only go up
10% a year in Texas) Little shack houses in central Austin are now being
appraised at $350,000 by Travis County Appraisal District. At the 2.5%
tax rate, that means the property taxes are $8750 a year, or $729 per
month! That does not include mortgage payments, insurance, PMI,
repairs etc. I had someone the other day ask me why there are not any
decent landlords willing to rent out their house in central Austin for $800
per month anymore. It is not because landlords are greedy, it is because
they can't break even at that rental rate, and would have to take a big loss.
The reason we don't rent houses is that even at $1200, houses for rent are
usually in terrible shape.
Last thoughts on subject. Please don't blame us that rental rates have
skyrocketed!! We have had a lot of people lately get angry at us about
rental rates and get nasty. I wish we controlled the multi-billion dollar
Austin rental market, but we don't. We can only show you the best options
available in your price range in the Austin market. We are really here to try
to help you, but can't change the market. If you are on budget, you might
unfortunately have to consider living further from downtown than you are
used to.
main reasons. One is the boom/bust/boom cycle the Austin economy has
gone through the last 7 years. The 2nd is the apartment to condo
conversion craze in central Austin, and most important is the HUGE
property tax increases that central Austin has seen. It is impossible to rent
an apartment for $600 per month in central Austin if the property taxes are
$500 per month!
When the NASDAQ stock market crashed in early 2000, technology
companies in Austin were hit hard and had to lay off many employees.
Austin also had a large number of dot-com companies that went under in
the tech bust, so all of their employees were laid off. Tens of thousands of
Austinites lost their jobs. This put the Austin economy in a tailspin and the
occupancy rate of apartment rentals plummeted down to around 87%.
With the occupancy rates this low, rental rates also plummeted. With rental
rates so low, all construction of rental property stopped and all planned
projects were pulled. This was very shortsighted of developers.
From 2001 through 2006 almost no new rental property was built in
Austin. The Austin economy though steadily improved during this time.
Starting in 2004 the Austin economy really started to pick up steam. Austin
became known as the place to be, and many people moved to Austin from
all over the country. The Hi-Tech business also improved greatly and
Austin tech companies started hiring again. The occupancy rate during this
time period steadily climbed. Then in the fall of 2005 Hurricane Katrina hit
the New Orleans area. Thousands of people from the New Orleans area
moved to Austin and rented thousands of apartments. In a city the size of
Austin, a thousand apartments being rented in a span of a few weeks,
immediately increased the occupancy rate to 95% or 96%. The Austin
economy as steadily grown since the fall of 2005 and now the occupancy
rate is near 100% in certain areas, especially central and downtown Austin.
Finally, new rentals are being planned and built, but this takes time. Also
developers are targeting the high end market and the average new rental
being built in central Austin is priced at over $1100 for a 1 bedroom
apartment. With the occupancy rate near 100% in certain areas, it has
turned into a landlords market, with landlords able to raise rent by hundreds
of dollars per month.
Central Austin has seen the worst of the rental increases with many older
cheaper apartments being bulldozed for new high end condos or remodeled
and sold as condos. Some apartments on South Congress that used to rent
for the mid $600's just a year ago are now sold as condos and renting for
over $1000. There are actually thousands of fewer apartments in central
Austin then there were just 2 years ago, and supply and depend means
prices go up..
Last but not least is property taxes. Rental property has no exemption
from property tax increases. (If it is your homestead, it can only go up
10% a year in Texas) Little shack houses in central Austin are now being
appraised at $350,000 by Travis County Appraisal District. At the 2.5%
tax rate, that means the property taxes are $8750 a year, or $729 per
month! That does not include mortgage payments, insurance, PMI,
repairs etc. I had someone the other day ask me why there are not any
decent landlords willing to rent out their house in central Austin for $800
per month anymore. It is not because landlords are greedy, it is because
they can't break even at that rental rate, and would have to take a big loss.
The reason we don't rent houses is that even at $1200, houses for rent are
usually in terrible shape.
Last thoughts on subject. Please don't blame us that rental rates have
skyrocketed!! We have had a lot of people lately get angry at us about
rental rates and get nasty. I wish we controlled the multi-billion dollar
Austin rental market, but we don't. We can only show you the best options
available in your price range in the Austin market. We are really here to try
to help you, but can't change the market. If you are on budget, you might
unfortunately have to consider living further from downtown than you are
used to.
Unfinished Intel building in downtown Austin, one of the last
signs of Austin's 2001 tech bust. Was finally demolished in
late Feb. 07
signs of Austin's 2001 tech bust. Was finally demolished in
late Feb. 07
