Why Invest in Multifamily in Austin, Texas

No. 2 Fastest-Growing

Austin, TX is ranked as the second fastest-growing large metro area nationwide

Austin’s strength is partly fueled by its youthful population. A quarter of the metro’s residents are aged 20–34 according to a recent CoStar market study. The young, educated workforce has attracted businesses offering high-paying jobs, boosting the median household income above the national average and contributing significantly to the city’s economic success. Since 2010, the metro area’s population has surged by roughly 35%.  

9k+ Jobs From New Samsung Chip Plant

More than 9,000 jobs will be provided by the new Samsung Chip Plant

The vibrant labor market in Austin continues to thrive with a robust growth rate of 2.7%, outperforming the national average. Austin’s reputation as a tech powerhouse and its impressive job and population expansion have attracted a highly educated and skilled workforce, driving this upward trend. Excitingly, Samsung recently announced plans to expand a state-of-the-art chip fabrication plant in Taylor, just 35 miles north of Austin. This project is anticipated to generate approximately 9,000 jobs during construction and create 2,000 permanent positions once the plant is up and running. The substantial investment is poised to inject billions of dollars into the local economy, further solidifying Austin’s position as a thriving economic hub.

Business-Friendly Tax Regulations

Texas holds the title for Best State for Business

For nearly 20 years in a row, Texas has upheld its title as the Best State for Business. Texas provides one of the most favorable tax environments in the country — with no state corporate or income taxes — leading to reduced operating costs for businesses when compared to other U.S. states.

41.4% of Households Rented in 2022  

Just under half of households rented in 2022

Renting has become an even more attractive option because of the high cost of buying a home, especially in the desirable downtown area. As of October of last year, the median price of an Austin home hovered in the low  $500,000 range. Austin’s young population is typically more likely to rent, further increasing demand for apartments and rentals.

2.9% Year-Over-Year Rent Growth on Lease Renewals

Rent on lease renewals grew nearly 3% year-over-year

The rental market in Austin continues to thrive, boasting a solid and steady growth rate of 2.9% year-over-year on lease renewals. Impressively, the monthly lease renewal rate in the city stands at a remarkable 55.5%, a clear indication of the high level of resident satisfaction and retention in multifamily properties. As shown in the chart below, while growth is leveling in comparison to years previous, rents are still up substantially.

Demand for Units Jumped 32% Year-over-year

The Austin market saw a 32% unit absorption increase from 2022 to 2023

Austin’s multifamily market has seen a substantial surge in supply, with the delivery of approximately 21,500 new units in 2023. This marks a significant 44% increase from the previous year and represents the highest level of construction activity in the past decade. The continued strength of the Austin multifamily market in 2023 was evident though as absorption remained robust at 8,732 units, representing a notable 32% increase compared to the previous year, despite the rise in available inventory. Even with the rise in supply, these absorption metrics highlight the ongoing robust demand for multifamily housing.

Invest in Austin, Texas

Allers Landing | Workforce Housing

Roers Companies is proposing the new construction of a high-quality 200-unit apartment building located in SE Austin, Texas. This three-story project will help meet the demand for workforce housing—affordable housing for essential workers such as teachers, firefighters, and nurses— in Travis County by offering a variety of unit types ranging from one to four-bedroom, featuring premium amenity spaces including a community room, activity room with kitchenette, fitness room with yoga studio and children’s activity area, business room, multipurpose room, and swimming pool. 

Project highlights:

Strong Returns — This merchant-build project offers a 20.7% net IRR, 111% cumulative return, and an equity multiple of 2.11x.

Rapid Population Growth  — Austin is the number 2 fastest-growing metro area in the United States. This sustained population growth fuels the demand for housing, particularly workforce housing.

Unique Financing — By utilizing tax exemptions for workforce housing projects, Roers Cos. can lower costs, yield strong returns for investors, and address the urgent need for workforce housing in Austin.

Wixby House | Market-Rate Opportunity Zone

Roers Companies is currently constructing a high-quality 371-unit market-rate building with unit types ranging from studios to two bedrooms. Located alongside the Easton Park Master Plan Community, this 2,300-acre development is set to feature retail spaces, housing, 200 acres of planned green spaces and pathways, and 13.1 miles of trail systems. Designed to attract young professionals in the rapidly expanding south Austin area, the project provides Class A housing on McKinney Falls Parkway. Named Wixby House, the development will offer top-notch amenities including an outdoor pool, sun deck, grills, a dog run, fitness center, surface parking, business center, club rooms, and a golf simulator. 

Project highlights:

Returns — We are projecting a 14.20% net IRR, 172.10% cumulative return, and an equity multiple of 2.72x.

Prime Location — This project is located in an area offering a mix of suburban feel with convenient access to the major city of Austin. It is nearby nature trails and parks, while still maintaining easy access to major roads and being near South Austin’s dining and entertainment scene.

Opportunity Zone — Opportunity Zones are an economic development tool that allows people to invest in up-and-coming communities. There are two important tax incentives:

Deferral of Capital Gains: Any gain treated as a capital gain (including 1231 gains) generated from a sale can be deferred until December 31, 2026 (which is paid in 2027) by investing in a qualified opportunity fund.

Tax-Free Gain: Proper investment in a qualified Opportunity Zone project which is held for a minimum of 10 years may render gain generated on sale tax free.

We remain bullish on the continued growth and potential of the Texas market, with a particular focus on the thriving sub-markets within Austin. Our unwavering commitment is evident in our current portfolio of seven projects either in progress or successfully completed. Looking ahead, we have strategic plans to expand our presence across Texas. We selected Austin as the location for our very first regional office, reinforcing our deep commitment and long-range vision for the state.

NO OFFER OF SECURITIES; DISCLOSURE OF INTERESTS: Under no circumstances should any material or information contained herein be used or considered as an offer to sell or a solicitation of any offer to buy an interest in any investment. Any such offer or solicitation will be made only by means of a confidential offering memorandum relating to the particular investment. Access to information about investments with projects undertaken by Roers Companies LLC, Roers Companies Project Holdings LLC, or any of their respective affiliates is limited to investors who qualify as accredited investors within the meaning of the Securities Act of 1933, as amended. Investment outcomes vary. Past success does not guarantee future results.

NO OFFER OF INVESTMENT, LEGAL OR TAX ADVICE. The material contained herein is general information for educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. Nothing contained in this material is intended to constitute legal, tax, securities or investment advice, nor an opinion regarding the appropriateness of any investment. Prior to making any investment you should consult with a licensed investment, financial advisor, legal and tax advisor.

Sources: Austin Investor Interests, CoStar, Newmark, Sofi.com, Texas Economic Development & Tourism, Texas Standard, U.S. Census Bureau