With Austin renters being priced farther and farther from the central city, one would think that landlords in the most expensive neighborhoods are cleaning up from the lucky few who can stay and pay their rising rates.
If one assumed such a thing, however, one would be wrong. Last month, our data-crunching friends at NeighborhoodX created a chart that shows the opposite is true: Realizing significant income from properties in high-rent neighborhoods is more difficult than it is in areas where rents tend to be lower.
Comparing small investment properties in different Austin neighborhoods, NeighborhoodX looked at how much square footage $1 million buys and calculated likely rental income from that property based on current rents.
The resulting chart, below, bears this conclusion out in some interesting—and a little surprising—ways. East Austin neighborhoods that are central but not downtown-adjacent—Windsor Park, Pecan Springs/Springdale, Govalle—dominate the top rental income spots.
Some exceptions are areas that seemed destined to remain rental-dominated, such as Parker Lane (east of I-35 between Riverside and Oltorf) and West University. Established central neighborhoods such as Zilker and Bouldin Creek brought in considerably less.
Windsor Park, where $1 million buys 4,534 square feet, yields the most gross rent at $87,918 per year. Downtown, where the same purchase amount buys only 1,536 square feet, yields the least: $45,529.
You can see the full chart with clickable details at the NeighborhoodX site here.