OHA Market Update Series - Oct 22,2025
National: As affordability challenges reshape the market, more buyers are turning to fixer-uppers for opportunity — but deciding whether to flip or rent comes down to risk tolerance and long-term goals. While flipping offers faster gains, renting provides steadier returns and lasting wealth potential, especially in evolving markets like Austin.
Local: Prop Q is Austin’s proposed property tax increase—about 5¢ per $100 of assessed value—to raise roughly $100 million for essential city services like public safety, parks, housing, and health programs. Voters will decide whether the added revenue is worth the higher cost to maintain and strengthen the city’s core services.
Intrigued? Keep reading.
(4 minute read)
National Real Estate Update
Housing Trends, Interest Rates, and Market Forecasts
Flip or Rent Out: What’s the Better Play for Fixer-Uppers in 2025?
For years, buyers chased “move-in ready.” Homes with designer finishes and turnkey convenience were the dream — but with today’s home prices and mortgage rates, those listings often come at a steep premium.
That shift has brought new attention to an old classic: the fixer-upper.
According to Realtor.com’s latest Fixer-Upper Report, homes marketed as “fixer-uppers” now receive 52% more views than similar listings — and the search term has tripled in popularity since 2021. It’s not hard to see why: the typical fixer-upper lists for about $200,000 less than the national median single-family home.
That’s a big difference — and a big opportunity. But once you’ve found a property with potential, the next question is: what’s the smarter move — to flip it, or rent it out?
Flipping: Fast Potential, but Higher Risk
Flipping a home can absolutely be profitable, especially in markets where inventory is tight and updated homes sell quickly. The key is buying below market value, keeping renovation costs in check, and knowing what buyers are willing to pay for.
But right now, the margins are tighter than they’ve been in nearly two decades. Rising material costs, construction delays, and tariffs have made it harder to predict profits. And for many investors, short-term capital gains taxes (on properties held less than a year) eat into the final return.
Flipping can still be rewarding — but it’s no longer the easy money it once seemed. In today’s environment, it takes experience, precision, and a strong stomach for risk.
Renting: Slow and Steady Wins the Race
On the other hand, renting out a fixer-upper offers something flipping can’t: stability.
Even after 25 consecutive months of rent declines, national rents remain 17% higher than before the pandemic. And while gross rental yields (around 7.45%) have dipped slightly, the demand for rentals in job-rich cities remains strong — especially in places like Austin.
For investors who prefer predictable income and long-term appreciation, a well-renovated rental can build wealth quietly over time. Plus, by avoiding short-term capital gains, you keep more of what you earn.
Rules of Thumb to Keep You Grounded
A few tried-and-true formulas help investors stay realistic about returns:
The 70% Rule (for Flipping): Don’t pay more than 70% of the property’s after-repair value (ARV) minus renovation costs.
The 50% Rule (for Renting): Expect about half your rental income to go toward maintenance, taxes, and expenses.
And most importantly: buy with flexibility. The best deals are the ones that work as a flip, a rental, or even a future primary home — giving you options if the market shifts.
What This Means for Austin
Austin is in an interesting place right now. Our market has cooled from its 2021 frenzy, but opportunity still exists for buyers willing to look past outdated tile and peeling paint. In many East Side and North Austin neighborhoods, a well-chosen fixer-upper can still yield healthy returns — whether you plan to sell after renovations or hold as a rental.
It’s about strategy, not speculation.
If you’ve been curious about investing in a fixer-upper — or want to explore how to make a purchase like this work for your long-term goals — let’s talk.
🏡 Whether you’re dreaming of your first project or your next property, I can help you run the numbers, understand the risks, and create a plan that feels right for you.
📲 Reach out today to start the conversation — and let’s find your Austin opportunity together.
Austin Area Real Estate & Community Update:
Market Trends, Local News, and Neighborhood Insights
What You Should Know About Prop Q: Austin’s Upcoming Tax-Rate Vote
Austin’s on the ballot again this fall — and one of the biggest local issues is Proposition Q, a tax-rate election that could shape how our city funds essential services in the coming years.
If you’ve heard bits and pieces but aren’t totally sure what it means, here’s the breakdown — and why this one deserves your attention before you head to the polls.
What Is Prop Q?
Proposition Q is a citywide vote asking Austinites to approve a property-tax rate increase of about 5 cents per $100 of assessed value.
That change would generate roughly $100 million in new revenue for the City of Austin — money that the city says is needed to maintain and strengthen key public services.
The proposed rate, $0.574017 per $100, exceeds what Texas law allows the city to adopt without voter approval. That’s why Prop Q is on the ballot: under state law, when a city wants to raise its property-tax revenue more than 3.5% from the previous year, it must get voter consent through what’s called a “voter-approval tax-rate election.”
What the City Says the Funds Will Support
If approved, the additional funds would go to Austin’s General Fund, which covers many of the services residents rely on daily. According to the city, the increase would help:
Maintain and expand public-safety staffing for police, fire, and EMS
Preserve and improve parks and recreation spaces
Support homelessness and housing-affordability initiatives
Enhance public-health programs
Stabilize the city’s finances amid inflation and population growth
City leaders have said that without the increase, Austin could face a significant budget shortfall — meaning potential cuts to some of these same services.
The Debate
Supporters of Prop Q believe the increase is a proactive investment in maintaining the quality of life that makes Austin special. They point out that the city has grown rapidly, costs have climbed, and service demand has outpaced current funding levels.
Opponents argue that the measure places an additional burden on homeowners and renters at a time when affordability is already a major issue. They also question whether the city has provided enough transparency around exactly how the new revenue would be spent.
In short, Prop Q asks voters to weigh immediate affordability against long-term investment in city services.
Why It Matters
This isn’t just about a tax rate — it’s about what kind of city Austin wants to be as it grows.
Do we prioritize stable funding for safety, parks, and housing programs? Or do we press pause on tax increases to keep housing costs lower for now?
There’s no easy answer, but informed voting makes all the difference.
Make Your Voice Heard
Whether you support or oppose Prop Q, what matters most is that you participate. Local elections like this one often have low turnout, but they directly affect how we live, work, and move through the city every day.
🗳️ Make sure you’re registered to vote, and know where your polling place is before Election Day.
Every vote shapes Austin’s path forward — let’s make sure yours is part of the conversation.
Jennifer Carey
Realtor and Agent Success Manager at Open House Austin, real estate investor, and renovation enthusiast with Wimberley Airbnbs. She loves mid-century modern design, hiking Austin with her dogs, yoga and pilates, and has been enjoying gardening at her new home in East Austin🎶✨
