Selecting the right investment location is a complex task, requiring careful consideration of several factors. At Viking Capital, we meticulously underwrite our multifamily investment opportunities. One key aspect of the acquisition process is location evaluation. Our team diligently analyzes various aspects of the location including; current and future projections of economic growth such as employment rates, population growth, job market dynamics, rental demand, and local attractions.
Our latest investment opportunity, Villas at Sundance, is situated in the thriving secondary market of New Braunfels, Texas. This article discusses the top 10 reasons to invest in New Braunfels, highlighting the unparalleled potential and opportunities this vibrant locale presents.
#1 Location
New Braunfels, strategically positioned within the Texas Innovation Corridor along Interstate 35, is experiencing rapid expansion. Situated between the vibrant metropolises of Austin and San Antonio, this burgeoning city is emerging as a key player in the region’s growth story. With a combined population of 5 million in the surrounding areas, New Braunfels is witnessing dynamic development from every direction, solidifying its status as a thriving hub within the expanding Metroplex. With new developments like walkable mixed-use neighborhoods popping up, the community is prioritizing smart growth that balances economic development with environmental conservation.
#2 Highly Rated Attractions & Tourism
Located amidst the picturesque landscapes of the Comal and Guadalupe Rivers, New Braunfels is a haven for residents and a thriving tourist destination as well. With its stunning natural beauty and rich cultural heritage, the city draws visitors from far and wide, contributing significantly to its economic vitality. Annually, tourism in New Braunfels generates an impressive $700 million in economic impact!
#3 Thriving Employment Opportunities
New Braunfels is a beacon of opportunity, boasting a robust employment market that shows no signs of slowing down. Projections indicate a staggering 46.5% increase in job growth by 2027, underscoring the city’s status as a thriving economic hub. Additionally, Austin and San Antonio offer a wealth of job opportunities, with Austin emerging as a powerhouse for entrepreneurship and technological innovation starting in 2020.
With Austin gaining recognition as the premier destination for business startups and solidifying its position as a leading tech hub, the proximity of New Braunfels—just 45 miles away—offers an incredible advantage. Many residents are seizing the opportunity to capitalize on Austin’s booming job market while enjoying the peaceful lifestyle offered by New Braunfels. This symbiotic relationship between the two cities highlights New Braunfels’ strategic location and appeal as a desirable place to live and work.
#4 Population Growth
New Braunfels continues to soar to new heights, with a remarkable record-breaking growth rate of 32.25% in 2023 alone. New Braunfels has solidified its position as the nation’s third fastest-growing city since 2000.
The city’s population has experienced a growth surge, by an impressive 58 percent. This influx of residents speaks volumes about New Braunfels’ undeniable allure, drawing individuals and families from far and wide seeking a vibrant community, exceptional quality of life, and boundless growth opportunities.
#5 Low Cost Basis
New Braunfels offers an enticing opportunity for investors seeking affordability and the potential for rapid appreciation in the Multifamily real estate market. As the city experiences rapid growth, the influx of new development has driven up rental prices, signaling a growing demand for housing in the area. By investing now, investors can capitalize on current market conditions before facing increased competition, positioning themselves for significant asset appreciation in the future.
The city’s affordability relative to Austin and San Antonio makes it an attractive option for individuals looking to invest in existing properties. With the potential for quick asset appreciation on the horizon, getting exposure to the New Braunfels market presents a promising prospect for investors seeking to maximize their returns in a thriving and dynamic environment.
#6 Tenant Affordability: A Catalyst for Demand from Surrounding Markets
New Braunfels has a median rent that’s 11% below the national average, with residents enjoying substantial savings of approximately $232 per month compared to the typical rental costs across the country. This affordability factor, coupled with an ‘income to live comfortably’ threshold hovering around $60,000, positions New Braunfels as one of the few remaining middle-class-friendly areas.
To put this into perspective, consider the income requirements in neighboring cities like Austin. In Austin, you’d need to earn over $78,000 annually to maintain a comfortable standard of living. By comparison, New Braunfels offers a more attainable path to financial stability driving migration to this growing city.
#7 Strong Rental Market
New Braunfels presents a dynamic rental market, with a significant portion of its population—38.3%—opting for renting as their housing solution. This percentage of renters highlights the demand for rental properties in the area, fueled by the affordability gap between renting and buying. As housing prices continue to rise, many residents turn to renting as a more affordable option, driving up demand for rental units.
Additionally, the New Braunfels submarket stands out for its exceptional performance, boasting the highest occupancy rate in the entire Austin – San Antonio Metropolitan Statistical Area (MSA). This impressive statistic speaks to the desirability and stability of the rental market, making it an attractive destination for both renters and investors alike.
With its thriving rental market and high occupancy rates, New Braunfels offers a lucrative opportunity for Multifamily real estate investors seeking to capitalize on the demand for rental properties in the area. As the city continues to experience growth and development, the rental market is poised to remain robust, providing a stable and profitable investment landscape for years to come.
#8 Economic Growth
New Braunfels has experienced an unprecedented surge in population over the past five years. This exponential growth can be attributed to a combination of factors, including the establishment of new major employers, the emergence of vibrant entertainment centers, and the city’s favorable demographics. On average, an impressive 15 new residents are choosing to call New Braunfels home each day, contributing to its vibrant and diverse community.
In recognition of its exceptional quality of life and thriving economy, New Braunfels was honored by Money Magazine as one of the ‘Best Places to Live in 2023.’ This prestigious accolade serves as a testament to the city’s unparalleled appeal.
#9 No State Income Tax
An added advantage of investing in Texas is the absence of state income tax, offering investors significant savings and boosting overall multifamily underwriting for deals. Unlike many other states, Texas does not impose additional taxation on investment income, thanks to its favorable tax policies. This tax-friendly environment enhances the financial viability of multifamily investments, allowing investors to retain a larger portion of their returns and optimize their investment strategies.
The absence of state income tax in Texas benefits individual investors and strengthens the multifamily property’s financial performance. With lower tax burdens, multifamily sponsors can allocate more resources toward property maintenance, improvements, and tenant amenities, ultimately enhancing the overall value proposition of their investments.
This favorable tax landscape further solidifies Texas as a prime destination for multifamily real estate investment, attracting investors seeking to maximize their returns and capitalize on the state’s thriving multifamily market.
#10 Safety
Beyond its warm community atmosphere, New Braunfels also stands out for its commitment to safety and security. With crime rates 31% lower per 100,000 people compared to other areas in Texas and the United States, it’s clear that New Braunfels prioritizes the well-being of its residents. This makes it not only a welcoming place to live but also one of the safest bets for families and individuals seeking peace of mind in their daily lives.
The Takeaway:
Investors should prioritize several key factors to ensure a successful venture when evaluating potential investment locations. These include assessing robust rental demand, driven by factors such as; population growth, a resilient employment market, and positive rent growth trends.
By focusing on these fundamental aspects, investors can streamline the process of identifying promising investment opportunities.
Check out our latest investment opportunity, Villas at Sundance, in the burgeoning city of New Braunfels! Click here for more details: Open Deal
