Three years ago dropped everything and moved to Austin. I’ve now found myself in the position where I get to help lots of other people move to Austin. So I decided to write a series of blog posts about what it’s like moving to here. If you’re looking for help finding a new place to live, please reach out to me. I’d love to help you fall in love with the city like I have.
This a continuation of my Moving to Austin series of blog posts. In this post I’ll cover the differences between the two main sections of renting real estate: professionally managed apartments vs privately owned condos and houses. I’ll cover everything from ownership, management, availability, negotiations, deposits, and general lifestyle.
Ownership
Private Market: Houses & Condos
The main difference between apartments and condos/houses is ownership. In most cases, condos and houses are owned by ordinary people who are renting them out to cover mortgage costs and maybe even profit a little bit. (Side note: in Austin, it’s more likely that owners are not breaking even with their mortgages, and wind up paying more in mortgages than they receive in rents).
Apartments
Apartments buildings are owned by big fancy companies who spend of Dr. Evil amounts of money to make them. They use exciting terms like “cash flow projections” and “valuations”. They’re about as exciting as bingo at a corporate office party. On the bright side, they do tend to take a more professional approach to creating living spaces. Their primary goal is to get returns on their investment
Management
Private Market: Houses & Condos
In most cases, these are managed by the owners themselves. In some cases, they are managed by local management companies that handle leasing, maintenance, screening and repairs. I tend to learn towards places that are managed by owners since they tend to have more skin in the game than a management company with dozens or hundreds of places they take care of.
On one side, you may run the risk of having a shitty slumlord type person who sinisterly twirls their mustache as they think about ways to screw you over your deposit. On the other side, you may have that sweet old hippie grandma who bakes you cookies on the weekends.
Apartments
Apartments are almost universally managed by larger scale management companies that have dozens or hundreds of properties in their portfolios. In most cases, they will have an on-site leasing staff that takes care of maintenance requests, touring potential residents, organizing community events, marketing, and general resident well-being. As with most things, quality of management companies can vary wildly.
Like before, some management companies act like that aforementioned mustache-twirling-deposit-thieving slumlord, while others actually do a great job in making a cohesive and high quality standard of living. In my experience it’s the near-campus student apartments that tend of have crappier management companies (because they know most students don’t have high budgets or choices).
Side rant
Many near-campus apartments include provisions in their lease contracts that allow real estate agents to barge in with new prospective tenants with only few hours notice. I’ve seen it get so bad that tenants have to put post-it notes on their doors for instructions on how to not leave their homes unlocked. It’s a super shitty thing when they have to allow strangers into their place with such short notice. This is one of many reasons I rarely do campus-housing.
End Rant
Anyways, most apartment management teams do try fairly hard to keep the tenants happy with fun resident events, timely maintenance responses and general help. The better companies have some of the leasing staff live on-site so they can have a vested interest in keeping the community happy.
Variety
Private Market Houses & Condos
You’re going to have a lot of variety in the private market since you’ll also be dealing with houses. You can find everything from that old dilapidated 1950’s house to that super cool modern farmhouse-chic type place to that cool bungalow house that you dreamed about instagramming yourself reading books and doing yoga next to.
Many of them will even come with a yard for doggo! In my experience however, the market is more saturated with houses that have lower value propositions than apartments (which we’ll discuss below). In Austin, a large portion of the houses were built between the 60’s and 90’s and tend to have that out-dated feel with out-dated fixtures and appliances. The other generation of houses are modern homes built in the last 10 years. Sometimes you’ll find a good deal here and there, but usually it’s harder to find. However if you value privacy and space, you’ll probably want to aim for a house.
As for condo variety, the main difference is which buildings they’re in. With condos, you’ll have access to different buildings than you would with apartments. Other than that, there’s not much else that’s different.
Furnished Units
If you’re looking for a furnished apartment, you’ll probably want to find something on the private market. While furnished units can be tricky to come across they do exist sometimes within reasonable price points. With apartment complexes, furnished apartments are almost never a thing. When they are, they are considered “corporate housing” are get jacked up to 3x the rent. So a basic $1200 a month apartment can go for over $3000 a month. It’s bonkers. For my clients who want one of these furnished apartments, I usually refer them to a furniture rental company like Cort, or set them up with one of my interior designer friends.
Apartments
With apartments you won’t have the same variety you would with private market houses and condos. You’ll rarely houses or that cool yoga-on-the-porch bungalow type place. However within the apartment sector, you will find a wide variety of quality. I went a little crazy with this section, and decided to write an entire spin-off post about the various types of apartments you’ll find.
Read: The Four Types of Apartments You’ll Find in Austin.
Applications & Deposits
Private Market Houses & Condos
In the private market, you can expect to pay a minimum of a whole month rent for a deposit. Sometimes you’ll be required to put up a second month’s rent for deposit, and even sometimes an extra month in security deposit. All this can add up to a few thousand dollars in up-front moving expenditures. As for applications, you’ll generally submit a contract to lease through a real estate agent, or through a managers website. Applications processes can vary wildly depending on which home you choose. Application fees can go from free, to $150 per applicant.
Apartments
Moving into apartments almost always requires less up-front payments to move in. Instead of paying up to 3x a month’s rent to move in, you’ll usually pay somewhere in the vicinity of $300-$700 for deposits. Application fees are generally $50-$100 per applicant. In addition, you’ll also likely be required to pay “admin fees” which are basically just “f-you, pay me more money” fees which I find annoying. These can range from the $100-$400 depending on the building.
Negotiations
Private Market Houses & Condos
Since you’ll be dealing with landlords in this case, you’ll have more wiggle room to haggle over price and other contract details. Want a plastic flamingo in the front porch as part of the contract? Sure! Not saying it would work, but you can try. In the case of professionally managed homes, there is a barrier between you and the landlord, so you may not have as much room to deal directly with the owner.
Apartments
There isn’t much negotiations on price when it comes to apartments. You’re typically dealing with leasing agents who are beholden to whatever price is dictated to them from upper management or some fancy algorithm. However, just because base price isn’t usually negotiable, doesn’t mean you still can’t get some goodies.
In this market, your “negotiating” usually comes in the form of what specials or perks the building is offering at the time. Some of the specials that are commonly offered are free weeks/months. Free parking spots, waived application & admin fees, lowered deposits & gift cards (I’ve seen up to $2000 gift cards). With one building, I’ve even seen them give away free trips on a cruise. Seriously. Thanks competitive market forces!
Apartments will also do something called “Look and Lease” specials where they try to rope you into a lease by signing within 24-48 hours after touring the apartment. These specials can be worth a few hundred extra dollars if you take them, but I would only advise doing so if you’re confident about how you feel about the building.
While specials may feel like a “take it or leave it” scenario where you don’t have much wiggle room, you may be able to get the leasing staff to get some extra specials from upper management. Say a 1 month free special ends July 1st, and it’s July 5th, you may be able try this strategy: “Well, I really like this unit with that July 1st month free special, but it’s not active anymore so it’s not out of my price range, is there anything you could do?”
I’ve seen this work before. This strategy is usually the most effective when a building is new or has low occupancy and all the big-wig moustache twirling investor types are all like “where the f&*$ are my returns?!”
Availability
Private Market Houses & Condos
These can suffer from “here today gone tomorrow” syndrome. No well priced condo or house is likely to be on the market for a long time. This can lead to you running around from house to house submitting offers to places that “just got taken off the market” It’s super frustrating when you fall in love with a place that’s gone right away. However with enough persistence you can get lucky and lock down that “diamond-in-the-rough” type place.
Apartments
Apartments are much easier to deal with availability. Since buildings have hundreds of units on site, you’ll usually have a variety of options to choose from if you really like a building. It’s rare that I have to deal with a case that all floor plans in a certain building are gone. You also generally have a lot of flexibility with your move in time frames. Where-as houses typically want somebody in right now, apartments typically give a few weeks flexibility on your move in time frame, so you’ll usually be able to lock in a unit that you like.
Pet Policies
Both the private market and apartments are fairly pet friendly across the board. In some cases you might have a landlord that doesn’t want any pets allowed, but that’s a rare case. The main differences you’ll find come with the pet amenities. Since you’ll have access to houses in the private market, you may be able to find a place with a small yard for your dog. With apartments, many of them have big on-site fenced in dog parks. Apartments will often include a pet deposit of a few hundred dollars, and sometimes add $20-$30 in “pet rent” which is a silly concept in my opinion.
Conclusion
Ok Alex, that was a ton of info. What should I take away?
In general, I tend to be a bigger fan of the apartments since their value proposition tends to be much higher than houses and condos. Deposits are way lower. Availability is more predictable and flexible, and you have access to amenities you normally wouldn’t have in a house. The current level of competition amongst the apartment is so high, they are really going above and beyond with specials, offerings, style and amenities. The downside is you probably won’t have that super unique bungalow type space that you might find on the private market. Homes will also give your more potential flexibility as you will have a direct relationship with the homeowner.
