Interested in buying a duplex or 4‑plex in Williamson County but not sure where to start? You’re not alone. Small multifamily blends residential familiarity with investment math, and local details can make or break returns. In this guide, you’ll learn how to evaluate rents, expenses, taxes, zoning, financing, and value‑add plays specific to Williamson County so you can underwrite with confidence. Let’s dive in.
Why small multifamily here
Williamson County sits in the Austin–Round Rock metro, where population and job growth have historically supported strong rental demand. Cities like Round Rock, Georgetown, Cedar Park, Leander, Pflugerville, Hutto, and Taylor benefit from proximity to major employers and medical centers. Commute access along I‑35, US‑183, SH 130, and the 45/183 toll roads also influences rents and occupancy.
For investors, duplexes and 4‑plexes offer a balanced entry point. You get multiple income streams on one lot, residential-style financing options for up to four units, and value‑add upside through targeted renovations and better operations.
Submarkets to watch
Demand varies by city and by proximity to employment nodes. Round Rock’s technology and healthcare presence, Georgetown’s steady growth, and the Cedar Park–Leander corridor’s connection to north Austin campuses all factor into rent levels and lease‑up velocity. New master‑planned communities and Municipal Utility Districts (MUDs) can improve infrastructure but may affect property taxes. Keep your rent and expense assumptions city‑specific.
Zoning, taxes, and local rules
Texas has no state rent control, and recent state law limits local rent control. Landlord‑tenant rules are set at the state level. Some cities require rental registration or inspections, so check local requirements for Round Rock, Georgetown, Cedar Park, Leander, Pflugerville, Hutto, or Taylor before closing.
Property taxes are a major cash flow driver here. Your tax bill typically combines county, city, school district, and possibly special districts like MUDs. Always confirm the full tax rate and any assessments through the Williamson County Appraisal District and the relevant taxing entities. Verify zoning for duplexes or fourplexes city by city, since allowed uses and permitting differ.
Underwriting essentials
Build Williamson County rent comps
Strong underwriting starts with local comps. Compare units by bedroom count, square footage, age and condition, parking, laundry, and who pays utilities. Pull data from the Austin area MLS (ACTRIS), major rental listing platforms, and local property management offerings. Adjust for finishes, utility inclusions, pet policies, and commute access to nearby employers.
- Match like to like: similar unit size, vintage, and amenities.
- Focus on the same city or nearby neighborhood to avoid averaging across different demand pockets.
- Track lease‑up speed and concessions, not just asking rent.
Model income correctly
- Gross Scheduled Rent (GSR): total market rent if fully occupied.
- Effective Gross Income (EGI): GSR minus vacancy and credit loss, plus other income.
- Vacancy: use current local trends and stress‑test with 5–10% for conservatism.
- Other income: pet rent, laundry, reserved parking, storage, application and late fees.
Estimate expenses and reserves
Small multifamily often runs at a 35–50% operating expense ratio relative to EGI. Where a property sits in that range depends on age, systems, who pays utilities, and management quality.
- Property management: 4–8% of collected rents is common for professionally managed small multifamily, plus leasing fees.
- Repairs and maintenance: 6–12% of EGI or about $300–$900 per unit per year, depending on age and condition.
- Utilities: confirm who pays and how the property is metered; water and sewer can be significant.
- Insurance: obtain local quotes and note wind or hail exposure.
- Property taxes: verify current rates, special districts, and any pending reassessments.
- Turnover costs: often $1,000–$5,000 per turn depending on scope.
- Capital reserves: commonly $250–$1,000 per unit per year; many investors model $300–$600.
Key metrics and quick formulas
- NOI = EGI − Operating Expenses
- Cap rate = NOI ÷ Purchase Price
- Cash‑on‑cash = (NOI − Debt Service) ÷ Equity Invested
- GRM = Purchase Price ÷ Gross Scheduled Rent
- Break‑even occupancy = (Operating Expenses + Debt Service) ÷ GSR
Example, for illustration only:
- Assume four 2‑bed units at a market rent you verified locally, a conservative vacancy factor, realistic other income, and expense line items above. Compute EGI, subtract expenses to get NOI, then layer in debt service to see cash flow and cash‑on‑cash. Sensitivity‑test higher taxes, a rate increase, or a 10% rent drop to see risk.
Financing options for 2–4 units
Two to four units can fit either residential or investor loan products.
- Owner‑occupied: FHA and Conventional options are available for 2–4 units if you live in one unit. FHA can allow as little as 3.5% down, subject to program rules and underwriting.
- Investment loans: Conventional investment loans typically require 20–25% down for 2–4 units. DSCR loans and bridge financing are alternatives, especially for value‑add.
- Underwriting: Expect lenders to request leases, a rent roll, historical income and expenses, and a property inspection. Many programs target a Debt Service Coverage Ratio of 1.20–1.35.
Always obtain current quotes from local lenders and confirm limits, mortgage insurance, and closing timelines.
Due diligence checklists
Financial and leasing
- Rent roll with current rents, lease dates, deposits, and concessions.
- Copies of all leases and tenant estoppel letters.
- Historical P&Ls and 12‑month utility bills.
- Vacancy and turnover history.
- Recent capital projects and any deferred maintenance.
- Vendor contracts that will transfer at closing.
Physical property review
- Structure and systems: roof, foundation, exterior, windows, HVAC, water heaters, panels, plumbing.
- Site: drainage, gutters, grading, parking count versus leases.
- Safety and code: smoke/CO detectors, egress, handrails, fire separation as applicable.
- Environmental: lead paint disclosure for pre‑1978, consider pest and termite inspection.
- Flood: check FEMA maps and insurance requirements.
- Metering: master versus separate meters and submetering opportunities.
Legal and regulatory
- Zoning: confirm duplex or fourplex is a permitted use on that lot.
- Certificates: occupancy or use history.
- Compliance: any open code violations or pending enforcement.
- Registration: local rental licensing or inspection rules.
- Title: easements, covenants, liens, HOA/POA restrictions if any.
- Taxes: property tax history, special assessments, and any MUD obligations.
- Landlord‑tenant: confirm leases and deposits align with Texas law.
Tenant and operations
- Payment performance and any eviction history.
- Who pays which utilities and any RUBS or reimbursement agreements.
- Vendor agreements for landscaping, pest control, laundry, or alarms.
- Insurance claims history, if available.
Value‑add plays that work locally
- Unit upgrades: kitchens, baths, flooring, lighting, and appliance packages tend to drive the clearest rent bumps.
- Utility optimization: shift to tenant‑paid utilities where legal and practical or add submetering.
- Laundry: add in‑unit hookups or a common laundry for ancillary income.
- Curb appeal: exterior paint, lighting, landscaping, and signage support faster lease‑ups.
- Services and fees: pet rent, reserved parking, storage, or EV charging where demand supports it.
- Expense control: negotiate vendor pricing and implement preventative maintenance.
Set a realistic timeline for turnover work. Budget both maintenance and CapEx separately so the property is adequately capitalized.
How management changes outcomes
Professional property management can improve occupancy, speed up lease‑ups, lower delinquency, and bring vendor pricing efficiencies. Fees often range from 4–10% of collected rent, plus leasing and placement fees. On small portfolios, compare self‑management versus professional management in your pro forma. Model the management fee, then offset with lower vacancy and faster turns to see the net effect on NOI and cash flow.
Your next steps in Williamson County
- Define your target cities and building vintage based on commute access and tenant demand.
- Pull rent comps from ACTRIS, major rental platforms, and local property managers.
- Verify zoning and permitted use with the relevant city planning department.
- Confirm full tax burden via the Williamson County Appraisal District and taxing entities, including any MUD.
- Interview at least two local property managers and request sample P&Ls and vacancy metrics.
- Get quotes from lenders that finance 2–4 unit properties, including owner‑occupied and DSCR options.
- Build your pro forma with conservative vacancy, realistic expenses, and capital reserves. Stress‑test taxes and interest rates.
Ready to run the numbers on a specific duplex or 4‑plex and align them with your goals? For local comps, zoning checks, and an investor‑minded purchase plan, connect with Chet Smith for hands‑on guidance from search to close.
FAQs
What makes Williamson County appealing for small multifamily investors?
- The county’s position in the Austin–Round Rock metro, access to major employers, and strong commute corridors have historically supported solid rental demand across cities like Round Rock, Georgetown, Cedar Park, and Leander.
How do property taxes and MUDs impact duplex cash flow in Williamson County?
- Taxes often represent the largest single expense; confirm county, city, school district, and any MUD assessments because they can materially change your NOI and cash‑on‑cash returns.
Are duplexes or 4‑plexes allowed everywhere in Round Rock, Cedar Park, or Georgetown?
- Zoning is city‑specific; verify permitted uses on the parcel with each city’s planning and development department and confirm any special permits or nonconforming use issues.
What operating expense ratio is realistic for a 4‑plex here?
- Many small multifamily assets operate between 35–50% of EGI, with newer or professionally managed properties on the lower end and older properties on the higher end.
Can I use FHA to buy a 4‑plex in Williamson County if I live in one unit?
- Yes, FHA financing can allow as little as 3.5% down on 2–4 units for owner‑occupants, subject to program rules and underwriting; verify details and limits with a local lender.
What vacancy rate should I use to underwrite duplexes near Austin?
- Use current local data and stress‑test with a conservative 5–10% vacancy assumption to ensure your pro forma remains resilient through normal turnover cycles.
