2831 Pearl Street
Student Housing | 3 Units
Marketing description
Rare West Campus Value-Add Opportunity
2831 Pearl Street is one of the last opportunities of its kind in West Campus: a freestanding 2-bedroom house with a separate income-producing duplex on a 6,447 SF lot, all within walking and biking distance of the University of Texas.
Most detached homes in this corridor have already been demolished and replaced by high-rise student housing. This property sits immediately outside the University Neighborhood Overlay (UNO), placing it in the path of future redevelopment. Should the area be incorporated into UNO zoning in coming years, the land could see meaningful additional value appreciation.
The asset offers a compelling combination of current income, future upside, and long-term land value growth. Investors acquire a fully leased property with stable cash flow through August 2027 while maintaining significant repositioning potential at lease expiration.
Today's market presents an attractive entry point. Property values remain below recent peaks, while construction labor and material costs continue to climb. As replacement costs increase, well-located land near UT becomes increasingly difficult to replicate. This creates both a cash-flowing investment and a direct hedge against inflation.
The value-add opportunity begins in August 2027. The front house sits on a pier-and-beam foundation, allowing for relatively straightforward expansion. The rear duplex can be reconfigured into a larger three-bedroom layout with two to three bathrooms. Following renovation and repositioning, projected rents could increase from approximately $5,925/month today to $8,000-$10,000+ per month, representing a potential 35-70% increase in revenue and driving substantial NOI growth.
The demand story is simple: over 53,000 UT students, limited housing supply, and an ever-shrinking inventory of detached homes near campus. Three-bedroom houses in West Campus are increasingly scarce and consistently lease quickly when brought to market.
This is an opportunity to acquire a rare land-rich asset in one of Austin's most supply-constrained submarkets, collect income today, and unlock substantial upside tomorrow.
Investment highlights
- Rare, irreplaceable asset class — free-standing houses near UT Austin are functionally extinct
- Fully leased through Aug 2027 — zero work required, income from Day 1
- 35–70% rent upside at lease rollover — conservative re-leasing yields ~$8,000/mo, fully updated yields $9,750–$10,000/mo
- Buy-at-market-low + inflation hedge — real estate prices depressed, replacement cost rising
- Flexibility: cashflow, live-in, or both — lease all units or occupy front house and rent back duplex
- Current rents $5,925/mo below market — market rents target $8,000–$10,000/mo post-2027
- 4.87% going-in cap rate, 6.34% at market rents, 8%+ at full value-add
- Year 1 effectively break-even on total-return basis including principal reduction and tax benefits
- 53,000+ enrolled students at UT Austin — persistent, structural demand for off-campus housing
- 3BR houses near UT are genuinely scarce and pre-lease fast at strong rents
- Long-term hold projects ~$2M+ asset value at Year 15 on ~$246K down payment
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