Establishing Texas Residency as an Out-of-State (OOS) UT-Austin Student
Overlooking Lake Austin from Mt. Bonnell
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I’ve worked in college admissions now for almost ten years starting at UT-Austin and founding Tex Admissions in early 2015. One area in which I lack knowledge and experience is establishing Texas Residency for out-of-state non-Texan students. I usually avoid any questions and refer people to residency@austin.utexas.edu and the Residency Core Questions (UTEID required), which isn’t always helpful.
I discuss OOS admissions for non-Texas US residents in this post. Since 90% of all incoming students must come from the state of Texas, the admissions rate for OOS applicants is less than 10%, on par with the country’s most selective universities. Note that each major, like Computer Science, Business, Engineering, and Honors Programs, doesn’t need this 90:10 ratio and is usually more like 85:15 or 80:20 Texas/OOS students.
One helpful resource is instateme.com who provides assistance in establishing a Texas LLC to qualify for residency in Texas and elsewhere. Another helpful resource is the Hilltop Monitor, which outlines residency requirements for all fifty states.
Residency through Real Estate
I connected with Chesney Coker is an owner / broker of Tower Realty Austin. Chesney has been working with out-of-state UT families for over 18 years, helping them buy property to establish Texas state residency, and qualify for in-state-tuition rates. You can contact him here.
This interview is a first-of-its-kind post for Tex Admissions. Every post and video here is written and edited by me, Kevin Martin, but Chesney has a wealth of knowledge that I cannot supply. Although I haven’t leased or bought property from Chesney or any of my OOS clients, and I cannot personally vouch for or endorse his services, he is highly recommended.
I hope this question and answer sheds some light on establishing residency through Texas property ownership.
Chesney, tell us a little about yourself.
I grew up in Austin, studied Engineering at UT, and was in the Phi Gamma Delta fraternity. My father is a UT Pharmacy alumnus. I have seen Austin grow from a sleepy college town to one of the fastest-growing states in the country.
Chesney, how did you get into this niche market of UT Austin property sales?
In 2004, I was working as an agent, leasing and selling UT properties. One day, a parent came into my office and told me he had to buy a property for his out-of-state daughter that day. Through this transaction, I learned about the Texas state law that allows out-of-state families to gain residency through a property purchase.
Why did he need to purchase a property that day? What was the sense of urgency?
I learned the three key factors for gaining residency.
1. The property deed must be in the student’s name.
2. The child must be independent from the parents for tax purposes.
3. The child must live in Texas for 12 months. In answer to your question, the date to close on the property has to be 12 months before the start of school, for the student to qualify for in-state tuition for their sophomore year.
On the homepage of our site, we have a countdown clock for this coming group of out-of-state students. (In order to obtain in-state tuition for their sophomore year, they must close on their property purchase by September 6, 2023)
What are some of the questions you get from prospective buyers?
The first question I get asked most often: Is this legitimate? Why would Texas offer a program like this?
I respond: Establishing Texas residency is a legitimate and legal way to qualify for in-state tuition.
Texas Education Code (TEC) Section 54.052 authorizes persons classified as Texas residents to pay in-state tuition, a rate of tuition that is generally three times lower than for those classified as nonresidents.
The State of Texas does not have an income tax; instead, tax revenue is generated by property taxes. By incentivizing out-of-state families to invest in Texas, the tax base grows and the property values rise. It's a win-win for everyone involved.
What is the cost savings for an out-of-state student’s family?
The undergraduate 2023-2024 estimated tuition and fees for UT Austin is $11,745.08 for Texas residents and $ 41,483.38 for out-of-state students. When your child qualifies for in-state tuition your 3-year savings in tuition would be $89,214.92 This amount is a game-changer for many families.
Can prospective families talk to someone who has done this?
Definitely. I have a network of over 1,000 families that have qualified for in-state tuition through a real estate purchase in the UT Austin area. Introductions to families who have gone through the process and who can explain how it worked for them, is a routine part of our sales process, and we are happy to coordinate a conversation.
Do other realtors sell UT properties?
There are a few other realtors out there who offer similar properties. What we have is the long-term experience and proven results to show for our clients. We also know just about every property in the area and are better than anyone else at guiding you to the best property and price for your situation.
What else should non-Texas families need to know?
There are other steps involved in obtaining residency that we will walk you through.
We are with you through the entire journey, from choosing the property, negotiations, the closing, (the property management and maintenance if you choose to rent your unit if your child stays in the dorms), all the way to qualifying for in-state tuition rates. Tower Realty is the Texas residency expert for UT Austin area students.
Can this law change and a family lose their investment?
According to the Texas Higher Education Coordinating Board, the number of students who met statutory requirements for establishing Texas resident status for in-state tuition under TEC 54.052(a)(3) totaled 25,930 in FY 2017, or 1.5 percent of the total enrollment at Texas public institutions of higher education.
Given the relatively small percentage of students who are obtaining Texas residency by these means, we do not anticipate a threat to the statute.
This issue is a state issue, not a university issue. As long as everyone is benefitting, it will remain. Texas legislature only meets every other year. Changes to the existing law would have to be introduced as new legislation, voted on, and then implemented, which is not a fast process. If you are reading this, you would be grandfathered into the current requirements.
How is the Austin housing market?
Austin is ranked as the number one city to live and retire, according to U.S. News & World Report, meaning that the real estate demand is steady, particularly in UT Austin neighborhoods. Tower Realty has brokered transactions throughout the year, most notably in the spring and summer months bookending the academic year cycle.
Will families get a return on my investment? Is this guaranteed?
While real estate market has inherent risks, and no investment is guaranteed, there is a sufficient and steady demand for properties in the UT Austin area, and Tower Realty has helped many families sell their condo once their UT Austin student has graduated.
What if a student doesn’t like UT and wants to transfer?
Most UT Austin students are drawn to the UT Austin for its sense of community, natural beauty, and diverse population. Add to that the fact that U.S. News & World Report, 2019 ranked Austin #1 for Best Places to Live, and UT Austin as #12 Most Innovative School, and you have a winning combination for college life. In the few cases where a student has not found UT Austin a good fit, Tower Realty is able to either rent or sell the property given the steady demand for off-campus housing in the UT Austin area.
In closing, we are happy to provide you with the opportunity to take advantage of this well-kept Texas secret. We suggest a phone call directly to get to know us and talk through the specific needs of your family.
YouTube video explaining the residency process:
Chesney Coker – Tower Realty • 611 W 22nd ST Suite B• Austin, TX 78705 512-478-9400office 512-289-4261 mobile
https://towerrealtyaustin.com | chesney@towerrealtyaustin.com
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Disclaimer: Kevin Martin and the Tex Admissions LLC are in no way associated with Tower Realty Austin and Chesney Coker. Neither party is compensated for referrals or services. Tex Admissions provides this content as informational only.