Rents close to UT campus for a 2 bedroom 1 bath house range from $1200 - $1500 per month. With interest rates as low as they are right now (not to mention first time buyer tax credit), you can buy a little bungalow in the low $200K's and actually spend less every month on your housing than you would if you were renting... all the while gaining equity. Not a horrible plan.
Key zip codes to search for ideal properties are 78751 (north Hyde Park and North Loop), 78722 (Pannell Place), and 78702 (between MLK and 12th, as far east as airport). Here are some of the listings I like the best:
2942 Eckert in Pannell Place subdivision, East Austin 78722. List price is $209,900. 2 bedrooms, 1 bath
1410 Sanchez - East Austin 78702, walk to MLK commuter rail station. List price $229,000 2 bedrooms 1 bath
943 E. 52nd St. - north of Hyde Park area. List price $225,000 2 bedrooms, 1 bath
You can email me for the complete MLS listings.