Market Conditions in Houston>Question Details

Jeff, Home Buyer in Austin, TX

Investing in Houston Single Family

Asked by Jeff, Austin, TX Tue Jun 10, 2008

I am looking to find an investment property (single fam/Duplex) to purchase in the next 3 months and rent over the course of the next 4-5 years. I understand that Houston has faired on average better than the rest of the county as far as declines in housing prices, but, are there any specific neighborhoods you would suggest investigating for value plays?

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Jeff: Rental property returns are higher in the 100-150K price range for rentals. However that price bracket has been hit the hardest by foreclosures too. I would not go below the 100K range because (I think) the rent pricing will be attracting tenants of low financial strength.

Typically you can expect to net around 8% or better (after taxes, hoa and insurance) on a rental before leveraging your money. This number with a 20% down payment can easily reach the mid teens. (And the tax savings from the depreciation will be an added bonus).

We have some rented properties available (turnkey, no repairs, tenants already in place) for your comparing and even potentially your consideration.

Good luck with your investment goals.
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0 votes Thank Flag Link Sat Nov 8, 2008
We work with investors across the country we try to find properties around the better school districts.
0 votes Thank Flag Link Tue Jun 10, 2008

Great to hear you are considering Houston as a place to invest in. I am working with several clients from out of state that believe the same as you and are wanting to put their money in property rather than the stock market. Houston is doing well still, and depending on your price range and investment goals would depend on the part of town you should look in. I invest personally in and out of Houston and have found some great niches in smaller towns outside of Houston proper. However, inside the loop always rents well and you can demand higher prices. Though, I feel the competition is a little more steep inside the loop than outside.
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0 votes Thank Flag Link Tue Jun 10, 2008
Your best alternative is to buy something in an area where the dirt is increasing in value the most. The Med Center, downtown, inside or near Loop 610 are all great areas. It is also easy to find good tenants for those areas. With gasoline so high, people are valuing homes near their work the most. So try to buy your investment in an area that employs a lot of people. These are the areas I work, and I work with investors, so I would be happy to help you find this property!
0 votes Thank Flag Link Tue Jun 10, 2008
Your answer would depend on what price range you are looking at and what part of town you currently live in. If you are looking at purchasing your first rental home, I would recommend that you try to buy one in the general area you now live so that you can drive-by the home occasionally to keep tabs on it. A good tenant is gold, but a bad tenant can cause severe damage to a property in a short amount of time. If you let me know what part of town you are in now, I can make some more specific recommendations.
0 votes Thank Flag Link Tue Jun 10, 2008
Lot's of good areas in Houston to invest - I will be happy to provide you with a Market Analysis of any neighborhood you might be interested in.Juan Carlos
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0 votes Thank Flag Link Tue Jun 10, 2008
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