Investing in Houston: Don’t Go It A-Lone in the Lone Star State

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When it comes to investors in Houston, agent Jodi Gauthier thinks the catchphrase “everything’s bigger in Texas” can also be applied to their real estate portfolios: bigger appreciation gains, bigger returns, and bigger rental income.

But the climate is hot in Houston in more ways than one. An influx of buyers in the area means that working with a knowledgable, top-performing local agent is more important than ever. With over two decades of experience and investor-focused expertise, Gauthier has the know-how to close deals as competition rises.

Here she shares some of the ins and outs of investing in Houston in her own words.

Real estate background

I’ve been an active agent for almost 22 years. I started my real estate career in San Diego, California, in 2000 but quickly made my way back to Texas. I’ve been in my current market since 2005.

What makes the Houston real estate market unique?

I think Houston’s real estate market is unique in its resilience. As a community, we not only withstood the global pandemic, we thrived in it. Home sales were at an all-time high, with over 100,000 homes sold in 2020. We have overcome numerous adverse weather conditions over the past year and still have record numbers of newcomers relocating to our great state in droves.

What kind of numbers can investors expect in Houston?

The Houston rental market is holding strong. Average rents have increased over the past year to around $1.25 per square foot. Supply is growing, with over 4,000 permits issued last month. Low occupancy rates and high demand make Houston a prime area to invest.

How competitive is your market right now?

The Houston housing market is extremely competitive at the moment. In fact, I have never experienced anything quite like this.

Properties are receiving multiple offers within hours of being listed. In many instances, buyers will make an offer without personally viewing the property. They’re also waiving appraisals and option/inspection periods.

What kind of rental demand are you experiencing in your market currently?

Rental demand is high in our market; inventory is low. The average rent for single-family homes jumped 11% to $1,960, while the average rent for townhomes and condominiums rose 8% to $1,688.

Which Houston neighborhoods are you most excited about?

Houston has so many neat, eclectic parts of the city that are up and coming. EaDo (East Downtown), Garden Oaks, and Rice/Museum District all experienced double-digit appreciation rates over the past year. I am also really excited about the new boardwalk project in West Houston/Katy that recently broke ground.

What type of investment properties do you think investors should consider?

With many people working from home these days, I think that short-term rentals, rural properties, and coworking/mixed-use office spaces are all good niches to keep your eye on in the upcoming years.

Which strategies are having the most success in your market?

The BRRRR method seems to be a solid acquisition strategy in our local housing market. With appreciation rates climbing, it doesn’t take much to capitalize on a little instant equity. If you’re willing to put in the sweat equity, you can expect to see very favorable results given our current market conditions.

What do most homeowners in Houston do for work?

The predominant professions in Houston are oil and gas along with medical and healthcare. Memorial Hermann Health Systems employs over 26,000 people in our local market. Shell, Schlumberger, ExxonMobil, and Halliburton all have multiple locations throughout our region.

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Are there any industries moving into or out of the area?

There has been quite a bit of news lately about major companies moving to Texas. Low housing costs, lower tax rates, and fewer regulations are all driving factors in the wave of companies now calling Texas home.

HP recently decided to relocate their home base from San Jose, California, to Houston. The Woodlands campus is set to open in early 2022.

Large wholesale/manufacturing corporations (Rooms to Go, Goya) and distribution centers (Amazon, FedEx) are moving in west of town, due to the ease of transport down our ever-expanding Interstate 10.

What do you personally love about Houston?

Houston’s vibrant, bustling culture is due in large part to its diversity. In Houston alone, 145 languages are spoken, and the state as a whole is the second most diverse state in the nation.

I love the richness and inclusion this diversity brings to our wonderful state. I think our culture really appeals to all those choosing to move here, and it’s a huge factor in our strong real estate market.

What kind of post-closing professional network do you offer for your clients?

We are a one-stop shop when it comes to all of your real estate investing needs. My team offers staging, property management, and in-house design and remodeling services (voted #1 Remodeling Company by The Katy Times two years in a row).

As active investors ourselves, we have made long-lasting connections with some of the industry’s top leaders in our local market. From investor-friendly title reps to lenders offering a multitude of loan products, we can help investors make the connections that will grow their portfolio.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.