Rental property (first) in Houston, TX?

Question

Hi all,

I'm a newbie investor and interested in some upcoming areas in Houston. I'm most interested in Katy, then Richmond, Cypress, Pearland and Sugar Land. As we all might have seen the crazy spike in home prices recently. I'm wondering if it still makes sense to buy now and rent for future equity appreciation and little cash flow?

I also wanted to ask what are other alternative areas that are good for rental income? My budget is around 235k (max) and my target monthly rental income is $1600 to $1700. These numbers are tight to crunch all in right now as I understand.

Thank you all and I look forward to receive some inputs from members on BP.

Matthew Rolf · Answer

@Joe Nguyen in Katy if you're patient, South of I-10 Katy Creek Ranch and Parkway Oaks would be great for what you are targeting. Also neighborhoods like Cimarron, West Memorial, Memorial Parkway, Silverstones, Cornerstones would work. North of I-10 if you could find something in Williamsburg Settlement or Barkers Ridge (both long shots in this market) you would do well also.

Prices are high like you said, but interest rates are low. I think you can still find deals that work if you're patient. Katy rents will continue to rise as its a high demand place to be, especially because of Katy ISD.

Prices are high like you said, but interest rates are low.  I think you can still find deals that work if you're patient.  Katy rents will continue to rise as its a high demand place to be, especially because of Katy ISD.

Cameron Tope · Answer

Joe,

The suburbs you mentioned are great areas, but like you said, it's hard to cash flow.

I personally think rents will rise dramatically over the next few years to catch up with home prices and rising property taxes.

As far as a specific neighborhood, buy in the one where the numbers make sense. I think your price point is suitable, just know that cash flow will be tight initially.

Best of luck!

Matthew Rolf · Answer

@Joe Nguyen sorry man, it sucks and its frustrating.   Yeah I've had clients offering leasebacks for free, waiving appraisals, offering over, and way upping option money and at times, still missing out.  Crazy.

Joe Nguyen · Answer

@Matthew Rolf - I think I have to agree with that.. I also think stuff on the west side of Houston are a bit more pricier. You'd have usually add 20 30k to have a chance at winning the house. I myself had 3 unsuccessful offers and so that was my experience in the recent months.

Justin Allen · Answer

I have to agree with @Matthew Rolf on the prices. Good prices but neighborhoods are sucky. I've starting seeing some new investments in the Sunnyside area though with townhomes. Not one of the nicest neighborhoods but yeah.

Matthew Rolf · Answer

@Joe Nguyen currently...I think stuff in the city is priced better than stuff out in the suburbs.

Joe Nguyen · Answer

@Matthew Rolf Thank you for your input. What are your thoughts on other alternative areas if there are any?

Robert Haney · Answer

Where do live?

Rental property (first) in Houston, TX?

Most Popular Reply