Area in Houston has too many rentals ! Good or bad ?

Question

Hello All, So I am back in the market due to my last deal not going threw due to much needed repairs and the price of home being too High.

Anyways,  So I been looking in a certain area in Houston and notice a large amount of homes being rented out. Is this a good thing or bad thing ? Should I go to a different area ?

Kevin Wood · Answer

If home values are lower due to more renters then it's probably a better place to own rental properties assuming you are going to buy and hold. As Sharon said though it could be tougher when it's the time to sell. Though a lot can change in 10 years+.

Victor Rios · Answer

Sharon, Thanks for the advice. When I said massive I mean like large quantity of homes being rented out. Basically a lot of the homes I am finding are in the same close neighborhoods and seems like every street there's 2 or 3 homes being rented out.

Sharon Tzib · Answer

What do you mean by massive? On the "pro" side, you should have an easier time renting there if tenants like the area. On the "con" side, however, for resale value, it may be lower, and your pool of buyers will be more limited, as owner-occupants may not want to rent in a high rental area.

Also for resale value, owner occupants take better care of their properties, so if tenant screening is weak or declining, that could affect the value of your home. I personally like about a 25/75% rental to OO ratio, but everyone is different.