First property in Gentrification Area Houston, TX

4 Replies

Hi BP fam!

Looking at a few homes suggested by my agent but wanted a second opinion. What is everyone's thoughts on areas of gentrification as a starter home? I'm currently residing in Houston, TX and there are plans to gentrify several areas around Houston. My agent has mentioned the East River Project on the outskirts of Downtown and that the area will be seeing some gentrification over the next decade. When I do a quick search I see a lot of new construction town homes being built in the surrounding area. After doing a bit of research I also see that the city of Houston is planning to expand and bring the surrounding areas up. My question for you would be would the area be worth considering if I plan to buy and hold over a ten year period. Rental numbers don't match the 1% rule here with townhomes ranging from 250-400+k and current comp rentals are more around 1900-2300. I will plan on living in the home for about two years then rent it out and look for my next property. From what I understand the 1% isn't a hard set rule more of a general quick analysis to see if the property is worth investing into. Should I avoid the area as its currently more industrial, with pockets of C and lower neighborhoods? Would love to hear your thoughts on this subject.

John, I too am very bullish on Eado. The East River project is done by the same developer that brought us City Centre. You can look at the homes surrounding City Centre and see how much they grew after City Centre's completion. I recommend Eado to my clients looking for good investments in the city. I have great expectations for EADO. Worth a buy and hold in my opinion.

John, I would be watchful of how quickly the office space in the Eat River Project will be filled. Houston has an abundance of vacant office space at the moment due to COVID and job loss. If the office space becomes leased quickly that is a good indicator of how strong the rental market will be. I have noticed more people moving to the suburbs since companies are allowing flexible work. In short, keep an eye on it, young professionals still want to live close to nightlife. 

@Conley Norris how do you feel about Spring Branch? From what I'm seeing that area seems to also be undergoing gentrification in small pocketed areas. It seems like its slightly more developed in terms of amenities (City Center, Memorial mall)? Maybe I missed the train?

@Blaine Gerick that is awesome advice! I will be sure to look into that as an indicator.

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