Beaumont, TX · Member since 2014 · 25 posts · 1 vote
I live in Beaumont but I am looking to invest in the Houston market. I am looking to invest in single family home rentals in the $150k price range. What areas would you suggest I look? Any suggestions or advice would be appreciated.
Spring, TX · Member since 2016 · 243 posts · 203 votes
9y
Why not invest in Beaumont? Cheaper to enter and less competition than Houston. At the 150k price range there will be alot of competition not just with other investors, but also first time homebuyers. I'm sure there's still money to be made, but you may be paying market value, especially on a rent-ready home.
Spring, TX · Member since 2016 · 243 posts · 203 votes
9y
Why not invest in Beaumont? Cheaper to enter and less competition than Houston. At the 150k price range there will be alot of competition not just with other investors, but also first time homebuyers. I'm sure there's still money to be made, but you may be paying market value, especially on a rent-ready home.
I'm exploring other options outside the Beaumont market to meet my eager & ambitious goals.
I have no clue, I'm actually doing the opposite of you, I've been looking further out from Houston instead of inside Houston. You definitely can find deals in your 150k price range though, maybe not in "Houston" (unless you're buying in certain areas), but in the surrounding areas for sure.
Spring, TX · Member since 2016 · 243 posts · 203 votes
9y
@Jason E. In Spring, I would focus on the areas in Klein ISD. I live in the 77388 zip and can vouch for that as a solid area and can find rents at 1%. Katy is another good area, although the parts I know (77450 zip) are a bit more pricey so I'm not sure if there is money to be made as far as cash flows. Not familiar with Humble but I've definitely seen properties come up on HAR that fit your price criteria.
Real Estate Broker · Houston, TX · Member since 2017 · 33 posts · 8 votes
9y
Jason E. Your best bet is going to be Spring or Humble at that price point. Possibly Cypress, but the market there was a little softer the last time I looked. The market in Katy is great, but you're probably priced out unfortunately at 150k
Real Estate Broker · Houston, TX · Member since 2017 · 33 posts · 8 votes
9y
@Jason E. Older rentals (1975-1990) $150-160k but your upkeep & management may eat into your ROI. The newer rentals that I would confidently suggest would be between 215-265k. ROI for that price point is better in Spring, imo.
Rental Property Investor · Park City, UT · Member since 2016 · 678 posts · 531 votes
9y
The Houston area is definitely full of competition. I invest primarily in Katy and Cypress and can't tell you how many times I have faced multiple offer situations.
This isn't directly related...but to give you some perspective...my wife (an agent) showed me a report the other day of active listings across Texas. Don't quote me on the specific numbers, but Houston was around 42,000...excluding Dallas, which was around 33,000, Houston had more listings than all other metropolitan areas combined. More listings doesn't necessarily correlate to more competition. It's just a huge market with a lot of activity.
Real Estate Agent · Houston, TX · Member since 2015 · 93 posts · 46 votes
9y
These 150K home at 3,2,2 that do not need too much work are getting really hard to find. There still is just simply not enough inventory. The market is in full swing as it usually is around the 4th. If you try and move outside of the city and get just ahead of the growth they will be too high and new, typically. If you come farther in there is just a lot of competition, typically. I think the trick is to be prepared to do something that the other thousands of investors with cash are not willing to do, I.E. more repairs, higher price or higher class of home.
I have been suggesting to new investors to do one at a time and be patient. The market is high right now and some are predicting some sort of a national crash. Houston does not follow the national trends but it might correct. You might think about doing one at a time to be safe and grow your equity and then if the market corrects go all in when there are more deals.
Investor · Cypress, TX · Member since 2016 · 170 posts · 139 votes
9y
Some really good posts and thoughts here. I do not know Beaumont nearly as well as Houston area and my biggest concern would be Property Management? If you can find good PM there then I'd have no reservations at all about buying there. I think the next great areas to invest in Houston will be all along the North and West where the new Grand Parkway is opening up the burbs like never before. I think this opportunity is at least as big as what Beltway 8 was back in the 90s. There are several other areas too (Medical Center, East Side & Baytown) but this area from 59 (Kingwood) to I10 (Katy) all along the Grand Parkway is an investors dream. It will be Big, Sustainable, and for the most part forgiving (hard to make a mistake). I like that you are looking in the $150k range as the rents in that pricepoint ($100k to $160k) are providing strong and sustainable returns and show no signs of slowing down. Look at who is moving to Houston and why? That has been strong for the last decade and every indication is that it will continue for a very long time.
Some people are very effective at self managing their buy and holds, but even the best eventually seem to either hit a wall in terms of the number of properties they can handle or the renters just eventually wear them down with relentless silly things renters do. We joke about it but we say "the fastest, surest way to get someone out of the Real Estate Investing business is to have them self manage their own rental properties ;-)
Several excellent teachers and mentors I've been fortunate enough to work with will tell you to just budget 10% of collected rent to hiring a good PM company. You will be happy you did and your life will be much better (renters won't drive you crazy, they'll drive your PM crazy instead).
Investor · Lumberton, TX · Member since 2017 · 146 posts · 93 votes
9y
Loving this thread. Originally from Houston now living in Beaumont and beginning my investment journey. My interest is similar to Jason's though I'm looking for a lesser price point and keeping to the Golden Triangle for the most part.
Out of curiosity, has Pasadena made any more progress in turning itself around? Is Pearl Land still too hot to find good deals in?
@Jason E. what are your reasons for not looking in your immediate area? Also, are you apart of either of the local REI groups?
As @Kevin Coggins mentioned... The $150,000 price point is hot with investors and first time buyers --- there are still areas where you can easily achieve the 1% of value in rent --- I primarily invest in The Woodlands, and Spring. I look and advise the investors I represent to look in areas with low tax rates. If you find an area with no MUD tax, you can usually reduce your tax rate by about 1%. A property tax rate of 2.3% vs 3.3% will generally net you an additional month's rent in profit. There are little pocket neighborhoods all over the area with no MUD tax, but be advised, other investors are also attracted to the low tax rate and the price points will be high compared to surrounding neighborhoods. Proof that if Texas would move from a property tax based income structure to an income tax or sales tax, we would see a massive increase in property values almost overnight.
Conroe, TX · Member since 2017 · 28 posts · 7 votes
9y
I'm just starting out wholesaling in the Montgomery County area, specifically Conroe and The Woodlands, and this thread has been very informative. Taking notes!
Investor · Spring, TX · Member since 2016 · 23 posts · 14 votes
9y
I also just moved to the Spring/Woodlands area and am looking at the market thinking about buying a property. I like the advise that @Jeff Wallace gave about taxes as I have not heard that before. The property taxes here are structured different than where I came from and it is good to see that there is a stragity for them.
Investor · Tarzana CA and Houston, TX · Member since 2015 · 326 posts · 130 votes
9y
Buy in Stafford Meadows places Missouri City.... Duplex can be found for that price and sfr that will rent 1200-1400 month around your price range ...decent cash on cash return on investment
I'm exploring other options outside the Beaumont market to meet my eager & ambitious goals.
I have no clue, I'm actually doing the opposite of you, I've been looking further out from Houston instead of inside Houston. You definitely can find deals in your 150k price range though, maybe not in "Houston" (unless you're buying in certain areas), but in the surrounding areas for sure.
Hey Kevin, Have you had any luck investing further outside of Houston? I've recently started looking on the outskirts and just curious what you've come up with.
I'm exploring other options outside the Beaumont market to meet my eager & ambitious goals.
I have no clue, I'm actually doing the opposite of you, I've been looking further out from Houston instead of inside Houston. You definitely can find deals in your 150k price range though, maybe not in "Houston" (unless you're buying in certain areas), but in the surrounding areas for sure.
Hey Kevin, Have you had any luck investing further outside of Houston? I've recently started looking on the outskirts and just curious what you've come up with.
Nothing yet, had an offer in on a house near Lake Livingston but didn't get it. I've been back in school over the summer so been pretty swamped between work, school, other investment stuff, and my family. Probably start trying to get more actively looking after this fall semester and when I have my money out of current investments (hopefully!).
Real Estate Agent · San Diego, CA · Member since 2017 · 99 posts · 52 votes
9y
@Brian Foster great insight! I'm an out of state investor and looking to TX for a higher cash flow, cap rate and cash on cash return. Considering other states as well, thank you!