Good neighborhoods for Houston rental property?

Question

Would like decent neighborhood (good schools, etc) for preferably turnkey single family residence.  The newer the build (and less maintenance) the better. 200-300K range.  Closer to inner loop if these neighborhoods exist.  Is there anywhere with both cash flow and appreciation?

Kara Smits · Answer

You are asking for a lot, closer to the loop+good schools+new would be difficult in that price range and impossible to cash flow.  If you are not very concerned about cash flow you could find houses in Tomball, Spring and possibly Katy that fit your needs.

Tom Cooper · Answer

@Vicki Chu, Nobody can predict future appreciation.  The past does not necessarily predict the future.  You need to narrow down what is your top priority (cash flow, level/type of tenants, potential for appreciation, etc.)

@Alex J.. what do you mean settling is no big deal in Houston?  Probably 90% plus of all houses in Houston have had or will have foundation/settling issues at some point.  Our clay soils - not much one can do to avoid it.  Maybe it is not as big as earthquakes in Cali, but it is a definite issue (and can be a very costly one) to deal with.

Alex J. · Answer

I agree with you.  that was my point in saying it's not a big deal because every home has that issue...you get it fixed with lifetime warranty and you'll find a buyer... whereas in Los Angeles if you get foundation damage it's a very big deal.  That's all I mean by that.

Harlan Mott · Answer

Anyone in the 3rd ward or just south of it?  I'm thinking of picking up a place or two there.  But I'm not from Houston.

Alex J. · Answer

@Vicki Chu

the meadows place is right in stafford, same zipcode... id say its a C class neighborhood section 8 tenants are not uncommon... but in all honestly ive found tenants to be fine.  A lot of working families in the area, its a central location, lot of multi families, no hoa.  its all about how you setup your systems and manage relationships like everything else.

ive had high end rentals, mid end rentals, and low end rentals between houston and los angeles... each one comes with their own pros and cons so it comes down to what your personal comfort level is

Vicki Chu · Answer

@Alex J. thanks! How are the tenant choices and those neighborhoods you mentioned? I haven't heard of Meadows but am familiar with Stafford and Missouri city.

Alex J. · Answer

Sugarland is a nice area but what we have found is you dont really get much uplift for buying a property that needs rehab, doing the work, and getting a premium for it... so in essence the "fixers" are the same as the "fixed" for the most part when it comes to price....its very weird.

i think its because the schools are just so good in areas like first colony settlers way commonwealth etc that everybody wants a house to just avoid private school cost and have equity in their place.  rents are like around or under $1sqft per month  so you are very much breaking even or even a slight loss every month there for the hope of appreciation.  if you do a 15 yr mortgage at least you build equity but you will be negative on cashflow every month - but you will have a better quality tenant in theory...but always need to do a background check and get deposits etc.  a lot of the 200-300k priced homes are from the 70s 80s so if there hasnt been a fresh rehab done you might have things like settling (not a real big deal in houston), maybe some dated electric, floors might need replacement etc... cosmetic things, but generally not in bad condition and wont break the bank

for cash flow rentals in lower B to C neighborhoods look to stafford, meadows, missouri city, those areas are all generally good rental areas... ive mentioned before i have a duplex in the area myself, great for cashflow

Vicki Chu · Answer

I see. You mean for appreciation? Specific zip codes? Sugarland wouldn't work? Thoughts on Sharpstown? Seems like it's gone up recently even though schools are not desirable.

Vicki Chu · Answer

Yes, lower amount is ok too.  But has to be in decent neighborhood.  Perhaps cash flow is not as important as reliability in tenants paying rent and taking care of the property.  If good appreciation makes up for break even or slightly negative cash flow, it's ok too.

Mitchell Benson · Answer

Very general question but sounds like you are looking for a high end rental at 200-300k

At that price point it's a little more difficult to get good cash flow. Try using the bigger pockets calculator on a "hypothetical house" you are looking into 👍

Good neighborhoods for Houston rental property?

Most Popular Reply