Planning on Buying a Rental Property in Houston?
Rental property investments in Houston tend to offer far-reaching potential. Buying an investment property means that you can give yourself the benefit of passive income and increase your personal long-term wealth while you turn your attention towards other investments.
If you are just starting out in the world of real estate investing, it pays to read insider tips on how to make the most out of your investment. You need to do the research and put in the hours to ensure you’re prepared in order to get your investment going on the right track.
In this article, we’ll delve into the basics of buying an investment property in the Houston area. Follow these recommendations to maximize the potential of your rental property purchase.
Investing in the Houston, Texas Real Estate Market
What Is Houston Real Estate Market Like?
Houston has had a hot real estate market for years now. The city and its surroundings are connected to important industries. The local oil, port transit, and manufacturing businesses create a constant demand for housing.
There is a need for rental homes at every income level. Smart rental property investors can boost their income and expand their investment portfolio by focusing on the specific needs of the community they invest in.
Also, it’s important to remember that Houston keeps growing. The city has already merged with numerous smaller towns in its perimeter and is poised to swell in size over the coming years.
Top Tips for Buying Rental Property in Houston
Let’s take a look at the most important tips and recommendations on how you can get the best experience and top return on your Houston investment.
Find Properties in Your Price Range
A great thing about investing in Houston’s real estate market is that there’s something for investors at every price point. Starting from fixer-uppers, tiny homes, and small condos all the way up to to huge mansions and villas, Houston has it all.
This is why you should determine the price range that you are willing to operate in. By choosing your price range, you’ll effectively remove a lot of properties that would otherwise clutter your view of the market.
When you’re determining your suitable price range, it’s essential to take into account all the associated taxes and even HOA fees. The various taxes and fees can amount to a considerable amount of money, and if you fail to calculate additional expenses, you can be caught off guard when they emerge.
Avoid Properties Located in Flood Zones
One thing that you should keep in mind when investing in Houston properties is the annual risk of floods and severe storms. When it comes to flood risks, some neighborhoods are safer than others.
You should always avoid property investments in floodplains. These areas can be human-made or natural, but they may lead to significant costs after a severe weather event. Ensuring your property against floods in a flood-prone area can get expensive quickly.
Additionally, you should focus on buying a property that is comparatively safe from hurricanes.
Get a Home Inspection
You should always contact a reputable home inspector before you proceed with your potential investment. Among other things, the home inspector will check the property’s structural integrity, roof upkeep, and foundation issues.
Since storms frequent the Houston area, you want to ensure that all damage from previous storms has been properly addressed. This is another challenge that can easily be solved with the help of a professional inspector.
Opt for High-Rent Neighborhoods
Property investments are a great way to boost your wealth and receive passive income. If you want to maximize your ROI, it’s important to keep an eye out for the areas that have the highest rent payment to purchase price rate.
Account for the renovation and improvement expenses when you are weighing your rentals’ upfront costs against the potential income. You need to find the right balance between the numbers to reach your investing goals.
Consider the Benefits of Professional Property Management Services
Do you know how much time and effort self-managing a rental property can take? Sometimes beginning investors aren’t aware of what they are getting into. The daily responsibilities can become too much if you have more than a few rental units.
Your Houston rental property needs to be habitable at all times. That means taking care of regular upkeep and repair needs. You also have to be ready to answer emergency requests and neighbor complaints.
Self-managing requires around-the-clock readiness to solve problems. If that’s not what you’d prefer, consider the services of a reputable property management company. The best companies address all of your needs and interests while providing a maximum quality of life for your tenants.
Do Your Research
The Houston property market is a small universe. In order to properly navigate it and make sound decisions, you have to do plenty of research beforehand. Only then can you be sure that you’re making the best possible choices.
Start by understanding how the market is behaving right now. See how much rent comparable rentals have incurred in the previous months. Moreover, you should aim to predict where the market heads in the future.
That doesn’t mean consulting a crystal ball. You should browse the web to see whether there are major developments underway. For instance, new educational facilities, infrastructure, and real estate projects are all indicators of potential future growth.
Boost Your Rental Property’s Appeal
Once you have closed your purchase, it’ll be time to make the property as attractive to prospective tenants as possible. Here are some of the steps that you can take:
- A simple paint job could make a huge difference. Apply a fresh coat of paint to your new rental property to increase its appeal.
- Purchase new hardware. Updating ordinary hardware components like light fixtures, house numbers, and mailboxes can change the look and feel of your property.
The Bottom Line: Buying Rental Property in Houston
Houston is a hot market for rental properties. The strong industry and growth metrics demonstrate that this trend is likely to continue into the future. As a rental property investor, you can expect to find a strong addition to your portfolio in the Houston area.
However, as with any other investment, you should conduct plenty of research before committing to a purchase. For instance, it’s important to consider the flood risks and find the best neighborhood for your investing goals in Houston.
Looking for help with a real estate investment in the Houston area? The team at OmniKey Realty has extensive experience helping real estate investors maximize their profitability and make the most out of their properties.