Last year, many real estate investors shunned the idea of investing in real estate in Houston. Hurricane Harvey, in fact, has left many real estate investors uneasy and hesitant to consider real estate investing in Houston. However, the Houston real estate market did not remain turbulent for long. The construction and the rehabilitation efforts invested in the Houston real estate market in the past year have made the market stronger, more resilient, and more attractive. Many real estate investors and developers have sought the opportunity to enhance and improve their status which in return, collectively enhanced the Houston real estate market. Real estate market analysis, in fact, shows that the Houston real estate market is an optimistic market that can certainly withstand calamities. Moreover, neighborhoods that were not explored before have become top selling. Read to learn more about these places for the best real estate investments in the Houston real estate market.
In this article, we will facilitate valuable information to help you find the best real estate investments. The sequence of the article is as follows:
- Hurricane Harvey and its aftermath
- Top reasons why you should invest in Houston real estate
- Best real estate investments within the Houston real estate market
Hurricane Harvey and Its Aftermath
Right before Hurricane Harvey hit Houston, the Houston real estate market was a seller’s market with an abundant supply of homes. Real estate investors, in fact, were savvy to not buy a home that had been listed on the market for long. They instead fought over those newly listed investment properties. Things turned around with Hurricane Harvey. With the arrival of the hurricane, the Houston real estate market froze. Over 100,000 homes had been inundated, totaling over $29 billion in losses.
At first, the market suffered, with less real estate investors keen on trading in the market. However, as the year came to a close, construction efforts picked up. Not only did owners fix their flooded homes, new investment properties were built and more housing in new areas had become available.
Toward the end of 2017, the Houston real estate market boomed. Buyers closed on more than 80,000 homes, deriving about $23 billion in sales, translating into a 3.5% increase compared to that of the previous year. The median home price, moreover, has reached $230,000. That is also 3.6% higher than that of 2016. Through 2018, home values are expected to continue to increase. The Houston real estate market is expected to see 2.8% growth compared to last year.
Related: Buy Investment Properties in These Neighborhoods in the Houston Real Estate Market
While Hurricane Harvey has had detrimental effects on the Houston real estate market, the efforts the developers, real estate investors, and government officials made to revive the city and counterweight the losses were fruitful. Hurricane Harvey has, per se, initiated investors to seek out locations that were not explored before and which experienced the least damage. Given such circumstances, finding a location that can survive a catastrophic event as such has become more preferable for many real estate investors.
Another of the Houston real estate trends resulting from Harvey is the increased sales of damaged properties. Real estate investors are now buying investment properties that were flooded and consequently damaged and are renovating them and selling them for higher. If you have the time and wish to make big bucks, we recommend further investing in these homes. With good planning and budgeting, your investment property will sell fast and you will have a high return on investment.
Would you like to start searching for property? Mashvisor can help you find an investment property within the Houston real estate market altered to your needs.
Reasons Why You Should Invest in Houston Real Estate Market
Population: The 4th most populous city in America and the largest in the state of Texas, Houston has a population of over 2.2 million people. Houston will continue to see a large influx of people given the attractions that it offers from an enabling business environment to a wealth of culture, sport, fashion, technology, and education. Tourists and visitors, in addition, continue to flow into the city every year for its abundant amenities and entertainment venues. If you are a real estate investor and keen on long term rental properties and/or Airbnb, the Houston real estate market makes for a profitable business.
Related: Investing in the Houston Real Estate Market? That’s What You Need to Know
Nascent in its Development: The Houston real estate market has not been fully exhausted. The city has large plots of land for investors to invest in. Unlike San Francisco and New York that are fully built now, Houston has a low-density sprawl, meaning that there are many spaces for construction within the city. You can even find land in inner-city neighborhoods that you can buy and build your home on.
Booming Trade: Another factor is the booming trade, particularly the foreign aspect of it. Houston has the busiest US port and the largest for the amount of total cargo tonnage handled. This has not only made Houston’s economy stronger and more stable, but also strengthened foreign trade and welcomed more diversity. Many foreign businessmen come to Houston to conduct trade and close on deals. This, in turn, has encouraged and increased demand for rental properties in Houston, of which real estate investors are pursuing.
Economy: Finally, the economy of Houston is one of the main reasons why you should invest in Houston real estate. As a matter of fact, the Houston region is one of the most important industrial bases in the world. It also has the largest medical complex in the world, Texas Medical Center. Houston has more than 1,000 companies, mainly in the life sciences and biotechnology industries. It is the US energy headquarters and a world center for the oil and gas industry. Houston is home to 6,400 manufacturers employing more than 240,000 skilled workers that produce over $80 billion in goods annually.
The strength of the economy has attracted people from out-of-state and out-of-country. This, in return, has heightened the demand for both housing and commercial space. If you are looking for investment opportunities to bring about high cash on cash return and return on investment, we further recommend investing in Houston real estate.
Where Is the Best Place to Invest in Real Estate in Houston?
In this section, we will tell you about the places to find the best investment properties in the Houston real estate market. The neighborhoods with the most opportunities within the real estate market are:
Midtown
- Median Property Price: $371,125
- Traditional Rental Income: $2,540
- Airbnb Rental Income: $2,304
- Traditional Cash on Cash Return: 2.02%
- Airbnb Cash on Cash Return: 0.59%
- Traditional Cap Rate: 2.02%
- Airbnb Cap Rate: 0.59%
- Occupancy Rate: 51.78%
Fourth Ward
- Median Property Price: $507,568
- Traditional Rental Income: $2,640
- Airbnb Rental Income: $2,603
- Traditional Cash on Cash Return: 1.44%
- Airbnb Cash on Cash Return: 0.83%
- Traditional Cap Rate: 1.44%
- Airbnb Cap Rate: 0.83%
- Occupancy Rate: 51.63%
Visit Mashvisor and start searching for properties in your desired neighborhood. For investment-related rates, explore Mashvisor‘s investment property calculator. Not only will the investment property calculator calculate cash on cash return, but also cap rate and cash flow. Visit Mashvisor to learn more about its investment property calculator.
Related: Houston Real Estate Market: Top Neighborhoods – Q4 2017
Although Hurricane Harvey has incurred many damages, the efforts that real estate developers, investors, and government officials made to offset the consequences left the Houston real estate market stronger than it was before. More neighborhoods have been explored and more housing units have been built. According to analysts, the Houston real estate market is set for more growth. Don’t shy away from the Houston real estate market as it may unleash a plethora of investment opportunities.