Houston Real Estate Investing

Read our Advertiser Disclosure.
Contributor, Benzinga
July 15, 2020

Looking for the easiest way to start investing in real estate? Fundrise lets you start building a profitable real estate portfolio with as little as $10. Get Started

Houston continues to be 1 of the top U.S. markets for real estate investments. The energy industry is booming, but paychecks go way further than they do in cities on America’s coastlines. Even as societal shifts during the pandemic have reduced the world’s need for oil, Houston is expected to hold its position as a great market to invest in.

Houston real estate also tends to avoid the volatility of more famous metropolitan areas. You won’t have to worry as much about housing bubbles in this fairly priced yet growing location. Learn more about Houston real estate investing in our review.

Why Invest in Houston?

Real estate in Houston benefits from the incredible job prospects, fair average purchase prices and positive forecasts.

Affordability

Houston is somehow still an affordable buyers’ market even though the city has a 3-year appreciation forecast of 10.5%. The median condominium home price is $175,000 with a median monthly rent of $1,517. 

The average home in the city is sold anywhere from 5 to 20% below fair market value. There is no shortage of culture, which invites younger, more affluent renters to the area. Professional sports teams, a vibrant popular music scene, world class cuisine and plenty of tourist attractions make Houston an easy sell to good tenants.

Experts reported that Houston real estate prices were actually forecasted to rise because of a housing shortage. Buyers and renters initiated a “flight to affordability” that benefitted many mid-level markets. At the height of the pandemic in March 2020, Houston sold 571 more single family homes than it had the year previous (an increase of 8.2%). Sales of all property went up 6.9%.

Population

The metro population of Houston is approximately 6.9 million. Houston saw double digit increases in home sales for February 2020 and a decrease in March. As social distancing directives slowly but surely ease away, experts predict that Houston will keep pace with the country’s leading markets because of its population’s continuing need for housing.

img_5f0f2369f2697

Attribution: Visit the USA

All else being equal, Houston is a great place to be a landlord. The economy routinely sits at full employment with 74.76% of those jobs being white collar. The median age is 32.9, and the average household income is $81,995. 

The public transportation system could be improved, but most Houstonians can afford the car that takes them to and from work every day. Consistent transportation bodes well for sustainable neighborhoods and family growth, which we also see in the city — 44.51% of households are based in marriage, which is great news for landlords.

Jobs 

No less than 49 Fortune 1,000 companies call Houston home. This is the largest concentration of such companies in the U.S. barring New York City. The Texas Medical Center, which receives over 7 million visits each year, performs more heart surgeries than anywhere in the world. This speaks to the huge healthcare industry present in the city, a bastion of job creation right beside the energy industry. Halliburton, Apache, Marathon Oil, Sysco and Conoco Phillips all have headquarters in Houston.

The city also boasts a huge aeronautics and transportation industry. The Port of Houston handles the most cargo in waterborne tonnage of anywhere in the U.S. All of this kept Houston from suffering the same levels of job loss as the rest of the country during the coronavirus pandemic. Of the 12 largest metropolitan areas in the country, Houston lost the least number of jobs by percentage. Stability in the job market means stability in the real estate market, especially in a town with a high median household income.

Houston Real Estate Market Forecast

Single family home sales fell 20.2% year-over-year in May due to the pandemic. The price fell by 7.4% as well, which was the 1st decline since January 2018. Impressively, the $249,000 median price of single family homes stayed the same while median condo prices actually rose 2.9%.

The shock of the coronavirus definitely affected Houston, but the real test of a market is how quickly it rebounds. First-time buyers may not float the market in 2020, but the industry expects Houston’s 2021 to be strong and slightly skewed to the seller’s side. The city also had a 60-month trend of positive real appreciation, which is estimated at around 17.40%.

Investing Passively in Houston

Passive real estate investing in Houston through platforms like DiversyFund can be a great way to grow your net worth without the hassle of landlording.

Real estate stocks and how to invest in REITs are 2 commonly-used financial vehicles. The stability of the city adds to its turnkey appeal. Houston’s employment profile means that it’s relatively easy to find an manageable tenant with an investment in the community.

Finding a good property management company is essential to a positive experience as a passive real estate investor. Some experts think that passive real estate investors should look for property managers even before trying to find properties. The Houston real estate industry is expansive, so you should have no problem vetting several choices here. 

Best Passive Real Estate Investing Platforms

Compare our DiversyFund review to some of the other reputable real estate investing platforms on the market. Although the investing may be passive, your choice of platforms should be quite active — it will make a huge difference towards your success.

Space City is Running Out of Space

Houston is nicknamed for its importance in the field of space exploration, but if trends continue, space in Houston will be in short supply. Houston is the 4th largest city in the entire U.S., and investors are quickly uncovering the potential of this metro giant. Invest in Houston real estate today.

Accelerate Your Wealth

Arrived Homes allows retail investors to buy shares of individual rental properties for as little as $100. Arrived Homes acquires properties in some of the fastest-growing rental markets in the country, then sells shares to individual investors who simply collect passive income while waiting for the property to appreciate in value over 5 to 7 years. When the time is right, Arrived Homes sells the property so investors can cash in on the equity they've gained over time. Offerings are available to non-accredited investors. Sign up for an account on Arrived Homes to browse available properties and add real estate to your portfolio today.

Hold on!

Before you go, we think you'll find these real estate investment offerings even more interesting. Looking for even more exciting opportunities? Subscribe below to get notified as soon as interesting new offerings are added to our real estate investment screener.