In recent years, Houston has become one of the top rental investment cities in the United States. ABC News reported that in 2013 an investor could conceivably recoup a gross yield of 11.2 percent of his initial investment in the first year. In subsequent years the investment potential in the city has risen even higher. As the fourth largest city in the United States, Houston is more than just a thriving metropolis. It has become the gateway to Latin America and the energy capital of the world. It is estimated that over half of Fortune 500 companies are based out of Houston.

As the population of Houston grows by leaps and bounds, the demand for rental housing becomes paramount. Home values in the city experienced an increase of over 10 percent in 2014 according to the Houston Business Journal. The rise in home sales has spurred a building frenzy of new construction homes. It is estimated that the increase in home values will slow down in 2015, but the demand for affordable rental homes will continue to grow, which makes it an ideal time to purchase a rental investment in the city.

Top Reasons to Purchase a Rental House in Houston
If you are considering purchasing a home as an investment rental, then Houston might be the ideal place to start your home search. Here are several top reasons to focus on Houston for a rental home.

  • Low Vacancy Rate -- Rental home inventories are at an all time low, so your rental will not sit vacant for very long. The demand in Houston for rental properties far exceeds the supply. The population is quickly increasing. Rentals in the heart of the city, within easy distance of public transportation, are a hot commodity. Most rental homes have a waiting list of interested renters who are vying for the rental.
  • Rising Home Values Means Increased Rent -- The increase in home values has driven up the price of rent in the area, which means more dollars in your pocket each month for rent.
  • Tax Deductions -- Owning rental property gives you huge deductions on your taxes each year. You can conceivably deduct your mortgage interest, property depreciation, property management expenses, and the general maintenance expenses of keeping up the rental property. Your travel expenses to, and from, the rental are also usually deductible.

Houston Neighborhoods to Consider for a Rental Home Investment
Here are four of the top neighborhoods for rental home investments in Houston.

  • Houston Heights -- Rental homes in Houston Heights average $1,500 to $3,500 per month. Its an area of modest sized homes with small yards. The neighborhood usually attracts young business professionals with families.
  • Oak Forest -- Houston's Oak Forest has become one of the fast selling neighborhoods in Houston, according to Houston Press. Rental homes average $1,500 to $3,000 per month. New home construction in the neighborhood has been booming throughout 2014.
  • Timbergrove -- Rental homes in Timbergrove average $2,000 to $4,000 per month. The area is highly desirable and a coveted location for professionals who seek a large home with a big yard.
  • Montrose -- Montrose has boomed for years as a desirable rental icon. Rent ranges from $1,500 to $6,000 per month in the area. The neighborhood consists of garage and warehouse style apartments, duplexes, and high-end homes.

There is very little doubt that if you are looking for a rental home investment in a hot, booming market then you can't go wrong with the Houston area. The purchase price of homes remains modest when compared with the return you will ultimately make on monthly rent.


POSTED April 23 2015 10:22 AM

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