How to Buy Rental Property in Houston
Today, we are sharing some tips on how to buy rental property in the Houston market. The first thing you want to do is buy the right property. The right property tends to be a 3 bedroom, two bathroom single family home with a two car garage. Look for a brick house that was built after 1960. These homes are easy to take care of, they appreciate well and they seem to represent the bulk of our entry level housing stock in this city.
It’s also important the home is near good schools and the subdivision is stable. Tenants who rent homes in good school districts tend to stay in the property longer, they take better care of the house and they’re likely to pay their rent on time. You don’t have the same tenant quality in bad neighborhoods or areas with failing schools.
The rate of foreclosure also has a lot of bearing on how much home ownership there is in a particular neighborhood. Take a look at the owner occupancy rates versus landlord homes. High foreclosure rates are often in neighborhoods that are not well taken care of or appreciating well.
In Houston, we have a multiple listing service (MLS) that is easily searchable and very
user-friendly. It’s called HAR.com, and if you work with a real estate agent, you can set up specific searches that will help you find ideal properties.
There is an active wholesale market here. People will get distressed properties under contract and then sell the contract to you. The timeframe with these opportunities offer little opportunity for due diligence and often require large deposits. It’s a heated market and you need to be careful, but good deals can be found.
Once have a contract, get a make-ready budget done. There will be cosmetic needs for the property before you put it on the rental market. Get the house inspected by a licensed inspector and have a good idea of how much money you’ll need at closing to make the home ready for retail sale or rental.
Finally, close quickly with cash. Most distressed properties won’t qualify for loans. So it’s best to be able to buy the property quickly with cash, get your work done, and then get a long term mortgage on that property.
We know how to do this carefully and cost effectively, so if you are interested in buying rental property in Houston. please contact us at Complete Property Services .