Buying a Houston real estate investment is an opportunity that comes with high profitability. The Houston real estate market 2019 is one to tap into given the stability of the market and its track record of having some of the best long-term real estate investments in America. Current property prices are relatively low which makes Houston real estate investing a predilection for many real estate investors. However, Houston’s overall economy being strong, accompanied by low unemployment, and a lack of inventory in many market segments will drive property prices up. Real estate analytics thus point to the profitability and viability of buying a Houston real estate investment today.
In this article, we will provide you with a list of the best neighborhoods to invest in Houston. Buying a Houston real estate investment has been made easier with the tools that Mashvisor has built to help you find the best locations for real estate investments. Before we start with our list of the best neighborhoods for a Houston real estate investment, let’s explore the current Houston housing market and its trends.
Houston Housing Market Forecast 2019
The Houston metro area offers some of the best Houston real estate investment opportunities given the stability of the market. The area has income properties providing both cash flow and equity growth at a price that is well below replacement value. The median home value in Houston hovers around $400,000 and is expected to grow even further in the upcoming year. Real estate market analysis predicts that home values will rise another 3.4% within the next year. Moreover, the Houston housing market forecast for the 12 months ending in the third quarter of 2019 is positive, with home prices expected to be higher in the 3rd quarter of 2019 than they were in the 3rd quarter of 2018.
Additionally, Houston investment properties appreciated 52.91% over the last ten years, averaging an annual home appreciation of 4.34%. This rate has put the Houston real estate market in the top 10% nationally for real estate appreciation. However, according to the National Association of Realtors (NAR), price appreciation will slow down, but home prices will continue to rise. Therefore, we encourage you to buy a Houston real estate investment now before prices rise too high.
Related: 2019 Houston Housing Market Predictions: What You Need to Know
What Are the Prospects for Airbnb for Houston Real Estate Investment Opportunities?
Airbnb is very popular in Houston as it is one of the most vibrant tourist destinations within the state of Texas. Airbnb Houston real estate investment properties have seen the most growth with the highest number of listings. Last year alone, hosts in the Greater Houston area earned a combined $72 million in supplemental income, welcoming about 512,000 guests.
Moreover, the growth in short-term rentals such as Airbnb in Houston has complemented the hotel industry as opposed to competing with it. Hotels have been experiencing a fairly robust growth along with Houston short-term rentals. According to real estate market analysis, the most growth has been seen in rural communities.
What About Airbnb Regulations?
Is Airbnb legal in Houston? Airbnb regulations are fairly lenient in the city. As a matter of fact, Houston welcomes Airbnb with open arms. Last year, Airbnb began collecting and remitting the Texas state occupancy tax on behalf of its hosts. In 2018, the tax was 6%, of which Airbnb remitted over $15 million to the state of Texas. While Airbnb regulations seem to be lenient, it is crucial that you contact the local city council to inquire about a certain neighborhood’s regulations as they vary from one area to another and are continuously changed and updated. Make sure to inquire about the most recent Airbnb regulations within your desired location.
Where to Find a Houston Real Estate Investment Today
Below, using Mashvisor’s investment calculator, we have assessed the most profitable locations within the Houston real estate market. We have provided two lists to cater to the needs of real estate investors, one with top locations for traditional real estate investing, and the latter for Airbnb short-term Houston rental properties. Whether you are looking for an Airbnb or traditional Houston real estate investment opportunity, this list will further assist you in selecting the right opportunity.
Best Neighborhoods to Invest in Traditional Long-Term Rentals:
Greater Fifth Ward
- Median Property Price: $127,450
- Traditional Rental Income: $1,176
- Traditional Cash on Cash Return: 3.8%
- Price to Rent Ratio: 9
South Main
- Median Property Price: $276,220
- Traditional Rental Income: $1,918
- Traditional Cash on Cash Return: 4.5%
- Price to Rent Ratio: 12
Greater Third Ward
- Median Property Price: $247,583
- Traditional Rental Income: $1,488
- Traditional Cash on Cash Return: 2.5%
- Price to Rent Ratio: 14
Related: The Top 4 Neighborhoods for Houston Real Estate Investing
Ost – South Union
- Median Property Price: $188,183
- Traditional Rental Income: $1,086
- Traditional Cash on Cash Return: 1.9%
- Price to Rent Ratio: 14
Greater Eastwood
- Median Property Price: $375,589
- Traditional Rental Income: $1,812
- Traditional Cash on Cash Return: 1.8%
- Price to Rent Ratio: 17
Best Neighborhoods to Invest in Houston Airbnb Rentals:
Greater Fifth Ward
- Median Property Price: $127,450
- Airbnb Rental Income: $1,543
- Airbnb Cash on Cash Return: 5.8%
- Airbnb Occupancy Rate: 38%
Golfcrest – Bellfort – Reveille
- Median Property Price: $204,238
- Airbnb Rental Income: $3,170
- Airbnb Cash on Cash Return: 8.6%
- Airbnb Occupancy Rate: 55%
Braeburn
- Median Property Price: $267,314
- Airbnb Rental Income: $2,678
- Airbnb Cash on Cash Return: 4.5%
- Airbnb Occupancy Rate: 64.2%
Astrodome Area
- Median Property Price: $138,880
- Airbnb Rental Income: $1,655
- Airbnb Cash on Cash Return: 4.1%
- Airbnb Occupancy Rate: 46.3%
Midtown
- Median Property Price: $431,380
- Airbnb Rental Income: $2,665
- Airbnb Cash on Cash Return: 2.3%
- Airbnb Occupancy Rate: 61%
With the cash on cash return being high, the prospect for higher profitability is plausible. Owning a Houston real estate investment makes for a fruitful investment strategy. We encourage you to consider the aforementioned locations for both your Airbnb or traditional income property. To further supplement your search and residential investment property analysis, we recommend that you resort to Mashvisor’s heatmap analysis tool. The heatmap analysis tool enables real estate investors to find income properties by identifying areas that have the highest listing prices, cash on cash returns, rental income, and Airbnb occupancy rate. Mashvisor’s heatmap is the fastest way to unlocking money-making areas.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
