Houston rental real estate market has been on a steep upward trajectory throughout the year and the trend continued during the month of July. If you already own investment real estate in Houston Texas, none of this will come as a surprise to you. You probably have experienced first hand the spike in demand for well located properties and the rising rents across the board. In fact, all of our clients properties that have come up for re leasing this year have fetched higher rents and longer terms due to this demand. But many who come to read these pages aren’t local Houston folks and they always wonder how the market is doing so we try to answer those questions as empirically as possible. From HAR latest press release :
Houston’s lease property market saw mixed activity in July. Rentals of single-family homes climbed 15.0 percent compared to July 2011 while year-over-year townhouse/condominium rentals declined 2.8 percent. The average rent among single-family lease homes reached a new all-time high of $1,669 in July, up from $1,642 last month. The average rent among leased townhouses/condominiums declined to $1,388 from the record high of $1,410, also reached last month.
Since May, the rental market for single family homes has been on a 15% year over year increase trend and that continued in July. Average rents continue to climb and reached the highest point to date. Town homes and condos have a hard time competing – High monthly maintenance fees in this property class require higher than normal rents to make the numbers work. And when you start asking higher than normal rents you bump up against single family home rents. What tenant would pick a town home or a condo when they can have a single family home for the same price or close to it? But in the end this doesn’t spell doom for the owners of those properties either. Rentals might be down slightly but that’s compared to what was a pretty good year last year.
Lastly, a note of caution: Everyone’s a genius in a bull market. Make sure these high rents we’re experiencing aren’t just covering up cracks in your overall strategy temporarily. When in doubt, pick quality and be disciplined.