Rent vs. Buy: The Houston Real Estate Investing Market Debate

Posted by Chris Clothier on Mon, Jun 16, 2014

houstonrealestate

The classic debate returns. The “rent vs. buy” issue has been around for ages, but the answer is never as clear as one would think. That doesn’t mean that there aren’t distinct pros and cons to both renting and homeownership. In fact, many of these points transcend location, from the hottest metropolitan areas to more modest suburbs.

As it relates to real estate investing, the rent vs. buy question means a lot!  It determines what strategy a real estate investor is going to implement when they purchase a property.  Whether an investor is buying in Memphis or in Dallas or even Houston, which is our newest market, this debate is incredibly important for us as a company to stay up to date. 

So we pulled some data and some key points for real estate investors to take note of in the Houston market in particular.  As it grows as an optional market with our company, the dynamic between renter and buyer will continue to have a big impact on investors' success.  The Houston housing market is on fire with thousands of new builds planned and property values going up every month.

Rent vs. Buy


Pros

Cons

Renting

  1. No mortgage.

  2. No maintenance woes.

  3. More flexibility.

  4. No worry of foreclosure or loss of home value.

  1. Cost may be more over the years.

  2. Some limits on what you can do in terms of renovations and additions to the property.

  3. Some people just like to own.

Buying

  1. Regarded as a long-term investment.

  2. It’s yours to do with what you will.

  3. May save in housing costs in some areas.

  1. Risk of foreclosures.

  2. Chained to mortgage payments.

  3. Unforgiving markets make it easy to be outbid.

  4. Responsible for all maintenance and repairs.

  5. Less flexibility.


We know that different regions have different climates to their real estate markets. While it may be better to buy in some places, renting may be the best (or only) option in some more challenging markets. While there are fairly concrete pros and cons in the “rent vs. buy” debate that tend to hold true no matter where you are, we all have to remember the classic phrase:

Location, location, location!

The Climate of Houston Real Estate

According to Money CNN, it’s actually cheaper to buy instead of rent in Space City. The article cites the median home price at $200,000, compared to the average monthly rent cost of $1,800 as of this year. Those great prices on homes are due to the abundance of land on which to build new homes. In other more compact cities, land is limited, which causes housing prices to skyrocket thanks to supply and demand.

Houston has a lot of big employers in the oil production and energy production sectors, as well as a growing number of college graduates. There are a lot of great economic happenings in Houston, which may bode well for those looking to settle down for more than a few years. Houston real estate is shaping up to be a good environment for homebuyers. Renting in Houston works best for those who don’t intend to put down permanent roots.

The housing market still makes it hard on buyers — it may not be worth the fight when planning on sticking around for a few years, tops.

Even will the lesser overall housing cost in buying in Houston, keep in mind the more universal pros and cons to renting and buying. Certain lifestyles may very well be conducive to renting, no matter the difference in cost. For the real estate investor, Houston is still a place rich with growth and opportunity.

How do you feel about the rent vs. buy costs in Houston? Share in the comments.

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Topics: real estate investing, rent vs. buy, houston real estate