A Houston Real Estate investment is not something you do just for fun. If a purchase is not going to make money for you, you shouldn’t make it. Before you make a purchase, you must have an idea of the expected performance as you seek to maximize your income. With real estate, you can make money in one of three ways:
- An increase in value on the property
- Rental income from the property
- Income-generating activities at the property
Taking a closer look at these three ways will help you as you seek investment properties.
An Increase in Property Value
The Houston Association of Realtors’ latest report indicates that May home sales jumped an astounding 28 percent over last year, with 7,794 single-family homes closing this year. This is a significant number, because the last time the Houston real estate market approached this volume of sales was in 2006, when in June 7,688 transactions closed. In addition, housing inventory was at one of its lowest points, dipping by 3.3 percent by the end of May.
Yet that’s not all to encourage investors. The median sales price has increased 11.9 percent over the last year to $188,000, and the average sale price is $256,790, which are both high points in the market’s history.
So what does this mean for the investor? It means that property values are increasing, with the exception of the housing segments priced below $80,000, which saw no gains. For those with properties in the $150,000 to $500,000 price range, sales volumes have increased substantially, as have prices.
Rental Income from the Property
Rental income from a property means ongoing income, which can be more valuable than one-time investment returns from the sale of a property. The MLS indicates that a total of 507 single family homes in Houston were leased in April. This is a 24 percent increase over last year and an 8 percent increase from March.
Interestingly, this increased number of homes rented has not lowered rental prices. In fact, it has done the opposite. In April, the average rent was $1,578 per month, which is a 6 percent increase over the April 2012 and a 3 percent increase over March. It is also the highest rental rate on record for Houston.
This means that Houston real estate investment properties can be quite profitable as rental properties. Investor friendly realtor Bill Edge is ready to help you find the bargain priced properties that you can turn into profitable rentals.
Income-Generating Activities on the Property
The final way to make money with Houston real estate is to purchase property that can have an income-generating activity. The most obvious option is a storefront that sells a product, but there are many other ways to make money with property. A parking garage generates income with the fee charged for parking. A car wash makes money when cars are washed.
In order to make money with property in this way, you need to understand the intricacies of running a particular business or meeting the needs of a particular group of people. Without this knowledge, this is one of the hardest ways to make money in real estate.
Your investment should make money for you. Making money in real estate begins with finding affordable properties. Experienced Houston realtor Bill Edge is ready to help. With Bill Edge’s help, you can find such a property and begin seeing income from your investment.