For years, real estate investors have had incredible faith in Houston. Proposition after proposition has been tabled there; with its oil and gas links often making it a place which is awash with money.
However, as with anything, when more information is documented about an area, more myths start to occur. This seems to have occurred with the city, with various myths about the market entering the photo.
Bearing this in mind, we have tapped into the knowledge of Allen R Hartman – a man who knows the Houston real estate market inside-out. Let’s now take a look at some of the main misconceptions that are focused around investments in this area of the country.
Myth #1 – You need lots of money to invest
There’s no doubt that it certainly helps to start with more capital in real estate, particularly with a market like Houston. To suggest that it’s impossible to invest is a huge inaccuracy though – it’s not the case in the slightest.
Instead of starting with a lot of money, you instead just have to be more creative with the ways in which you finance your portfolio. This might mean buying a fixer, remodeling before renting it out and financing – or another similar method. It’s hardly a seamless means of financing, but with little capital available it’s one of the few options you have and it might be worth considering as a result of this.
Myth #2 – You need to own your own house before buying a rental property
This is probably one of the biggest myths donning the industry and in truth, it’s hardly surprising. After all, the general consensus is that if you don’t own your own house, how are you going to be in a position to buy one to rent to someone else?
First and foremost, it’s up to you how you decide to live. Some people might move around frequently, and therefore renting is the best option.
It’s not just about logistics though. From a financial perspective, a rental home might be smaller and therefore cheaper to buy. Not only this, it might make it easier to buy in the future as you will already be receiving rental income.
Myth #3 – Tenants will always leave when you raise rents
In an area like Houston where real estate can get very expensive, it’s hardly surprising that this is such a common myth. However, as a landlord you really don’t need to worry, and thoughts of tenants becoming frustrated and leaving immediately after you raise rents is really far of the mark.
Sure, if you go overboard, you will see tenants leave. However, as long as you are reasonable with the increases, most tenants will be happy. After all, it’s a lot of hassle moving house, and for the sake of a small amount of money each month it is generally easier for them just to stay put.