Living in Houston is great. But it's an even better place to be a rental property owner. 60% of residents live in rental units. And with home prices on the rise in the area, this figure will increase.
If you are considering a property investment in Houston, TX, you may wonder how much to charge for rent. Rent in Houston is lower than the national average, but home prices are even more affordable.
In this guide, we will help you understand the current market trends impacting Houston rental prices. We will also explain the main factors you can use to decide the right rent for your investment property.
Rental Market Trends in Houston, TX
According to rent.com, the average rent in Houston, TX is $1,125–$1,509. The exact figure depends on the size of the rental unit and its location.
Average Rent by Unit Size
The average rental unit in Houston is 882 square feet in size. The exact amount in rent someone will pay for a unit of this size depends on the number of bedrooms.
Studio apartments rent for an average of $1,125. Demand for these units is down 12% from this time last year. Investors should look elsewhere if they want to get the best return.
One-bedroom and two-bedroom rental unit prices have remained much more steady. The average one-bedroom apartment goes for $1,304 right now. The average two-bedroom rents for $1,590.
Average Rent by Area
According to Rent Cafe, the Fourth Ward and Downtown Houston are the most expensive neighborhoods in Houston. The average rental property in these areas goes for $2,200 and $2,153 per month, respectively.
South Park and Heather Glen are more affordable areas. The average renter in these markets pays only $727 and $856 per month, respectively.
Investors may think it is a better idea to invest in higher-rent areas, but there is more demand for affordable units. The majority of Houston apartments rent for $1,001–$1,500. 42% of renters live in a unit within this price range.
How Much Should You Charge for Rent in Houston?
The amount you should charge for Houston rent depends on your mortgage. Ideally, you want the monthly rent payments to cover your mortgage payments, as well as any additional monthly costs (e.g., maintenance).
However, you should not charge significantly more for the unit's size and location. There will not be as much demand for your property, risking the potential for costly vacancies.
For example, say you buy a one-bedroom apartment in Downtown Houston. The median rent for a one-bedroom in the area is $1,874. This is only a median, meaning some properties rent for less and others rent for more.
Need Help Managing Your Houston Investment Property?
Rent in Houston is relatively affordable compared to the rest of the state and the country. Smart investors can still make solid returns as long as they price and manage their rental properties effectively.
Are you looking for a full-service property management firm to oversee your Houston rental unit portfolio? Precision Realty & Management has served real estate owners in the area for more than thirty years.
Contact us today for a free quote to find out how much our services can save you.