How to Buy Houston Real Estate Investment Property in 2024
Thinking of buying an investment property in Houston? It’s not a bad thought. With the city’s population growing steadily, fueled by both domestic and international migration, housing demand remains strong. In the Urban Land Institute's (ULI) 2025 Emerging Trends in Real Estate report, Houston ranked third out of 81 markets in the United States and Canada
The city’s affordability, ample job opportunities, and cultural diversity make it an attractive destination for people seeking better opportunities and a higher standard of living. Houston boasts a diverse and robust economy, primarily driven by industries such as energy, healthcare, aerospace, manufacturing, and technology.
Despite being a major metropolitan area, Houston’s real estate market remains relatively affordable compared to many other large cities in the United States. The potential for property appreciation coupled with affordable housing options makes it an attractive prospect for investors seeking long-term growth. To top it off, multiple Fortune 500 companies are moving their headquarters to Houston, bringing thousands of jobs with them.
The city has a bright future, but before snatching up a piece of real estate, it’s important to understand the overall market.
In this guide about how to buy Houston investment property, we’ll look at:
Important Houston real estate investment market trends for 2025.
Hot neighborhoods and towns to look for investment opportunities.
Tips for finding and financing an investment property in Houston.
Let’s jump in.
Houston is a sprawling city, with plenty of suburbs and affordable housing stock
Why invest in Houston real estate?
As of 2023, Houston boasts a population of 2,314,157, making it the fourth-largest city in the United States, following New York City, Los Angeles, and Chicago.
This growth shows no signs of stopping. Cushman & Wakefield estimate the metro area’s population will grow by over 1.2 million from 2020 to 2029. At this rate, Houston would have the second-highest number of new residents in the nation for the second decade in a row.
New residents will compete for Houston’s real estate — which is already in short supply — pushing up rents and home values.
And people aren’t the only ones moving to Houston. Large companies continue streaming into Houston’s exploding business hub.
Houston ranks third among US metro areas with the most Fortune 500 company headquarters totalling 24 as of 2024 with Chevron announcing its move to Houston at the end of 2024.
Each company that moves to Houston brings in new residents, creates new jobs, and bolsters the economy.
Nearby Galveston draws tourists from all over Texas and is a popular STR market for investors
Houston real estate market trends
As per HAR’s November 2024 report, Houston’s real estate market continues to demonstrate resilience and adaptability. In September 2024, single-family home sales increased by 1.7% year-over-year, with 6,973 units sold. The median home price rose slightly to $335,000, while the average price held steady at $415,435. Active listings surged by 28.1% compared to the previous year, providing a total of 30,617 single-family homes available for sale.
Meanwhile, the average days on market increased from 45 to 51, signaling a marginally slower pace of sales.
These trends indicate a balanced market that offers opportunities for both buyers and sellers. The significant growth in active listings gives buyers more options, while steady pricing supports seller confidence. For real estate investors, the combination of stable prices and a growing inventory highlights Houston’s potential as a market for long-term value and strategic investments.
The Houston Heights is one of the hottest neighborhoods, characterized by Victorian and Craftsman styles
Hot neighborhoods for Houston investment properties
The Heights
The Heights is a historic neighborhood known for its charm, tree-lined streets, and eclectic mix of homes, including restored bungalows, Craftsman-style homes, and modern townhomes. It's a hotspot for young professionals and families due to its proximity to downtown Houston and its walkable atmosphere with restaurants, boutiques, and parks.
Why Investors Should Consider The Heights:
Strong Demand: Its character and proximity to central Houston attract both buyers and renters. Single-family homes and duplexes in The Heights are in high demand.
Value-Add Potential: Investors can renovate older homes to capture significant appreciation. The neighborhood is known for flips with high ROI.
Short-Term Rentals: Its unique charm and location make it ideal for Airbnb or vacation rental investors, especially given Houston's flexible short-term rental regulations.
According to Redfin, the median sale price of a home in Greater Heights was $645,000 as of November 2024, down 0.39% since last year but when considering the median sale price per square foot, it is at $330, up 8.9% since 2023.
Spring
Spring is a suburban area located about 20 miles north of downtown Houston. It’s known for its family-friendly atmosphere, highly rated schools, and master-planned communities. The area offers a mix of affordable single-family homes, new construction, and opportunities for value-add investment properties.
The town will serve as the new headquarters for both Hewlett Packard and ExxonMobile — the 10th largest company in the nation. ExxonMobile already houses over 10,000 employees in their Spring campus, and the headquarters migration will bring even more.
As these companies move in, money flows into the local economy, employees compete for housing, and real estate investors benefit.
It’s already happening. According to Zumper’s Houston Metro Report, Spring saw the largest month-over-month increase with rent increasing 4.3%.
Why Investors Should Consider Spring:
Affordability: Spring offers lower entry prices compared to inner-city neighborhoods like Montrose or The Heights. This makes it attractive for investors looking for long-term rental properties.
Strong Rental Market: The area is popular with families and professionals working in The Woodlands or downtown Houston who prefer suburban living. Single-family homes for rent are in high demand.
Population Growth: With continued growth in the northern Houston suburbs, Spring sees increasing demand for housing, driving appreciation and rental potential.
Large Tenant Pool: Spring attracts tenants who want access to good schools, parks, and community amenities like pools and recreational centers, making it ideal for buy-and-hold investors.
Proximity to Major Employers: The area benefits from its proximity to The Woodlands, a major business hub, as well as ExxonMobil’s massive campus and other corporate offices.
Investment Opportunities in Spring:
Single-Family Rentals: With many families choosing to rent rather than buy, Spring offers consistent rental income opportunities.
Fix-and-Flip Projects: While less common than in inner-city neighborhoods, older properties in established areas of Spring can be renovated and sold at a profit.
New Construction Rentals: Many investors purchase newly built homes in Spring’s master-planned communities to attract higher-quality tenants at premium rents.
Downtown Houston is the city’s bustling urban core, home to major corporate headquarters, the Theater District, Minute Maid Park, and a growing residential population.
Downtown Houston isn’t your ordinary downtown. It’s not all commercial real estate and exorbitantly expensive condos — at least not yet.
In fact, downtown Houston’s up-and-coming residential market has doubled over the past few years, with new condo developments targeting both high-end and mid-range residents.
Approximately 70% of the residential area is renter-occupied, making it another prime location for rental property. Recent years have seen a shift toward residential living, with luxury apartments, condos, and high-rise developments emerging.
Why Investors Should Consider Downtown Houston:
Luxury Rental Market: High-income professionals working downtown often seek luxury rentals close to work.
Short-Term Rental Potential: With conventions, sporting events, and tourism, downtown properties are prime candidates for short-term rental platforms like Airbnb.
Proximity to Jobs: The central business district ensures a steady pool of tenants, especially in luxury and high-rise properties.
Urban Living Appeal: Increasing numbers of young professionals and empty nesters are moving downtown for the convenience and walkability.
Greater Third Ward
Greater Third Ward is a historic district located just southeast of downtown, with proximity to major institutions like Texas Southern University (TSU) and the University of Houston (UH).
The University of Houston is the third-largest university in Texas, and with over 45,000 students, there’s no shortage in rental demand.
There are many new developments in the area driving up prices, which have unfortunately led to gentrification issues. According to Redfin, the median sale price for homes in Greater Third Ward was $399,000 in December 2024, up 2.4% since last year.
Why Investors Should Consider the Greater Third Ward:
Appreciation Potential: The neighborhood is undergoing gentrification, with rising property values as developers and investors revitalize the area.
Rental Demand: Proximity to TSU and UH ensures a steady demand for student housing, single-family rentals, and affordable multi-family units.
Cultural and Community Appeal: The area’s rich history and unique character attract tenants and buyers looking for authenticity and a sense of community.
Value-Add Opportunities: Many older homes are in need of renovation, offering significant potential for fix-and-flip projects or cash-flowing rental properties.
The Woodlands
The Woodlands Waterway in The Woodlands, Texas
Located about 30 miles north of Houston, The Woodlands is a master-planned community known for its upscale lifestyle, excellent schools, and abundant green spaces. It features high-end residential properties, corporate headquarters, and a vibrant town center with shopping, dining, and entertainment.
According to Redfin, The Woodlands housing market remains highly competitive. On average, homes in The Woodlands attract three offers and sell within approximately 22 days. Last month, the median sale price for a home reached $565,000, reflecting a 6.7% increase compared to the same time last year.
Investment Opportunities in The Woodlands:
Luxury Rentals: High-income professionals working in The Woodlands’ business hubs create demand for upscale rental homes and townhouses.
Long-Term Appreciation: The Woodlands has consistently shown steady home price appreciation due to its desirability and limited expansion potential.
Short-Term Rentals: Proximity to The Cynthia Woods Mitchell Pavilion and major events makes it suitable for short-term rental investments.
Buy-and-Hold: Families moving to the area for schools and quality of life ensure stable rental income for single-family homes.
Katy
The Houston Katy Freeway
Situated west of Houston, Katy is renowned for its family-friendly communities, top-rated schools in the Katy Independent School District, and a growing population. The area includes a mix of established neighborhoods and new master-planned developments.
According to Redfin, the median sale price of a home in Katy was $370,000 last November 2024, up 1.4% since last year.
Investment Opportunities in Katy:
Single-Family Rentals: Katy’s appeal to families creates consistent demand for rental properties in safe, school-oriented neighborhoods.
New Construction: Rapid development offers opportunities to invest in new homes for long-term rental or resale.
Buy-and-Hold for Appreciation: As Katy continues to grow, property values are expected to increase, especially near new developments and amenities.
Fix-and-Flip: Older homes in established parts of Katy can be renovated for resale in a competitive market.
Sugar Land
Located southwest of Houston, Sugar Land is an affluent suburb with a reputation for excellent schools, planned communities, and a thriving economy driven by corporate offices and healthcare facilities. It is known for high-end properties, retail centers, and cultural attractions.
Why Real Estate Investors Should Look into Sugar Land:
Upscale Rentals: Sugar Land attracts professionals and families seeking luxury homes in safe, well-maintained neighborhoods.
Long-Term Rental Stability: With its strong economy and family-oriented environment, Sugar Land is ideal for buy-and-hold investments.
Value Appreciation: Properties in Sugar Land maintain strong appreciation due to the area’s affluence and limited land for expansion.
Fix-and-Flip: Renovating older homes in high-demand neighborhoods can yield strong returns.
Pearland
Located south of Houston, Pearland is one of the fastest-growing suburbs in Texas, known for its affordable housing, proximity to the Texas Medical Center, and a blend of suburban and urban amenities. It attracts families, professionals, and medical workers due to its convenient location and growing infrastructure.
Investment Opportunities in Pearland:
Affordable Entry Point: Compared to other suburbs like Sugar Land or The Woodlands, Pearland offers more affordable homes with good appreciation potential.
High Rental Demand: Medical professionals and families drive demand for single-family rentals and townhouses.
New Developments: Master-planned communities and mixed-use developments provide opportunities for both rentals and flips.
Multi-Family Properties: Growing population and affordability make Pearland a solid option for investing in duplexes or small apartment buildings.
Conroe
Located about 40 miles north of Houston, Conroe is a rapidly growing area known for its proximity to Lake Conroe, outdoor recreation, and affordable housing. Conroe’s growth is fueled by the expanding Houston metro area and spillover from The Woodlands.
Investment Opportunities in Conroe:
Lakefront Properties: Homes near Lake Conroe are highly desirable for vacation rentals or second homes, offering strong short-term rental potential.
Affordable Housing Market: Lower home prices make Conroe an attractive entry point for first-time investors.
Buy-and-Hold: The area’s growth trajectory indicates strong potential for appreciation and rental demand.
New Construction Rentals: Rapid residential development creates opportunities for investing in new homes to rent or sell.
How to buy an investment property in Houston, Texas
The process for investing in Houston real estate can be broken into five steps:
Are you looking for a single-family home, or do you want multiple units? Do you have time to work on the property yourself? Or would you prefer a turnkey investment?
With the current shortage of sub-$500,000 houses, now is an envious time to be a landlord. But Houston has lucrative fix and flip opportunities as well. At Longleaf, one of our customers flipped a house in Houston for over $110,000 profit — all within four short months. .
2. Plan Your Financing
Planning is key when it comes to buying investment property in Houston. The best opportunities don’t stay on the market for long, so you need to know how you’ll finance a project before you find it.
You have three main options:
Conventional loan. Banks and conventional lenders usually offer the lowest rates, but only if you qualify. Many investment properties do not meet bank requirements. And even when they do, it can take months to secure funding.
Hard money loan. Private lenders offer fast-closing hard money loans specifically for real estate investors. They evaluate loans based on a property’s investment potential, focusing less on your personal financial history.
Joint venture. Once you have a successful track record, you may be able to finance your project by pooling together funds from multiple investors.
Since hard money loans can finance your project in a matter of days, they are usually the best option for investing in a competitive market.
Whichever method you choose, build your relationships ahead of time. That way, you can pounce on opportunities that arise.
3. Search for Properties
Many of the best Houston investment properties never make it to sites like Zillow or Trulia. To find them, you need connections.
Choose the neighborhood you’re most interested in, then connect with wholesalers and agents who specialize in that area. Since they constantly have their ear to the ground, they may be able to help you find off-market opportunities.
When comparing investment options, make sure to consider:
Vacancy rates
Job and population growth
Future development projects
Housing and rental price trends in the area
Percentage of renter- vs. owner-occupied homes
Armed with this data, you can calculate the estimated ROI for your project — something a hard money lender will certainly want to see.
4. Secure Financing
If you meet bank requirements, don’t mind piles of paperwork, and aren’t in a hurry, a conventional mortgage is the way to go. Underwriting can take 30 to 45 days, so make sure to start the process immediately.
If time is of the essence, a hard money lender can finance your project faster. At Longleaf, rental loans take as little as two weeks, and short-term residential loans (AKA bridge loans) can close in 48 hours.
5. Refinance (if necessary)
Bridge loans allow you to close as fast as possible, but you’ll need to refinance within 6 to 24 months.
You can refinance into a traditional mortgage if you qualify. If not, you can roll your bridge loan into a long-term rental loan. These loans are similar to bank mortgages, but more flexible.
At Longleaf, we can save you fees by bundling your bridge loan together with your refinance.
Need financing for a Houston investment property?
Longleaf Lending is a Texas-based private lender and offers flexible loan programs designed for property investors who need to close as fast as possible. If you have any questions about Houston investment property financing, give us a shout at 979-200-2823 or info@longleaflending.com.
Instantly evaluate your next project
Use our real estate loan calculator and assess your next project - it only takes 30 seconds.
