Galveston, Texas?

Question

I'm looking at all the foreclosures in Galveston and the very cheap prices and wondering.

It's beach property. It's very cheap. Is it worth the time and expense for me to fly down there and stay for a month or two and pick out a few parcels for myself to purchase?

Are the $20,000 properties salvageable, or are they tear-downs? Are there slum areas to stay away from? Is the weather tolerable?

Are there tenants? If not, is there a market for vacation rentals?

Anyone from Texas want to share information, please?

Jon Holdman · Answer

I can't answer all your questions, but we lived in Houston for 13 years and made many trips to Galveston.    Its possible some of the laws and regulations have changed.

Is the weather tolerable.  That depends on your tolerance.  Its very hot, very humid, and there are bugs that will cart off dogs and small children.  Near the beach it will be breezy, so its not as bad as further inland.  Its never really cool, and will be hot even in the middle of the night.  It rarely gets very cold.

There are beaches all along Galveston Island, except in the seawall area on the east end.  The rest of the island is basically one big beach.  These are not white sand beaches.  Yellowish sand, pretty fine.  The water and beach tend to be pretty dirty.  That's because the outflow from the Mississippi River runs south along the cost and so you have all the silt from the river, and all the smaller rivers between there and the Mississippi. The water tends to have a chemical taste and smell.  Tarballs, which are really more like globs of heavy oil, are a real problem.  You can expect your feet to be splotchy from tar.

None of this makes it horrible. Its just that if you comparison is Santa Monica or Siesta Key in FL, you'll be disappointed.

The upside is you can drive on the beaches.  So we would drive out on the beach, find a good spot, set up some tarps for shade and start knocking back the cool ones. Its probably not legal to be drinking on the public property, but I don't recall ever being hassled or hearing of anyone else being hassled.  Sheriff's do patrol, so they drive by every now and then.

The area between the water line and the vegetation line is public property.  When a hurricane hits, these two lines tend to move back.  Beachfront property has a way of ending up on the wrong side of the vegetation line. When that happens, it reverts to the state.  Presumably your insurance would pay for your loss.

If you're talking about "beach property" I'd guess you're talking about the stilt houses west of the seawall.  For $20K, they must be in pretty rough shape.  Anything along here is going to be maintenance intensive.  But for $20K, I'd be pretty tempted.  I just might have to check into this.

Account Closed · Answer

Jon, thanks for the generous information. It is very helpful.

All I know about Texas is that you can get a good steak in Amarillo, where I've driven through several times. Other than that, I've changed planes in Dallas Airport.

I was looking at a foreclosure site, which only gives a blurry photo and a google map pin location. To me, if it is walking distance of the beach, it is beach property, and there is a big cluster of foreclosures within a block or two of the beach (or so it looks on the map).

Lots of little roads mean they are little properties. Other than that, I know nothing.

The nice beach houses, right on the beach are more like 200k-300k, which is comparable to a nice beach house in Oregon, where I would prefer to invest..

I don't even know if the posted price is what is owed or what the bank is asking.

It just caught my interest and I'm trying to decide is it is worth my time to investigate in depth. My thought being that between the hurricane damage and the real estate crash, there might be some good deals to be had.

Jon Holdman · Answer

I'm not seeing anything there for those kind of prices except in the downtown area.  And those are heavily damaged ones.  Those are not beach properties, though they're not far from the ocean.  I'd be curious what you seeing thats near the beach and only $20K.

Jon Klaus · Answer

This is a good time to buy in Galveston, IMO.  The city itself (not beach) is pretty depressed, band you can cash flow pretty well.  Some rough neighborhoods, though.

Jon has covered the beach pretty well, but I will add that when island got hammered by hurricane Ike last year, the timing was terrible with the real estate downturn  (2nd homes, vacation homes, etc).  Or it is good news if you are buying now.

Yeah, the beaches aren't nice, but it is so close to major metro areas, that there is consistent vacation demand.    Plus, it's the largest cruise ship terminal in the area.  I'm intrigued by Galveston, too.