Houston rental market slow?

[Ray Huang]

Hi, 

I am a new member of BP. I recently bought a new rental property at Houston TX. It has been one month and the real estate agent still cannot rent it out. I am out of town so I have to use a local agent. The price is suggested by the agent and I think it is reasonable based on my online search. My question is whether this is normal or is Houston seeing a slow rental market? 

Thanks.

Ray 

[Brandon Turner]

Hey @Ray Huang welcome to BiggerPockets! I suggest you setup keyword alerts and get into your local market meetups of real estate investors (or just search the site for your local forums). This way you get to understand and get to ask people in the market. 

[Petra M.]

If it's not renting, it's a price issue.  Better to lower price and get a tenant than leaving it vacant IMO.

[Scott Mclaren]

I have had 2 single family houses for about 9 years. They have been strong with annual rent increases up until now. Just had to evict and now lower rent a little bit. Maybe a symptom of oil industry slowdown I don't know. I use AIM property management, Big outfit, fairly satisfied . 

[Randall Jacobs]

Yeah, I  have 2 vacant right now and just rented one.  Up until now,  mine have been renting in 1-5 days. This last one took almost 30 days. Things are slowly down a bit.  I  have never had much luck with RE agents.  OP , you probably ought to seek out a property manager. 

Randy 

[Mark B.]

Where in Houston is it? I know a lot of the oil companies have been having cuts which could be hurting your rentals (like @Scott Mclaren mentioned).  When I was in Midtown though the rentals all seemed decently full

[Chuck Webb]

At the end of the day it all boils down to jobs and job growth.

[Kami S.]

I am no expert in rentals and RE but as others mentioned Oil and gas industry is a contributing factor.  I know people say that Houston is diversified with medical and IT related businesses and it is not comparable to 80's.  I am in oil an gas and over the past 15 years this is the worst I have seen, even 2008 was not as bad as now for oil and gas.  I would think that if you are focusing to buy income property you may want to focus on areas that have more diversified crowd.

[Trey Watson]

@Ray HuangNormal. 1 month is not something to worry about. If 1 month is the new redzone for people then we are all spoiled. It could be a little overpriced. 

[Chuck Webb]

The market will bear what it can bear...everything else is just noise..(get accurate comps in other words).

[Account Closed]

Have your agent take you to some cometitive rentals to see if there are differences between your property and theirs.  Udates, upgrades, etc. can make a differerence on which property renters choose.

[Rachel Pervis]

Hi @Ray Huang I would have the agent pull leased comps for the past 2 months to check the list price and I would review the differences in the comps.

[Fred Heller]

@Ray Huang  I personally am not seeing a slowdown. Every home I've listed for lease this year has rented in less than five days. I listed a home in Cypress last week for $2500. I was nervous about that one because the more expensive rentals take longer to rent. I listed it on Tuesday and had a qualified tenant apply on Wednesday. I completed the screening on Thursday. The owner accepted the application, and they moved in yesterday.

[Sharon Tzib]

Before you purchase a rental property, review the rental comps and see how long a home typically takes to rent in that neighborhood, so you'll know what is "normal." Ask your realtor if you are getting any apps at all. If you are, then you know you're priced right, it's just a matter of accepting a quality tenant (I reject lots of apps for my clients if they don't meet certain criteria). If you aren't getting any apps, or worse, showings, then you need to lower your price. 

[Ray Huang]

Wow, thanks a lot, I am a bit surprised I got so many helpful comments! My property is in Spring TX. Some good schools. I did have my agent pull a comp for the rental around, and then set the price. Seems like I will need to lower the price. 

Hopefully the oil industry is at its bottom now. 

Thanks again everyone! 

[Petra M.]

@Ray Huang  Did you buy it as a turnkey?

[Ray Huang]

@Petra M. No I did not buy as a turnkey. 

[Kent Harris]

I have 12 rental properties and 3 vacancies right now. I keep lowering the price to get activity. I advertise on Zillow and one house only got 3 views in the last 2 weeks. It should pickup in January. I have most of my leases expire in June except 3 people bailed before there leases were up. In my neighborhood we have $300,000 to $400,000 homes, nothing has leased in the last 18 months and only one house sold in the last 12 months. Normally a 3 bedroom for $1,250 a month would be leased out in a week, it's been a month and so far no takers.