Thoughts on investing in Navasota, Texas?

Question

I'm wondering if any folks in the Houston / College Station or maybe even Austin areas have any thoughts on whether it'd be a good idea to to buy SFRs in the small town of Navasota near CS. My parents (@Tom Knodt) and I are based in Brenham and are working on purchasing some rentals in Brenham first, but they've noticed what seem to be some potentially good foreclosure deals in Navasota. From what we know there aren't particularly great opportunities there right now (lower median income than Brenham, etc), but they've observed that growth from CS and Houston continues to expand that way and so some decent growth there seems probable as well.

I'm thinking if we can determine that the rental market is good enough to make our numbers work, it can't hurt to buy one or two properties there, but I'm curious whether other investors have thoughts or opinions about Navasota.

Thanks!

I'm thinking if we can determine that the rental market is good enough to make our numbers work, it can't hurt to buy one or two properties there, but I'm curious whether other investors have thoughts or opinions about Navasota.

Thanks!

Chris Quinn · Answer

I'm intrigued by the idea of investing in county seat towns. I know a few people doing this for long term holds, multifam rehabs to refi, etc. There's been a growing buzz around Anderson lately, although its not on Highway 6/290 traffic route from Houston, I currently think it will do better than say Navasota in the long run. Either way, South of B/CS, even as far as Hempstead is a much better idea than going North (if growth is what you're looking for.)

Mark Sewell · Answer

The NW side continues to push outward.  Eventually Aggieland will just blend into Houston, with a few semi-rural suburbs towns connecting them.  I think as we see more jobs/businesses relocating to areas right outside the 99 Grand Parkway up there, it will have a measurable effect on places like Anderson, Navasota, Waller, etc.

John Franklin · Answer

I’m a big fan of data driven analysis, but as some mentioned, the Harvey anomaly drives a fork into accurate extrapolation.

I love Grimes county but schools end up being an issue for many renters with kids.  Personally, I’d focus on the Montgomery/Magnolia market and make Anderson my north most point.

As for College Station, I measure the market health by Apartments and they are struggling to maintain occupancy at the expense of increasing concessions.  I anticipate continued flat to negative rent growth for 2 more years, min.  Ideal time for long term holders to invest but cash flow will suffer.

If you do opt for BFE rentals, I recommend properties where tenants can park an 18 wheeler or have horses and trailer without flack from city/HOA.  Those fetch a premium rent and stay leased.

Charley C. · Answer

Navasota is a good retirement home play but not a rental play of any sort. Rural in general is one strike. The closest city(s) B/CS was reported is very recently (in the the Realtor Magazine) as perhaps the most over built areas (literally) in the nation. The perpetually over built town is so very close. You might want to set your eyes on Brenham or even Waller (Waller is a very good sleeper) if you like small towns and and more rural settings.

Cody L. · Answer

***PERSONALLY*** and this is just me personally, I don't like properties that are (IMO) in BFE areas.  I think things in or near the city core will always see higher demand, and more upside.  I'd rather be an a "meh" area that was near a downtown or dense area than be in a clean suburb in no-where land.

Again, that's just me.   I make this argument with friends who all ran north to live in cheap burbs.  I hate having to visit them as the area is a depressing sea of bland beige strip malls filled with Outback Steak House and Subway.   I don't mind investing in 'scary' areas as part of me would rather be shot then live in a dull area.

Tom Knodt · Answer

Thanks, Bruce and Mark, my wife and I had similar thoughts about the growth of Houston and Bryan / College Station making Navasota have new possibilities in the future.   Plus Bruce's idea on speaking to the CofC was very good.

Ronald Rohde · Answer

It would be a long term hold, but I can see the gamble working out. There are some commercial and senior living developments in Navasota too.

Bruce Lynn · Answer

Seems like a cool town.  Just through there a couple of months ago.  I'd talk to the chamber there if you don't know.  Ask if city is growing, shrinking, or holding it's own.  Any new economic developments going to happen?   I'd stop by some realtor shops in the area as well and ask if there is enough rental housing?  What price ranges have shortages.   Also know who you target market is.   You want demand drivers....in that city or any city.

As prices skyrocket in Austin....are these cities close enough to get commuters from Austin or Houston or people that can work from home 2-3 days a week?

James De Stefano · Answer

Good discussion.  Wife and I got a nice quick tour of down town Navasota  on Sunday with the insane storms and rain rolling through. She had to pull off High 6 for safety. Fun!

From Mark's article,  I'm only 1 year into truly studying the Houston area, but IMO The Woodlands, Katy, and Sugar Land all have strong chances to be "bigger" and more valuable the Pittsburg.  They are self-sustaining monsters at this point,  and myself growing up in Sugar Land, it feels like it's own protective bubble out there.  Strong schools is such an anchor...

Charley C. · Answer

Growth from home buyers is not always the same as growth from renters. Primarily, we got 2 type  of renters in the rural area being discussed. People with Jobs (easy to predict)  or people retired (not as easy to predict)  Few people will pay to rent something more than 30 minutes form their job. Most retired people want to be near their doctors,  amenities, conveniences and their grand kids.  If you want to pioneer in to a new area, make sure it meets that criteria along with the rent comps (if any)

Thoughts on investing in Navasota, Texas?

Most Popular Reply