Great News for Texas SFR Rental Investors

by Tim Herriage

Great News for Texas SFR Rental Investors

by Tim Herriage

by Tim Herriage

Q’2 2016 goes on record as the highest house sales volume Texas has ever experienced.
The Texas Quarterly Housing Report released by the Texas Association of Realtors details a A 4.4% increase over Q’2 2015 with 91,418 homes sold in 2016. This confirms continued demand for Texas housing. At this continued rate, Texas could end up representing about 9% of all U. S. home sales in 2016.
INVESTOR & STARTER PRICED HOMES
“Homes of all types and price classes are in high demand,” said Texas Association of Realtors chairman, Leslie Rouda Smith, “but this is especially true for homes priced under $200,000.”
This is the price point preferred by first-time home-buyers and investors. These are also the hardest to find unless you have help from trusted local “eyes and ears.” Homes under $200,000 were 45% of homes sold, with the next 47% of homes sold priced from $200,000 to $500,000.
HOUSE PRICE APPRECIATION FAVORS ALL, ESPECIALLY RENTAL INVESTORS 
Texas home prices increased Q’2 at an annualized rate of 7.5% to $215,000 due to strong population growth and low housing inventory, according to the TAR report. This compares with a national appreciation rate reported by CoreLogic for the same period of 6%.
Add this HPA to positive cash flow from an affordable rental house and the blended return to an investor grows significantly, if and when the investor wishes to sell.  Refinancing may allow you to recapture this equity value for use in expanding your portfolio.
HOUSING INVENTORY
Q’2 shows Texas remains a sellers market with tight inventory remaining at 3.7 months of inventory at the current sales rate. The Real Estate Center at Texas A&M University sets balanced inventory at between six and 6.5 month’s supply at the then current sales rate.
Unsaid in these reports is the fact that demand in all Texas markets are not the same. There is a smoothing effect on the data that slower less populous Texas markets have. Strong economies like the D/FW Metroplex continue to offer significant niche opportunities that real estate investors can leverage with the help of local experts. Contact us today or comment below to learn more about our real estate investment funds, and/or how we can help you.

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