Relocation Spotlight: Beth Wolff Realtors Real Living
When it comes to real estate investment opportunities, look no further than Houston.
Due to its relatively stable market, Houston has long drawn its share of investors. Combine that with the availability of properties that might have sustained some damage due to Hurricane Harvey, various purchasing opportunities exist that might have otherwise been unattainable for many home buyers.
This is the belief of Ed Wolff, president of Beth Wolff Realtors Real Living. During a recent interview, he discussed what people need to consider when investing in the Houston real estate market today.
Following are excerpts from our conversation:
MS: What makes Houston an attractive market for investors?
EW: Houston has always been a very stable market over the long term, and the increases in property values have been consistent. We have never had huge swings in property values, unlike places like Florida or California.
So, for somebody who is looking for a place to put capital that will earn a return on that investment, and the property will appreciate over time, Houston has always been a very good, solid, stable market.
MS: Are there opportunities that exist for relocation home buyers as a result of the lingering affects of Hurricane Harvey?
EW: I think that as long as a buyer can wait out what would be considered difficult times, that they will come out even better on the back end. Right now, there are a lot of people who have come here and bought properties with values that would not have been achievable if not for the negative event that we had with Hurricane Harvey.
So, if I was an expat being moved overseas, but I knew I was coming back to Houston in three years, I might look at acquiring a lot or a livable lot today, because the value of the dirt in the areas that were affected by the flooding is probably 30 to 35 percent or more under what the anticipated value would be in the future.
MS: So, those homebuyers would have to be willing to ride out the market?
EW: They need to be in a position where they can afford to hold onto the property for a period of time.
There is a classification of people who call themselves investors, and buy properties with no money down, but they aren’t really investors, they are borrowers.
MS: Then, how do you define a real estate investor as opposed to the typical home buyer?
EW: In my mind, an investor is somebody who is putting a minimum of 20 or 30 percent of their capital into a property and is expecting a return on that investment. That could be a short-term return, which would mean modifying the property to enhance its value, and then reselling it within six months or a year.
The other type of investor is somebody who is putting the same amount of capital into a property, but is looking for a return over time, whether that be rental income or some other form of income strictly because of the appreciation in value. That’s a different set of circumstances and concept.
MS: Are there particular areas or neighborhoods that stand out to you as good investment opportunities?
EW: I think there are investment opportunities everywhere in Houston. A lot depends on the amount of capital and capability that a person has, which will dictate the value of the investment. So, if someone has $30,000 and the recommendation is to have 20 or 30 percent minimum capital available to put down, then they could look at $100,000 properties.
MS: How does the lack of zoning in Houston impact real estate investment opportunities?
EW: You never know what you are going to get in Houston, and no zoning means that you have the ability to buy something at one value based on its current use, and if you have enough vision to see another use for it, that could increase its investment return immediately. For example, a house that could serve as a law office, might only lease for $2,000 a month as a house, but as a law office, it might lease for $4,500 a month.
So, Houston is a unique opportunity in the sense that without zoning we can create higher value than what the property’s current use is today.
MS: Is there anything else that people should consider when investing in Houston real estate?
EW: Houston is a complicated market for investors, so people need to be careful, and they need to work a Realtor who is knowledgeable, an expert, and is capable of helping them understand the literal landscape — politically, figuratively and so on — of where it is that they are purchasing.
Michelle Sandlin is an award-winning writer, journalist and global mobility industry expert. Follow her on Facebook: www.facebook.com/TheMichelleSandlin and on Twitter: @MichelleSandlin. Also visit “On the Move” at blog.chron.com/onthemove.