Buying inside the loop

[geniejessie]

Alright everyone, I need your opinions/experience & answers on my questions here. My husband, 1 year old daughter & myself live by the Galleria area. We've been renting an apartment for I don't know how long & only recently we've decided this might be the right time to buy a house since everybody seems to be looking for & buying houses these days. but honestly I keep wondering to myself, is this the right time or should we wait a little more as the prices might go down even more?!

Now my DH is working for a multinational so we might/might not get a transfer anytime soon. So whatever townhouse or Single family we're looking for we might be selling after 2 years from now. it all depends. So according to this, we decided that the best area for us would be inside the loop. We've been considering the Rice Military as our primary option since we really like the streets & houses over there. It seems to be occupied by young couple & professionals who just had their first baby or not yet. So we thought this is best area for a first time home buyer! are we on the right track? we are really getting confused with seeing too many people moving out to the suburbs instead & buying really big houses with really big backyards but nothing exciting about their neighborhood nor their own place! we still think the city is where we belong not the suburbs.

So I need your help here to tell me your take on this particular area. Feagan street for example? what do you guys think of that street & all the neighboring streets as well? we've seen a few houses there but we were surprised to see some of them even though they are built by the same builder & in the same block yet have different price Tags. what's the deal with that? should we worry? WHat's the deal with school district too?? Is there any good school around this area? Safety -wise, has anyone experienced or heard of crimes going on there? Finally, how many years will it take for a house in this area to appreciate the price. Not necisseraily Feagan but all the neighbouring street that are 80% developed 20% in transition? Also, if you recommend certain street that we should go & take a look at that would be great too.

I know this is such a long post, but i was speaking my mind out instead of in:))

Thanks for your help anyways

[TheNiche]

If you do not think that you'll be here in two years, then you need to be a renter. Closing costs and the nature of amortization never bode well for short-term owners.

[sidegate]

Yeah, renting gives you the advantage of getting into the catchment area of the decent schools in the Inner Loop, as well as getting into an interesting, relatively safe neighbourhood, without paying through the nose for the privileges. Although with a one year old, I don't see how school is going to be a consideration for quite a long time for you....?

[geniejessie]

Yeah, renting gives you the advantage of getting into the catchment area of the decent schools in the Inner Loop, as well as getting into an interesting, relatively safe neighbourhood, without paying through the nose for the privileges. Although with a one year old, I don't see how school is going to be a consideration for quite a long time for you....?

Well, but if I want to resell the house, then i believe the school district might play in my advantage. So how easy is to rent out a town house in that area?

Well, but if I want to resell the house, then i believe the school district might play in my advantage. So how easy is to rent out a town house in that area?

And by rent out i mean me renting out my just-bought-house in case i have to relocate for a period of time

[TheNiche]

Well, but if I want to resell the house, then i believe the school district might play in my advantage. So how easy is to rent out a town house in that area?

But if you want to buy, then the schools aren't in your favor. It nets out as a neutral issue.

As for renting a townhome as an absentee landlord, expect to pay up to 10% of each month's rent to a management company and be sure that you can budget for three months in a stretch of paying for the mortgage, insurance, and property taxes.

[Gooch]

It sounds like you don't now what you want, or where you will be. (Note: that's just the best interpretation I can make based on a forum post). It's going to be almost impossible for anyone to tell you if you will be happy with a property if you're desires are not nailed down very specifically. That may be a reason you are having a hard time choosing a location.

Given that your future may include a relocation in the near-term, and doubts about the type of property you desire, I'd be hesitant to purchase an illequid asset like real estate. Too many bad possible outcomes from not being able to sell at the right time, recovery of your sunk expenses as Niche pointed out.

Renting out isn't as easy as it sounds. After renting out a property, you will think that landlords are the most underpaid people on earth. It really is a lot of effort for little or no money. Remember that leases go both ways. You may have a pain-in-the-rear tennent that calls at 3am once a week to complain about some minor problem and pays late. But, you're stuck with them for the balance of the lease. You can pay someone to manage these things, but it isn't cheap - for good cause. If your agent doesn't stay on top of things... you'll have to deal with revolving lesees that don't stay past the mininum on the lease. You have to be float the unoccupied time between tennents. One thing Niche didn't mention is make-ready costs, between tennents. These can be significant as well. Figure at least painting and new carpet each time; if you're lucky.

My advice: know the lifestyle you are going to be living, then select your housing appropriately. There is nothing wrong with renting. It isn't necessarily 'throwing money away'. The first two years a mortgage is mostly interest anyway. You'll likely find that rent isnt' much more than taxes and interest for those first two years. You can give it away to the bank and the taxman; or the landlord. What's the difference?

[longhornguy]

That's a nice area that is obviously growing pretty quickly.

The schools are not very good though, especially the elementary school zoned to that area (Memorial Elementary). It may be in 5 years, but for now, the school is populated with Hispanic kids that are under welfare circumstances (I looked the stats up on google, can't remember the website). Ironic, as it's across the street from $500k+ townhomes in Camp Logan, but I digress...

The closer you get to Memorial and Kirby, the nicer and pricier the neighborhood will be. North of Washington is probably about the 80/20 development you mention, maybe even 70/30. East of Shepherd expect that number to be closer to 50/50 or 40/60.

The area is relatively safe, but there are bums and illegals proliferating Shepherd and Washington area, so just keep that in mind to be careful.

Another factor you may want to consider is parking, especially with the booming nightlife scene, you may find random people parking in front of your house/townhouse.

Great area to get a bicycle and walk to Memorial Park, no place in Houston like that (minus River Oaks).

Appreciation-wise, don't expect much, as most of the appreciation has already happened. Selling may not be as easy, since these are mostly townhomes, not single families. I would imagine that renting shouldn't be too difficult to pull off though.

Good Luck

[margokorin]

From what I undestand the main difference with the prices in the neighborhood have to do with the highschools that are zoned. Everything east on shepard goes to Reagan and west of shepard is zoned to Lamar. Seeing that you arent going to be around long enough to worry about highschools I dont forsee that being a problem. Lots of the town homes in the area have been on the market for a long time. Do you homework about your builders. I have lived in the area for almost 5 years now and love it. No crime for us personally, but I know a few folks who have had thier cars broken in to at night. My advice would be to stay far away form Washington bc the parking at night sucks.

[geniejessie]

Thanks margokorin & lhg. that's very informative.

Yes about the builders, some townhouses never mention the builders of them. is this something to worry about? & a builder like Morgan residential Inc do you know anything about the quality of their homes?

From what I undestand the main difference with the prices in the neighborhood have to do with the highschools that are zoned. Everything east on shepard goes to Reagan and west of shepard is zoned to Lamar. Seeing that you arent going to be around long enough to worry about highschools I dont forsee that being a problem. Lots of the town homes in the area have been on the market for a long time. Do you homework about your builders. I have lived in the area for almost 5 years now and love it. No crime for us personally, but I know a few folks who have had thier cars broken in to at night. My advice would be to stay far away form Washington bc the parking at night sucks.

[missmsry]

If you want to buy inside the loop, look south of Buffalo Bayou and west of Montrose. Better schools.

But if you anticipate a transfer, keep renting.

[sowanome]

We were in a similar situation a few years ago when we purchased a t.home just north of Feagan Street in 2006 . Things changed and we had to relocate at the end of 2007 and began leasing the place out at that point for a 15% profit. So far, it's been a great investment and rents have increased dramatically over the past few years in that area.

Here are some helpful hints (if purchasing):

1) If possible, put a down payment of at least 15 - 20% (This way, it's a win/win as a homeowner or a future landlord based on rents in the area)

2) Try to purchase a place with a private driveway and small (20 x 20) backyard (this combination is hard to find in that area, therefore they will always be in high demand = higher prop. values and rental price)

3) Property values in most of that area (surrounding Feagan street) are no longer at the bottom..It seems that they bottomed out last year.

4) We rented our place out in the $2300 range, last winter we could've gotten at least $2600 if our tenants didn't renew. Also, our place has appreciated more than 15% in less than 3yrs but a lot of that was in year 1...go figure

5) As far as the difference in price tags for the same property, generally from Feagan the closer you get to Washington ave or for each block north of Washington prices tend to decrease by 5 to 10% per 2 blocks b/c the area north of Washngton is still transitioning as everyone has mentioned...Seriously.

6) I can't really comment on the east/west of sheperd issue, b/c I always thought the area east of sheperd/south of washington was much quieter than the area west of sheperd.

Good luck

[EMME]

If you do not think that you'll be here in two years, then you need to be a renter. Closing costs and the nature of amortization never bode well for short-term owners.

I agree but there are exceptions. When my now ex-husband and I bought our house behind Empire Cafe in Montrose in Oct of 1999, we sold it in May of 2001 and we made a slight profit. Of course that was then.

[TheNiche]

I agree but there are exceptions. When my now ex-husband and I bought our house behind Empire Cafe in Montrose in Oct of 1999, we sold it in May of 2001 and we made a slight profit. Of course that was then.

Appreciation isn't an impossibility, but the outlook is sufficiently weak that I'd consider closing costs, interest expenses, and the possibility of high residential vacancy rates to be disqualifying factors.

[hoef]

I would urge you to also consider Southgate (near Rice U) .... Southgate neighborhood is defined by University Blvd, Greenbriar, Main St and Holcomb. You would be close to the Rice Village and very close to Roberts Elementary which has a great play yard setup for the neighborhood. There are many moms with recent babies and it is a true neighborhood were a lot of folks know each other with block parties and socials. Also a lot of expats, internationals, professors and doctors ......

[longhornguy]

With everything being said, there are negatives to the area and there are positives to the area. I do believe that if you make a decision to purchase in these area's we're talking about, you will enjoy it a lot.

Especially in this market, I've seen a LOT of townhomes unoccupied for quite a while, so you may be able to sign a 6 month lease with the owner to at least "try" out the area before you commit.

The easy access to Kicks, Mem Park and Buff Bayou Park were definitely the main draw for us. Even if you don't have a yard, it's nothing to take the kids/dogs out to the park to play.

[rbarz]

Now my DH is working for a multinational so we might/might not get a transfer anytime soon. So whatever townhouse or Single family we're looking for we might be selling after 2 years from now. it all depends. So according to this, we decided that the best area for us would be inside the loop. We've been considering the Rice Military as our primary option since we really like the streets & houses over there. It seems to be occupied by young couple & professionals who just had their first baby or not yet. So we thought this is best area for a first time home buyer! are we on the right track? we are really getting confused with seeing too many people moving out to the suburbs instead & buying really big houses with really big backyards but nothing exciting about their neighborhood nor their own place! we still think the city is where we belong not the suburbs.

Why not have it all? I think the best value inside the loop is in Timbergrove. Nice sized ranch style homes on large wooded lots, many with the same price tag as a townhouse or condo in Rice Military.

[toadfroggy]

If you're going to be reselling at some point, go single-family. A residential lot inside the loop will appreciate or hold its value much better than any structure that sits on it.

If, on the other hand, you like the idea of renting out, then a townhouse is probably a better idea.

[jm1fd]

Why not have it all? I think the best value inside the loop is in Timbergrove. Nice sized ranch style homes on large wooded lots, many with the same price tag as a townhouse or condo in Rice Military.

And if you act now, you can get one on a lot in the floodplain! Seriously....a crapload of Timbergrove is in the floodplain.

[RedScare]

The location also has to be far enough from the railroad tracks that my house doesn't shake. I'm over in Lazybrook north of W. 18th and I can still hear that stupid train that is further back towards I-10. I can't imagine anyone buying the townhomes over on Heights Blvd. south of I-10 across from Hickory Hollow. They are right on the tracks. Besides the noise, if that thing ever derails they are screwed.

Seems like the trains on Hempstead and on 34th would be a bigger issue for you than the track on Center Street. Both of those are far closer.

[sidegate]

I would urge you to also consider Southgate (near Rice U) .... Southgate neighborhood is defined by University Blvd, Greenbriar, Main St and Holcomb. You would be close to the Rice Village and very close to Roberts Elementary which has a great play yard setup for the neighborhood. There are many moms with recent babies and it is a true neighborhood were a lot of folks know each other with block parties and socials. Also a lot of expats, internationals, professors and doctors ......

Relatively pricey though compared to the area she originally asked about and while certainly pleasant enough, not what I'd call a hip neighbourhood.

[lcc179]

If you're going to be reselling at some point, go single-family. A residential lot inside the loop will appreciate or hold its value much better than any structure that sits on it.

If, on the other hand, you like the idea of renting out, then a townhouse is probably a better idea.

Just curious, I know that a freestanding home is considered single-family and a townhouse has shared walls. But do yall consider those houses that are freestanding in Rice Military on 2500 sq ft lots but are literally 3-4 feet apart Single Family?

[sowanome]

But do yall consider those houses that are freestanding in Rice Military on 2500 sq ft lots but are literally 3-4 feet apart Single Family?

Yep, they are single family.

[hoef]

Relatively pricey though compared to the area she originally asked about and while certainly pleasant enough, not what I'd call a hip neighbourhood.

Hip wasn't listed as a requirement and with a one year old being hip might be the last thing on you mind. You can't beat the hipness of the Europeans in our neighborhood anyway ;-)

[KinkaidAlum]

Southgate and the other hoods on the other side of Greenbriar are really great. Lots of older homes, duplexes, and older apartments with character. You can walk to Rice Village and are a quick trip away from all of the staples on Holcombe (Randalls, Rice, etc...). Additionally, with a one year old, you are also literally right next door to the Zoo and Hermann Park. Plus, while pricey, the area is a lot less expensive than the other side of the Rice Campus (Southampton).

[sidegate]

Hip wasn't listed as a requirement and with a one year old being hip might be the last thing on you mind. You can't beat the hipness of the Europeans in our neighborhood anyway ;-)

As a European I would agree. But I get the impression she's looking for something other than Southgate.

[geniejessie]

Well, thanks all for sharing your opinions with me so far. please keep them coming, need to read more views about all the good areas, esp that some of you are mentioning areas my DH & I never considered before. Not anything but just cuz we never drove by these areas ( southgate, southhampton, timbergrove...etc) before to look for houses. I think we will drive by sometime this week to observe the areas.

[Arivechi]

someone mentioned it above but be sure you check the flood zone maps.

http://maps2.tsarp.org/tsarp/

it's always good to have as much information as possible. I would guess that in areas that have had significant development in the last couple years (like areas with lots `o new town homes) the drainage patterns may have been affected - for the better (if the builder paid attention to drains) or worse. Ask the neighbors how much water collected in their yards/streets.

[rbarz]

And if you act now, you can get one on a lot in the floodplain! Seriously....a crapload of Timbergrove is in the floodplain.

I am not sure what a "crapload" is but I am guessing that if you looked at a map of Houston you would notice that a "crapload" of it is located in the floodplain. Check out the TSARP Map

I would guess that 25% or less of Timbergrove is in the 100 yr or 500 yr floodplain. While areas like Bellaire are closer to 75%.

[longhornguy]

Wow, I would have never guessed West U was in a floodplain, I don't really recall much water around the area at all (Braes Bayou, but that's pretty far south)

[EMME]

Wow, I would have never guessed West U was in a floodplain, I don't really recall much water around the area at all (Braes Bayou, but that's pretty far south)

From NOAA http://forecast.weather.gov/glossary.php?letter=number

100-year Flood A statistic that indicates the magnitude of flood which can be expected to occur on average with a frequency of once every 100 years at a given point or reach on a river. The 100-year flood is usually developed from a statistical distribution that is based on historical floods. This is also called a base flood. 100-year Flood Plain The flood plain that would be inundated in the event of a 100-year flood.