Getting StartedQuestion 10
How Do I Analyze a Houston Rental Property Deal?
Run a full cash flow analysis including purchase price, rental income, mortgage payment, property taxes, insurance, maintenance, vacancy, and property management costs.
A proper deal analysis goes beyond the 1% rule. Here's the framework Houston investors use.
- Gross rental income: Research comparable rents on Zillow, Rentometer, or ask a local property manager.
- Vacancy allowance: Budget 5%–8% in Houston (actual rates vary by area).
- Property taxes: Use Harris County Appraisal District (HCAD) to get exact tax amounts — typically 2%–2.5% of assessed value.
- Insurance: Get a landlord policy quote — budget $150–$250/month for a typical Houston SFH.
- Maintenance reserves: 8%–10% of gross rent for ongoing repairs.
- Property management: 8%–10% of collected rent if using a PM company.
- Mortgage payment: Principal + interest on your investment property loan.
- Net Operating Income (NOI): Gross rent minus all operating expenses (before mortgage).
- Cash flow: NOI minus mortgage payment = your monthly cash in pocket.
Bottom Line
Aim for $150–$300/month positive cash flow per Houston property after ALL expenses. If the numbers don't work conservatively, walk away — there are always more deals in a market this large.