We've highlighted 4 Houston areas that show serious promise for fix and flip investors. Learn about what makes them so alluring for high returns.

Fix-and-flip projects in Texas can be excellent investments if you research and plan carefully. The real estate market has gone through multiple upheavals recently. Interest rates have gone up, and home prices in many areas have decreased.

Houston has been the state’s largest city for almost a century. It is also one of the country's fastest-growing and most diverse cities. This article offers an overview of the Houston market and suggestions for areas to watch for fix-and-flips and other investments.

Planning a real estate investment in Houston

Image by Avatarr8 on Wikimedia Commons [Creative Commons]

Economic conditions have been uncertain in the first half of 2023, but real estate investors generally seem optimistic. A survey of single-family residential investors by National Mortgage News found that about 70% feel confident about market conditions and plan to make more purchases this year. A few factors to keep in mind include the following:

Foreclosure rates are on the rise, with 2023 seeing about 64% more foreclosure filings than the previous year. Texas is near the top of the list for foreclosures.
Demand for housing remains strong throughout Texas. Even if rising interest rates keep some people from buying homes, they will continue to rent.
Experts believe that the real estate market will complete a shift toward favoring buyers sometime soon. A survey of economists and real estate experts by Zillow found that 44% expect a buyer’s market in 2023. About one-fourth believe it will happen by 2024.

The greater Houston area is growing. U.S. Census data place the Houston-Woodlands-Sugarland metro area among the fastest-growing areas in the country. The city itself has an estimated population of more than 2.3 million. The metro area’s estimated population in 2023 is over 6.7 million. Growth in the areas surrounding Houston and Harris County has been even faster than in the city itself. Liberty County reportedly saw 10.3% growth from 2020 to 2022, while Chambers County grew by 9.1%. Fort Bend, Montgomery, and Waller Counties also saw high growth rates.

Photo by Carol M. Highsmith on Wikimedia Commons [Public domain]

Much of the Houston area’s economy is based on the petrochemical and energy industries. Ports in Houston, Texas City, and Galveston have also made the area a major shipping hub. The Texas Medical Center, located a few miles south of downtown Houston, is the world’s largest medical center and attracts doctors, researchers, and patients from across the globe. Houston is also home to seven major league sports teams in baseball, basketball, football, men’s and women’s soccer, and rugby.

Researchers at Rice University declared Houston to be “the most ethnically diverse large metropolitan area in the country” a little over a decade ago. The city has been at or near the top of multiple lists of diverse cities in the years since.

Houston presents at least one unusual challenge for real estate investors who are new to the area. The city has no zoning laws, but that doesn’t mean property owners can build whatever they want on their land. The city regulates land use through other means, including ordinances, policies, and restrictive covenants. Voters have had the opportunity to add zoning laws to the city code at least three times in the past century, and have voted it down each time.

Areas in Houston for fix & flip properties

Many of Houston’s fastest-growing and most promising areas are located outside of the city itself, but there are also countless opportunities within Houston. At 665 square miles, Houston is the largest city in the country by area that isn’t part of a consolidated city-county. The city is about the same size as the island of Oahu. The greater metro area covers 9 counties and 9,444 square miles, making it larger than New Jersey. Our point here is that investors can choose from a vast array of options. The following are a few of the most promising:

Hunterwood

Hunterwood is a suburban community with a population of around 9,000 residents. It is located along the Crosby Freeway (U.S. Highway 90), about a 19-minute drive from downtown Houston. The median sale price for houses is around $201,000 or $157 per square foot. The price per square foot has gone up by more than 26% since 2022.

Clear Lake City

Photo by NASA on Wikimedia Commons [Public domain]

This area southeast of the central part of the city is home to the Johnson Space Center. When astronauts talk to “Houston,” they are talking to people who work here. The University of Houston’s Clear Lake campus is also located here, along with several other research institutions. Housing is in constant demand in the Clear Lake area because of the steady influx of scientists, engineers, and students. The median sale price of Clear Lake homes is about $310,000.

Spring

Spring is a suburb located about 25 minutes north of downtown Houston near where I-45 intersects the Grand Parkway (SH 99). The area is already home to an ExxonMobil corporate campus with more than 10,000 employees. It is likely to grow when the company completes its plan to move its corporate headquarters from the Dallas area to Spring later this year.

Hewlett Packard Enterprise, which was formerly part of the computer company Hewlett-Packard (HP), has moved its corporate headquarters from San Jose, California. It initially set up its operations in the facility used by Compaq, the Houston-based computer company that HP bought in 2002. Hewlett Packard Enterprise celebrated the grand opening of its Spring facility in early 2022. These moves are making Spring a hotbed of real estate activity.

Afton Oaks

This neighborhood is located just south of River Oaks, Houston’s ritziest area. It is nestled near the northwest intersection of Loop 610 and the Southwest Freeway (I-69/US 59). It offers many of the same benefits as River Oaks, such as large lots, elegant homes, and close proximity to the downtown, Galleria, and Medical Center areas.

It is a hot area for experienced investors. The median sale price as of May 2023 is $1.075 million, which is a significant increase from last year. Sales have been brisk, even as much real estate activity has slowed down across the state.

Get fast & friendly financing for fix & flips!

The hard money lenders at Capstone Capital Partners offer investment loans in the greater Houston area. We live, lend, and invest in the great state of Texas. We provide fast and flexible funding options and offer friendly service from beginning to end. Applying is easy, so contact us today to get started on a free pre-approval.

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4 Houston Fix & Flip Hotbeds for Investors in 2023