Houston Property Investments
Assignment #6

When confronted with the choice of selecting what city's real estate to invest in, Houston seems like a very logical choice for a variety of reasons. These reasons include the tremendous growth in the Houston economy, the abundance of investment opportunities, and the fact that it is where I will be spending the summer, thus allowing me the ability to check on my properties periodically.

As far as for the type of property I would invest in, I would select Retail properties. Specifically, properties listed as Neighborhood Service Centers. The reasoning behind selecting these properties include several factors.

The first factor is the general economic conditions of Houston. The American economy in general is still struggling to recover from a global economic recession, but some cities are doing better than others. One of these is Houston. For the 2012 year, the city led the nation in overall total economic growth. A staggering statistic stated by Mayor Annise Parker in the Houston Chronicle last June points out the relative growth of Houston in light of the struggling economy: "The greater Houston metropolitan area has a greater GDP than the entire state of Georgia". These improving economic conditions in Houston have led to a growth in retail revenues. These revenues grew 2.56% (the second highest in the nation) according to the Houston Business Journal. This growth in revenue leads to a stable retail market with the ability to provide investment payoffs on the property.

The second factor is that within retail properties, the neighborhood service centers have a large abundance in vacancy according to the Texas A&M Real Estate Center. This vacancy rate is higher than any other type of property within retail at 11%.

The last factor leading to this investment decision is the relatively low cost of purchase per square foot against the other types of properties. At an average rental rate of $13.45/square foot, this only serves to make the investment more attractive.

All in all, these types of properties afford an interesting opportunity for investment. As an individual unfamiliar with the real pros and cons of real estate investment, this seems to me to be a fairly safe investment that will provide for a relatively sure payoff while adding to the overall economic healthiness and natural growth of the city of Houston.