When most people think about the Houston area, they picture big single-family homes and ranches. But there’s something to be said for being in the thick of it – right in the heart of downtown. And if you want to live downtown, or invest in a rental property there, you might consider a loft.
What is a Loft?
A loft can be defined as a large, single room residence with few (if any) interior walls separating the space. Lofts are a staple of large cities – particularly northeastern cities like New York and Boston – though all major cities have a fair collection of loft residences.
Traditionally, lofts were popular in artist communities for their free space. They allowed artists to work and live in the same area and enjoy ample natural light. Today, they’re among the most expensive properties on the market.
“Lofts have an inherent cool factor in that they are often converted from factory or warehouse spaces. The default decor is industrial chic, with features that include exposed brick walls and ductwork, high ceilings, and large windows that let in an incredible amount of natural light,” Barbara Zito writes for Fool.com. “New construction may offer ‘loft-style’ living spaces, but true lofts come from those former industrial spaces often found in urban centers.”
Though it might seem like a nuance, you should know that a studio and a loft are not the same. There are a few distinct differences. While both lofts and studios tend to be one-room apartments with open floor plans, studios tend to be small and cozy. Lofts, on the other hand, can be significantly larger.
According to Zito, the national average for a studio is 530 square feet. A “true” loft comes in at 1,000 square feet or larger (in most cases). They also tend to have bigger windows and higher ceilings, which makes the space feel bigger.
So before you start your search, make sure a loft is what you want (and that you’re not actually interested in a studio). If you are interested in a studio, there’s generally more inventory available/
Why Invest in a Loft?
Loft investing isn’t for everyone, but it certainly has its perks for those who are interested in this niche. Benefits include:
- By default, true loft apartments tend to be located in great locations. This ensures you’ll be able to charge premium rent. It also increases the chances that your property will hold its value over time.
- While McMansions are going out of style, the minimalist movement has people reconsidering how much space they actually need. For single individuals and young couples, a loft is highly appealing.
- Lofts are older, but they tend to have fewer problems. They’re usually made with quality craftsmanship. Plus, with less space, fewer walls, and a more open concept, there’s less that can go wrong.
Lofts have become very popular over the past decade. And while they’re definitely trendy, they also have a classic appeal that will continue to resonate for years to come.
5 Tips for Investing in a Downtown Houston Loft
There’s a fairly wide selection of lofts available in downtown Houston. If you’re looking to invest in one as a cash-flowing, income-producing process, you’re in the right place. Here are a few tips to help:
1. Find the Right Realtor
Different real estate agents have different skills, experiences, and areas of focus. While it’s certainly possible for one agent to have involvement in different types of real estate, it’s nice to work with someone who focuses on precisely what you need. Thus, when you search for a real estate agent, try to work with someone who has experience listing and buying lofts on behalf of their clients.
One of the perks of working with a realtor who is familiar with loft transactions is that they know the current state of the market and the trends beyond just looking at MLS data. They actually hear the conversations, see the properties, and understand values through firsthand experience.
2. Choose the Right Type of Loft
Not all lofts are created equal. Some lofts are lofts by name only. Real estate developers have caught on to the fact that younger buyers like the idea of lofts and they’ve actually come in and created brand new construction that mimics the style. For some people, this is fine. But if you want a true loft, you’ll almost certainly need to look for older buildings. (Though it’s entirely possible they’ve been renovated and retrofitted.)
As previously mentioned, you’ll also want to stay away from studios. (Unless you like the style.) They tend to be very different in design and functionality.
3. Consider HOA Rules and Regulations
Because a loft is a part of a much larger building, you’ll find that it’s typically governed by a homeowners association (HOA). This isn’t necessarily a bad thing, but it is something to think about. Not only will it come with a monthly/annual fee, but HOA regulations can actually dictate what may and may not be done to the property. Always read the bylaws before purchasing to make sure you know what you’re getting into.
4. Be Prepared for High Utility Bills
High ceilings and big windows make a room seem bigger, but they also limit energy efficiency. If you’ll be footing the bills for utilities, prepare to have higher than average energy bills – particularly during the peak of summer.
5. Think About Furnishing and Decor
Many renters expect lofts to be fully or partially furnished. When purchasing a loft, consider what the rest of the inventory on the market is like. If the other five rented lofts on your floor all come furnished, you’ll need to do the same. Add this cost into the equation.
Let Green Residential Help
When you look at Houston’s real estate market, you’ll see a diverse collection of properties to fit every need, style, and budget. From large farms to chic downtown lofts, there’s something for everyone.
Whether you own single-family properties, lofts, or anything in between, our team is here to help. Contact Green Residential today to learn more about our comprehensive Houston property management services!