A few of the tenants inside this 7-unit, now-up-for-sale apartment building on Hawthorne St., 2 blocks from Spur 527 appear to be on the same page design-wise. The photo above shows the living room inside one of the building’s 6 one-bedroom apartments done up with a Persian rug, atop which sits a glass tabletop covered in curios surrounding a floral centerpiece.
Now, compare that to that to the living room the building’s sole 2-bedroom unit, shown below:
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Here it is viewed from the opposite angle:
A few key differences between the 2: Those chairs shown above provide much more of a personal touch than the ones in the other apartment do. There’s also that priestly guy over on the right. In the one-bedroom, humanoid figures do appear as well — up on the left wall wall shown below — but not in full form:
The 3-story brick building was put there in 1926, according to county appraisal records. It previously housed 8 units before the current configuration came into effect. Stepping inside, the first thing you see is the mail room to your left:
Rest here if you need to . . .
before continuing to Apartment 1 at the bottom of the stairs:
They take you up to this cozy waypoint:
And then dump you off on floor 2.
Inside one of the apartments up there, a further climb leads up to a storage area as well as the roof:
The whole building’s going for $1.45M, with 5 tenants committed to stay after the sale for at least a year, each paying $1000 a month.
A few more views of their setups:
Parking lines the back of the building . . .
in between driveways that run along either side of its front lawn:
- 429 Hawthorne St. [HAR]
Wow, what a beautifully maintained and decorated building. Never seen a rental building that old so nicely kept up. Shame about what is likely to happen very soon.
re: Westmoreland house
“5 tenants committed to stay after the sale for at least a year, each paying $1000 a month.”
A beautiful, spacious apartment in an historic house, in one of the most desirable neighborhoods in Houston is renting for only $1,000/mo. Really, who’s going to pass that up?
If someone is, please let me know. Please.
Pretty please.
Cool looking building but my god it’s over priced. There is zero chance the buyer will make money with the property even if they rent out the two empty, keep it full 24/7/365, using the owners lofty proformas
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It’s almost 2x over priced but at least $500k over priced.
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Big Tex: What do you mean ‘whos going to pass it up’? As a sale it’s a terrible deal. As a rental it’s a pretty good deal for the area. I live about 2 miles away
@Big Tex, funnily enough I always considered this the bad side of Montrose. No parks within walking distance, same for schools, too close to midtown (can you still hear the 59 underpass gunshots here?), horrible positioning for evening commutes, etc. It does look much better maintained than most.
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I happily gave up my 2bd w/ sunroom duplex in Vermont Commons for 1200 some months back. Had been holding onto that one for too long.
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Now on the west side of town and it’s mind blowing how much more walkable everything is here than the montrose. Good riddance ;)
Pictures are awesome, if only that paid the bills. As a cash flow investment, here is the biggest problem (other than current rents in no way support the price):
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HCAD has this property around $800k. That results in a $11k tax bill. Which is far more than the current rent roll. When your property tax bill exceeds monthly rent collection, it makes cash flowing hard. On top of that, if HCAD were to reset the tax value to the purchase price, the buyer would be DEAD. Nearly 1/3 of total collected rent would go just to property tax
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THAT SAID – I’d be lying if I didn’t admit the property has a “cool factor” that many people will pay up for. Some people buy income properties purely for the cash flow. Others want something that’s cool — cash flow be damned. So just because from a cash flow standpoint the purchase price isn’t supported, or the property tax increase might smash you, doesn’t mean that they won’t find a buyer. And even though I’d like to buy it (just can’t at that price), I wish them the best as I love that people take care of these types of properties.
I’m surprised anyone would want to live in Westmoreland, what with the horrible walkability, terrible commuting distance and stray gunfire from Midtown. Thanks, Swamplot commenters, for saving us from what one might assume to be a lovely, well-located historic neighborhood!
Keeping your annual property tax bill to no more than 8.3% of your gross rents is nigh impossible in a city where residential rentals are taxed at 2.6% give or take. The cap rate that would imply is a juicy target for other investors to bid down and out compete you.
But Cody, you missed the biggest problem with this one – hctax.net shows this property with a residential homestead exemption – I didn’t realize that was possible with anything bigger than a 4-plex. The tax bill would otherwise be $20K. And if this thing goes for asking? Well that’ll bump it up to $38K.
Guess who, I get your point but “when your property tax bill exceeds monthly rent collection, it makes cash flowing hard” is clearly an exaggeration. No one is able to rent a $800k property in Houston for $11k a month. They would be very lucky to get close to half that amount. So the property tax bill is always going to well exceed monthly rent collection.
I guess I’m missing the math here. The tax is $11k per year or $1k per month. Rental income is at least $5k per month. Are you guys adding the mortgage note etc to get to $11k per month? What am I overlooking? Thanks
Regarding property tax and rent roll, I can chime in a bit.
I have a property across the street from this one. Tax bill is $9.7k/year. Rent roll is $6.5k. So on that one, the rent roll is less than tax, and it stings a bit. Down the street I have a property that has a $21.3k rent roll and a $45k/year tax bill. Another that’s $51k/year and 27k/month rent roll. So those properties take 2 months of rent just to pay the damn tax bill :( . That’s Montrose for ya.
But others outside of Montrose (still inside the loop) are much better. Looking at one with a $52k/month rent roll and $60k/year tax. Another that has $49k/year tax and $62k/month rent roll. Best one is $88k/year and $130k/month rent roll. You get the idea.
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Anyway, point being, like CAP rate being lower in high demand areas, so to are property tax going to be a much larger % of your overall collections. And this makes sense because — well — that’s a big cause of the low CAP. But also, as building values go up, rent doesn’t go up linear. i.e., you can buy $40k/door units that rent for $600, or you can buy $100k/door units that rent for $1000. The second having a worse tax:rent ratio. So when that goes up to $160k/door for $1200 rents, taxes start to really murder you. Which is why I try not to pay more than 100x rent roll unless there is a compelling factor (as said before, on this one it would be the cool factor)
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This property has a pretty reasonable tax amount vs collections *TODAY*. If the exemption goes and the value is reset, then things will get ugly. And on that subject, I don’t think renters understand just how much of their rent is to pay property tax. Renters often look at such thing that just owners have to worry about which isn’t true.
Sparta: Current tax bill is ~1k/month. You’re not missing anything. Original point was the annual tax bill well exceeds 1 month of collections. Just a ratio that some investors look at. I like the property a lot, but didn’t even think about the homestead exemption (in addition to value) keeping the bill down.
Love the funkiness of the old building. And the tenants décor– oh yeah. @ Cody: tell it like it is. The rent vs. property tax ratio is one of the cardinal factors in property ownership, the other being revenue generated. Owing properties has their risks & rewards. Do your due diligence.@ joel: the “west” side of Houston (whatever the F**K that is) is a soulless sprawl of wasteland . I lived @ Briar Forest Dr.& Hwy 6 for 4 years. Had to drive fricking everywhere. Not to mention there is NO cultural amenities out in the burbs. I realize many people have to live in the burbs due to work/family metrics. Growing up in Bellaire / Meyerland , I’m all too familiar with the burbs and their attendant pluses & minuses. I’ll take the way older, funkier, chilled, relaxed, “village-like” Montrose over ANY other part of town-including the Memorial Villages, Tanglewood and River Oaks where I’ve lived. All VERY tony areas, but-oy vey the maintenance & security demands.I down sized and and I’m so much better off-time wise.