Short answer: In Houston, TX, the median home value is $301,200 and the median 3-bedroom rents for $1,819/mo (Census ACS 2024). That's a rent-to-price ratio of 0.60%, so it misses the 1% rule and ranks #11 of the 50 largest US rental markets. With 20% down at 7.40%, FirstDoor scores a median-priced home Pass (−$789/mo cash flow).
Key numbers
The 1% rule in Houston
A quick screen many investors start with: is monthly rent at least 1% of the price? In Houston, here's the answer on typical numbers.
Across all rentals (not just 3-bedrooms) the ratio is 0.47%. A home renting for the median 3-bedroom rent would need to cost about $182,000 or less to pass.
A typical Houston home, scored
We took a home at the median value, gave it the median 3-bedroom rent, and ran it through the same math as the FirstDoor calculator: 20% down, a 30-year loan at 7.40%, the city's median tax rate, and standard expense budgets.
| 3-bedroom rent (median) | $1,819 |
| Property tax ($4,308/yr, local median) | −$359 |
| Insurance ($1,510/yr, assumed) | −$126 |
| Vacancy 12% · Maintenance 5% · Management 8% | −$455 |
| Net operating income | $879 |
| Mortgage (P&I on $240,960 at 7.40%) | −$1,668 |
| Monthly cash flow | −$789 |
What price works in Houston?
Price is the lever you control. Holding rent at the Houston median, these are the price ceilings for each FirstDoor result.
Takeaways
- A 0.60% rent-to-price ratio puts Houston in the middle of the pack (#11 of 50). Expect to hunt for below-median prices to make the numbers work.
- A median-priced home here would cost you about $789/mo out of pocket after the mortgage and every expense. To break even you'd need to pay about $190,000, 37% below the median.
- Rents (+6.6%) and home values (+6.7%) moved roughly together from 2023 to 2024, so the ratio barely changed.
- Rental vacancy is high at 12.0% (US: 5.7%), so we budgeted 12% vacancy instead of 5%. Price in a longer wait for tenants.
- Property taxes are heavy: the median bill is $4,308, about 1.43% of value versus 0.89% nationally. Confirm the bill after purchase, since it can reset.
Frequently asked questions
Does Houston pass the 1% rule?
No, on typical numbers. The median 3-bedroom gross rent is $1,819/mo and the median home value is $301,200 (Census ACS 2024 1-year), a ratio of 0.60%. To pass at that rent, a home would need to cost about $182,000 or less.
What is the typical rent for a 3-bedroom in Houston?
The median gross rent for a 3-bedroom in Houston, TX is $1,819 a month, and $1,408 across all rentals (Census ACS 2024 1-year). Gross rent includes utilities the renter pays, so the landlord's share can be a bit lower. The 3-bedroom median rose 6.6% from 2023.
Can you cash flow a rental in Houston?
At the median price, not easily. With 20% down at 7.40% and realistic expenses, a $301,200 home renting for $1,819 loses about $789/mo. It breaks even at roughly $190,000.
How much cash do you need to buy a typical rental in Houston?
About $69,240: a 20% down payment of $60,240 plus closing costs we assume at 3% ($9,000). Lenders often also want several months of reserves. Investment loans commonly need 15–25% down.
Is Houston a good place to buy a first rental?
FirstDoor scores a median-priced home in Houston as Pass (0 of 8 points). That's a starting point, not a verdict on every listing: neighborhoods vary, and buying below the median changes the math. Run any listing through the free calculator.
Compare similar markets
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Sources
Data: U.S. Census Bureau, 2024 American Community Survey 1-year estimates (released September 2025); year-over-year changes compare with 2023. Mortgage rate: Freddie Mac PMMS, week of October 15, 2026. Retrieved October 15, 2026. Insurance ($1,510/yr), closing costs (3%), maintenance (5%) and management (8%) are FirstDoor assumptions, not local data. Investment-property loans often price above the PMMS average. Medians describe the whole city, not any one home. Educational content, not financial advice.