Houston Apartments Outyield Houses by 3.5% Short-Term

Apartments win on gross short-term rental yield in Houston because their entry prices are substantially lower than comparable houses, while nightly rates do not fall proportionally. A 2-bed apartment sells for roughly $146,876 against $329,674 for a 3-bed house, yet nightly rates compress far less, so the revenue-to-purchase-price ratio lands higher. On the data, apartments average 11.7% gross short-term yield versus 8.2% for houses, a gap of 3.5% before HOA fees and operating costs. These are city medians across 132 ZIP codes in Harris County, and individual neighborhoods sit well above or below these figures.

The Bedroom-by-Bedroom Numbers for Houston (Harris County)

City medians across 132 ZIP codes. Gross yields before HOA (apartments) and before operating costs.

The highest-yielding combination in the table is a 1-bed apartment at 12.8% gross short-term yield. For investors leaning toward the long-term rental route, the standard benchmark property, a 3-bed house, produces 5.4% against 7.9% short-term. The long-term column also lets you see where the apartment advantage softens: without the nightly-rate lift, the gap between the two property types narrows meaningfully, and in some bedroom categories houses hold their own on the long-term side.

Why Apartments Lead on Gross Yield, and What Narrows the Gap

The mechanism is purchase price, not rent. A 2-bed apartment in Houston sells for roughly $146,876 while a 3-bed house sells for around $329,674, a spread of more than $180,000 even before stepping up a bedroom count. Short-term nightly rates do compress for smaller units, but they do not fall by anywhere near the same proportion. A 2-bed apartment nightly rate of around $110 against $179 for a 3-bed house represents a much smaller percentage drop than the price gap, so the revenue divided by price ratio ends up higher on the apartment side.

HOA fees pull the effective gap back. Apartment gross yields shown here are before HOA fees, estimated at around $2,439 per year for a typical 2-bed apartment in this market. Newer downtown buildings with concierge, gym, and pool amenities charge meaningfully more than older mid-rise stock in the inner loop suburbs, so the actual deduction depends heavily on the specific building. Factoring a realistic HOA into the apartment numbers still leaves apartments ahead in most Houston submarkets, but the advantage shrinks from the headline gap to something considerably smaller.

Regulatory risk sits at the building level as well as the city level. Houston adopted its first short-term rental ordinance in April 2025, which introduced a Certificate of Registration ($275 plus $33.10 admin fee) with a January 2026 compliance deadline, and unhosted rentals are not permitted in multifamily buildings. That last point is critical for apartment investors: even where city rules allow short-term letting, individual condo associations can prohibit it outright through their HOA covenants regardless of municipal law. Always read the HOA documents before purchasing an apartment you intend to rent nightly.

The Bedroom Count Curve Runs in Different Directions for Houses and Apartments

Houses and apartments do not follow the same trajectory as bedroom count rises, so the decision is not a single toggle between property types. Read the direction from the short-term columns of the table: house yields tend to climb with bedroom count because larger properties command disproportionately higher nightly rates from families and group travelers, while their per-bedroom purchase cost grows more slowly. Apartment yields flatten or step back at the top end, with the 4+ bed apartment short-term yield landing at 11.5% because larger units come with steep purchase prices and a thinner pool of groups willing to pay the premium for an apartment rather than a house.

The long-term column can move in a different direction again, and the 4+ bed category deserves extra caution because it bundles 4, 5, and 6+ bedroom listings. A small number of outlier properties can pull the median either way, so treat the 4+ bed figures as directional rather than precise.

Individual Houston Suburbs Diverge Significantly from These City Medians

City medians span 132 ZIP codes in Harris County, which includes both the high-yield outer belt and the luxury inner loop. At the top of the ranking, Greenspoint/North (77067) produces a gross yield of 12.5% on a median sale price of $205,000, while South Park/Sunnyside (77033) and Greenspoint/North (77050) deliver 12.1% and 12.1% respectively. These outperform the city-wide numbers by a wide margin, and the house-versus-apartment verdict can flip within a specific ZIP depending on the local mix of rental stock. The dashboard shows suburb-level data for every bedroom count and property type, so you can compare within the specific area you are evaluating.

View Houston in the dashboard → Free preview · every bedroom count and property type

What the Table Does Not Capture

• HOA fees: Estimated at around $2,439 per year for a 2-bed apartment in this market, not deducted from the gross yields in the table above. Luxury downtown and Galleria-area buildings charge meaningfully more.
• Capital appreciation: Houses usually outperform apartments on long-term value growth because you own the land, and land in Harris County has historically tracked population growth. Apartment appreciation depends more on building condition and HOA reserve health.
• Renovation potential: Houses offer optionality (extensions, additions, pools, detached accessory dwellings) that apartments simply cannot match. In a sprawling metro like Houston with generous lot sizes, this optionality has real dollar value.
• Financing constraints: Some lenders restrict mortgages on small apartments (under 500 sq ft), non-warrantable condos, or buildings with high investor-to-owner ratios. This narrows your buyer pool at resale and can affect your own financing terms up front.
• 4+ bed data breadth: The 4+ bed category bundles 4, 5, and 6+ bedroom listings. A small number of outlier luxury properties in neighborhoods like River Oaks or Memorial can pull the median in either direction, so treat this row with more caution than the narrower bedroom bands.

Houston Sits Well Above State and National Medians on Price

Houston's median 3-bed house at $329,674 sits above the Texas state median of $235,000 and the national median of $242,500, which positions it as a higher-priced metro than the rest of its state but still affordable against coastal peers. On gross long-term yield, Houston's 6.9% sits above the national median of 5.3%, so this is a cash-flow-oriented market rather than a pure appreciation play. Monthly rent of $1,606 for a 3-bed house also runs above the $1,070 national figure, reinforcing the income tilt.

For the house-versus-apartment decision specifically, this combination matters. In a cash-flow market, the gross yield gap between apartments and houses translates more directly into monthly cash flow, because investors are not relying on capital gains to bail out a thin operating return. That makes the apartment advantage more meaningful than it would be in, say, a coastal appreciation market where buyers tolerate lower yields in exchange for growth. Houston rewards yield discipline, and the data supports tilting toward apartments on gross return while weighing the HOA, appreciation, and optionality trade-offs above.

For more on the wider Houston investment picture, see our market score methodology and data sources. Explore rental data in the dashboard to compare specific ZIP codes side by side.

Data reflects market conditions as of April 2026.

This information is for educational purposes only and should not be considered financial or legal advice. Regulations and market conditions change frequently. Verify current rules with local authorities before making investment decisions.