When property taxes rise sharply in a market where rents cannot keep pace, landlords do not simply absorb the cost. They sell. In Montgomery County, Texas, that pattern is accelerating. It is creating a ripple effect: renters are displaced, the market floods with additional inventory, and buyers gain leverage.
Maria Borrego, a Realtor with 20 years of experience working residential and investment transactions in Montgomery County, says the tax-driven selloff is one of the defining dynamics of the current market. “Property taxes have gone up, so it’s harder to hold properties that aren’t producing money,” she says.
The result is a wave of lots and rental homes hitting the market, not because owners want to sell, but because carrying costs have crossed a threshold where holding no longer makes financial sense.
The downstream effect lands directly on tenants. Borrego recently closed a transaction in which the seller, a landlord, chose to sell a rental property rather than keep absorbing tax increases. The tenant, who had been renting the home, was forced to buy it.
Borrego says she sees this pattern repeatedly. Renters are pushed out of investment properties as owners choose to sell rather than raise rents or absorb losses. This leaves displaced renters with a difficult choice: search for another rental in a market where landlords face the same tax pressure, or try to buy in a market that favors them on price but is still limited by high interest rates.
Some of these displaced renters are becoming buyers not by choice but by necessity. The same conditions pushing landlords to sell are creating purchasing opportunities for tenants who can qualify for a mortgage.
The landlord selloff adds to an inventory picture already tilted toward buyers. According to Borrego, Conroe alone has roughly 1,860 active listings against about 2,275 sales over the prior six months. Conroe is just one of about six cities in Montgomery County, all within a few miles of each other.
Borrego says buyers are taking full advantage. The volume of choices lets them be more selective, holding out for condition and features that were impossible to demand during the pandemic boom. Buyers want newer roofs, updated mechanical systems, and modern kitchens, and current inventory levels give them the leverage to insist on it.
New-build communities have recognized this shift and are competing aggressively. Borrego notes that builders are offering closing-cost assistance and temporarily reduced interest rates, incentives that resale properties generally cannot match. For sellers of older rental homes, this means competing not only against other resale listings but against builders offering financial perks that lower a buyer’s out-of-pocket costs.
The resale trade-off, Borrego says, is that established neighborhoods offer larger lots and proven communities. In the current market, though, that advantage alone isn’t enough. Sellers also need competitive pricing and good condition to close deals.
Montgomery County’s appraisal values have kept rising even as the broader market cools, according to Borrego. That disconnect means property tax bills reflect appraised values that may exceed what a home would actually sell for. Owners who skip appealing their appraisals each year end up paying taxes on value that no longer exists, and the cumulative burden pushes more of them to sell.
Borrego is direct about the civic dimension. Many homeowners don’t vote, don’t attend local board meetings, and don’t engage with the decisions that drive their tax bills higher. The result is a cycle: disengaged taxpayers absorb increases that more active participation might have moderated.
For buyers eyeing former rental properties, the tax burden doesn’t disappear at closing. A home that was too costly for a landlord to hold at current tax rates will carry those same rates for the new owner. It’s worth requesting a full tax history and current appraisal-district valuation before making an offer.
Borrego expects Montgomery County prices to keep declining as the market corrects from what she describes as 130% to 200% appreciation during the pandemic. In her view, values will eventually settle at roughly 30% to 35% above 2019 levels. That would be a significant retreat from pandemic peaks, but not a collapse to pre-2020 pricing.
For investors, Borrego’s advice is direct: keep saving. She has told her long-term investor clients that conditions aren’t yet favorable for buying, but that next year should bring better opportunities as prices continue adjusting downward.
About the Expert: Maria Borrego is a Realtor with Walzel Properties who has worked in Montgomery County, Texas, for 20 years.
This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.
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