6 Best Places to Buy Rental Property in Texas

What are the best places to buy rental property in Texas? That’s what I’m going to tell you about in this article.

In short, Texas is a great place to invest, but it’s a big state with lots of options, so I’m going to help you narrow down your choices.

Ready to get started? Great, then keep reading.

The six best places to buy rental property in Texas are:

Austin: Fast-growing city, diverse renters, and big companies attracting skilled workers

Dallas: Increasing rent, strong economy, and high demand for housing

San Antonio: Great colleges, job growth, and growing economy

Fort Worth: Growing population, major airport, and high quality of life

Arlington: Located in Dallas-Fort Worth area, investor-friendly rent prices, and good employment growth

Houston: Top universities, high demand from students, and home value growth

What are the 6 best places in Texas for investment property?

Okay, so you’ve decided to invest in real estate and are thinking about Texas. But maybe you’re still unsure about what cities you should invest in to maximize your returns.

It’s good to do your research and make that decision carefully. After all, you want to buy rental property because you want to make money, and rushing your decision could be costly. I know because I did it myself.

As a newbie investor, I was so eager to get started I bought a house without having it checked out. The end result was broken pipes, sewage leaks, animal infestations, and an unexpected $40,000+ repair bill. It’s not something I want anyone else to go through.

So, use these cities below to get started, but know that more research is always better than less. I talk more about that here:

Now, let’s talk about my six best places to buy rental property in Texas.

1. Austin

Austin is currently one of the fastest-growing cities in America and attracts young college grads and older residents alike. In other words? It offers a diverse pool of people you could rent to based on your preferences.

Also, big companies like General Motors and Snap Inc. have locations in Austin, which means the city will continue to attract skilled labor for the foreseeable future.

As an investor, Austin is an attractive choice because the city is facing a housing crisis brought on by its population growth. What that means for you is finding tenants and keeping your rentals occupied is a lot easier because the demand is high.

Key data:

Population: 984,567
Median rental price: $2,295
Home value growth compared to last year: 3.7%
Median home value: $586,000

2. Dallas

Rents in Dallas have increased by over 43% in the past ten years, which is always a good sign for investors. People move to the Dallas area to benefit from its strong economy, diverse employment opportunities, and more affordable cost of living.

Additionally, there’s a high demand for housing. Again, that directly translates into lower vacancy rates and higher returns. Also, Dallas offers tax incentives to investors, which makes it easier and less expensive for you to invest there.

Key data:

Population: 1,302,753
Median rental price: $2,095
Home value growth compared to last year: 20.7%
Median home value: $500,000

3. San Antonio

If renting to college students appeals to you, buying real estate in San Antonio is a smart choice. Colleges here attract tens of thousands of students. Since many need affordable housing off-campus, this offers a golden opportunity for you as an investor.

For example, the University of Texas alone has a student population of over 34,000. On-campus housing options aren’t sufficient to meet the demand, which means there’s a hole in the market that you, as an investor, can fill.

But San Antonio isn’t just a college town. If you want to target other groups, like young professionals, that’s also an option.

In fact, San Antonio is poised to add 1,500 new manufacturing jobs to the market thanks to JCB, the largest privately owned global manufacturer of construction and agricultural equipment. This move alone is expected to have a $30 billion economic impact on the area. And that’s just one example.

There are also new office spaces, hotels, and more cropping up, further giving people reasons to move there and you more reasons to invest there.

Key data:

Population: 1,513,974
Median rental price: $1,727
Home value growth compared to last year: -3.6%
Median home value: $269,900

4. Fort Worth

Fort Worth’s population has skyrocketed in recent years, and there’s no sign of slowing down. In fact, over the next 25 years, estimates show the city’s population will increase by over 287,000.

So, what brings people to Fort Worth? For one thing, the city is home to a large international airport and major corporations like American Airlines, which attracts top talent from around the world.

Another reason people move to Fort Worth is the quality of life it offers, with a good balance between urban living and access to nature parks.

For investors with a long-term vision, the city’s growth is great news because it means the demand for housing will only increase in the coming years.

Key data:

Population: 996,756
Median rental price: $2,106
Home value growth compared to last year: -0.89%
Median home value: $339,945

5. Arlington

Arlington is the smallest city on this list, but it’s still a great investment option because it’s located within the larger Dallas-Fort Worth area and benefits from the area’s economic growth.

Arlington is a particularly investor-friendly city based on relevant factors like rent prices and employment trends. In fact, Arlington was recently ranked the best place to invest in rental properties in the entire state of Texas (San Antonio and Austin came in at number two and three, respectively).

Key data:

Population: 399,825
Median rental price: $2,178
Home value growth compared to last year: 1.5%
Median home value: $324,165

6. Houston

Houston is home to several top universities, including Rice University, the University of Houston, and Texas Southern University. As is often the case in major college towns, Houston’s universities don’t have enough on-campus housing to accommodate their entire student body.

In fact, most schools house just 25%-35% of their student body and give priority to freshmen and sophomores. This leaves many upperclassmen scrambling to find a place to live before their semester starts. So, a rental property in a college neighborhood is the perfect option for them and the perfect opportunity for you.

In fact, many students prefer off-campus housing anyway because they can live with their friends instead of being in a crowded dorm with a stranger. That’s even better news for you since it means getting more potential tenants faster.

Key data:

Population: 2,319,119
Median rental price: $1,900
Home value growth compared to last year: 2.1%
Median home value: $272,144

Is buying property in Texas a good investment?

So, now that we’ve looked at the six best places to buy rental property in Texas, it’s natural to wonder if it’s worth it to invest there?

In a word? Yes.

But you don’t have to take my word for it. Let’s look at a few specific reasons why Texas makes sense as an investment location:

Strong rental markets: As we’ve seen, Texas is home to several major cities with thriving rental markets. In fact, despite relatively affordable real estate options, 40% of Texans opt to rent their homes, and this trend is likely to continue for the foreseeable future.

High rental rates and demand for housing: The median rent in Texas is $1,975 per month, which is a slight increase from last year. Demand is also increasing due to various factors.

Job growth: Texas leads the nation in job growth, with over 270,000 new jobs created since 2023.

Population growth: Texas’s population grows by about 400,000 to 590,000 every year, with a total population of nearly 31 million.

High appreciation potential: One benefit of owning property in a sought-after state like Texas? Your property’s value will increase over time, which gives you a clear financial advantage if you decide to sell down the road.

Real estate investor-friendly state: As an investor in Texas, you can benefit from several financial perks when tax season rolls around. For example, you can deduct mortgage interest and depreciation.

So, the bottom line is that, yes, buying property in Texas is a good investment. And if you’ve been meaning to get into real estate, now is the time to start.

Next steps

And there you have it! Now you know the best places to buy rental property in Texas.

As you can see, you have several solid options to choose from based on your target renters and their needs, your long-term investment goals, your budget, and so on.

But this is only the start of your financial freedom. There’s a lot more to know and many costly problems to avoid. That’s not to mention it can be tough to know who to trust.

As a seasoned investor, I can help you do things like…