Round Rock, TX Cap Rate 1.65%
Round Rock is the corporate-and-suburban anchor of Austin's premier northern metro — uniquely combining Dell Technologies' global headquarters, premium school districts, and a continued wave of Austin-metro corporate relocations. The 1.65% cap rate at a $425,000 median price reflects sustained Austin-metro premium positioning. The 0.37% rent-to-price ratio sits below the 1% rule. Population growth at 3.1%/yr is among the strongest in the country.
Employment is anchored by Dell Technologies (Round Rock is Dell's global headquarters and major manufacturing/distribution complex — one of the larger US Fortune 500 corporate HQs, with continuing operations through Dell's broader infrastructure-and-services pivot), the broader Austin metro corporate base (the broader Austin tech-employer base — Apple, Tesla, Samsung, Google, plus dozens of major tech operations have continued to relocate to Austin; Round Rock residents commute throughout the broader metro), Baylor Scott & White Medical Center - Round Rock, the broader St. David's Round Rock Medical Center, the broader Round Rock Independent School District (consistently among the highest-ranked Texas public school districts), Texas A&M University-Central Texas Round Rock campus, Round Rock Premium Outlets, Kalahari Resorts (the major Round Rock indoor waterpark resort), and a meaningful tech-supplier ecosystem. Submarkets stratify cleanly: the historic downtown Round Rock area is walkable urban with strong appreciation; the broader Forest Creek and Teravista master-planned areas are premium suburban-school zones; the broader Pflugerville south is the sister suburb; the broader Round Rock extends with continuing new construction.
Texas has no state income tax (a structural cash-flow advantage). Property tax at 1.74% is on the higher end nationally (Texas property tax compensates for no state income tax — and Williamson County has among the higher effective rates in Central Texas). Williamson County's appraisal cycle is annual. Insurance is reasonable but verify hail / tornado deductible structure. The structural advantages: Dell's global HQ presence is genuinely durable (Dell has continued to invest in Round Rock through the company's broader transitions); Austin metro's tech-employment growth continues to draw professional in-migration; premium school districts provide sustained family-rental demand; TX tax structure favors landlords. The structural risks: pricing has compressed cap rates well below national averages; high property tax structure is a real drag on cash flow; the entire pricing thesis depends on continued Austin tech-employer health (which has been cyclical through 2023-2025). For investors who want premier Austin-northern-suburb exposure with corporate-HQ anchor, Round Rock is the most defensible Williamson County option.
Market data powered by Zillow Home Value Index (ZHVI) and Zillow Observed Rent Index (ZORI) · Updated Feb 2026
Market Data
2026 Market Update: Round Rock
Round Rock's 0.4% rent-to-price ratio is well below the 1% rule. At median prices of $425,000, the $1,560/mo rent produces only $586/mo in NOI. Investors here need to target below-median properties or pursue value-add strategies to make the numbers work.
At current rates, a 20% down conventional loan ($85K at 7%) would result in approximately $-1,675/mo cash flow — negative at median prices. Larger down payments, seller financing, or buying 15–25% below median are strategies to turn the numbers positive.
Property taxes consume 40% of gross rent here — one of the highest ratios in our dataset. This significantly compresses margins and makes Round Rock a market where tax-conscious underwriting is essential. Every deal should be stress-tested with potential assessment increases.
Deal Modeling & Scenarios for Round Rock
All figures below are computed from Round Rock's real market medians. Use them as a baseline; override with property-specific numbers in the calculators.
Property Tax Bill in Real Dollars
At 1.74% effective rate on the $425,000 median price, the annual tax bill is $7,395 — that's very high (top 15% of US markets) (+64% vs the national average of ~1.06%). Verify the actual assessed value before purchase; sale-triggered reassessments can push the bill higher than the seller's current statement.
5-Year Cap Rate Trajectory
If Round Rock continues appreciating at 3%/yr while rents grow at a conservative 3%/yr, cap rate holds roughly steady as price growth outpaces rent. Year-by-year projection at the median:
| Year | Est. Price | Est. Rent/Mo | Cap Rate |
|---|---|---|---|
| Today | $425K | $1,560 | 1.7% |
| Year 1 | $438K | $1,607 | 1.7% |
| Year 2 | $451K | $1,655 | 1.7% |
| Year 3 | $464K | $1,705 | 1.7% |
| Year 4 | $478K | $1,756 | 1.7% |
| Year 5 | $493K | $1,808 | 1.7% |
Three Financing Scenarios
Same median-priced Round Rock property — different capital structures. All-cash maximizes cap rate. Leverage trades cash flow for higher cash-on-cash return when the spread between cap rate and borrowing cost is positive.
| Scenario | Cash Invested | Monthly Cash Flow | Annual CF | Cash-on-Cash |
|---|---|---|---|---|
| All cash | $425K | $586 | $7,026 | 1.7% |
| 20% down conventional @ 7% | $98K | $-1,675 | $-20,106 | -20.6% |
| 25% down DSCR @ 8.5% | $123K | $-1,866 | $-22,388 | -18.2% |
Three Price Tiers: Below, At, and Above the Median
Properties don't always trade at the median. Lower-priced units typically offer higher cap rates but harder operations; higher-priced properties tend to compress cap rates while attracting better tenants. All-cash assumptions below:
| Tier | Price | Rent/Mo | NOI/Yr | Cap Rate | Monthly CF |
|---|---|---|---|---|---|
| Below median (~75% price) | $319K | $1,326 | $5,781 | 1.8% | $482 |
| At median | $425K | $1,560 | $5,731 | 1.3% | $478 |
| Above median (~125% price) | $531K | $1,794 | $5,681 | 1.1% | $473 |
Total Return Over a 5-Year Hold
Cap rate is just one piece. Real estate returns come from four sources: cash flow, appreciation, principal paydown, and tax benefits. Assuming 20% down conventional financing at 7% and a 5-year hold at Round Rock's historical appreciation rate of 3%:
On a $85K down payment, that's a -8.6% total ROI over 5 years (not annualized). Tax benefits from depreciation are additional and depend on your personal tax bracket.
Risk Flags Specific to Round Rock
Automated checks against the underlying data — surface only the risks that actually apply to Round Rock, not generic boilerplate:
Cap Rate Calculator — Round Rock
Pre-filled with Round Rock medians. Adjust to match a specific property.
Cash-on-Cash Return — Round Rock
Factor in financing to see your actual return on invested capital in Round Rock.
Is Round Rock a Good Place to Invest in Rental Property?
Round Rock, TX has a population of 138,000 and has been growing at 3.1% annually — well above the national average, signaling strong housing demand from population inflows. The median home price of $425,000 paired with median rents of $1,560/mo produces an estimated cap rate of 1.65%.
Property taxes at 1.74% are notably high and represent a significant drag on cash flow — model this expense carefully, as it can make or break a deal. The vacancy rate of 4.8% is impressively low, indicating tight rental supply and strong tenant demand — favorable for landlords.
At a price-to-income ratio of 5.2x, homes cost about 5.2 times the local median income of $82,400. This moderate ratio indicates a balanced rent-vs-buy market. Home values have appreciated at roughly 3% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.
Bottom line: At current median prices, Round Rock is challenging for pure cash flow investing. Consider BRRRR strategies with below-market purchases, or look at neighboring metros with stronger price-to-rent ratios.