%
CapRateCity
Free cap rate calculators for every US market
← All markets

Best Cities for Rental Property in Texas

52 Texas cities ranked by estimated cap rate. The average cap rate across Texas markets is 3.9%, with median home prices averaging $264K and rents averaging $1,415/mo. Kingsville leads with a 8.2% cap rate at a $150K median price. Note that Texas's average property tax rate of 1.72% is above the national average — factor this into your underwriting.

3.9%
Avg Cap Rate
$264K
Avg Price
$1,415/mo
Avg Rent
52
Cities Tracked

Texas Rental Market Analysis

Texas offers 52 investable rental markets tracked by CapRateCity. The state average cap rate of 3.9% is above the 3.81% national average, making Texas an attractive state for cash flow investors. No cities pass the 1% rule at median prices, so value-add strategies are essential.

Prices and rents: Texas home prices average $264K, which is 21% below the national average of $333K. Rents average $1,415/mo. The most affordable entry point is Plainview at $115K, while Kingsville offers the highest cap rate at 8.2%.

Taxes and costs: Property taxes average 1.72% across Texas, above the 1.08% national average — investors should model tax expense carefully. Midland has the lowest rate at 1.59%.Vacancy averages 5.8%, in line with national norms.

Growth outlook: Population growth across Texas averages 1.79% per year, led by Frisco at 4.2%. Home values are appreciating at 2.7% annually on average. Strong population growth is driving housing demand and supporting both rent increases and price appreciation across the state.

Bottom line: Texas is primarily an appreciation market. Cash flow investing requires below-median purchases or value-add strategies. Consider whether the growth and appreciation potential justifies tighter margins.

Sponsored · Want to analyze a specific property? DealCheck imports real listing data and runs the full analysis for you.
Try Free →

How Texas Compares to National Averages

Metric
Texas
National Avg
Avg Cap Rate
3.9%
3.8%
Avg Home Price
$264K
$333K
Avg Rent
$1,415/mo
$1,524/mo
Property Tax
1.72%
1.08%
Vacancy Rate
5.8%
5.6%
Pop. Growth
1.79%/yr
0.92%/yr

Texas Cities by Cap Rate Tier

Above 8% (1)7% – 8% (2)5% – 6% (8)4% – 5% (10)3% – 4% (15)Below 3% (16)

All 52 Texas Cities Ranked

1
Kingsville, TX8.2% cap rate
$150K median$1,420/mo rent1.72% tax1.8% growth
→
2
Big Spring, TX7.2% cap rate
$140K median$1,210/mo rent1.72% tax1.8% growth
→
3
Abilene, TX7.2% cap rate
$205K median$1,770/mo rent1.72% tax1.8% growth
→
4
Jacksonville, TX5.9% cap rate
$225K median$1,670/mo rent1.72% tax1.8% growth
→
5
Wichita Falls, TX5.9% cap rate
$170K median$1,260/mo rent1.72% tax1.8% growth
→
6
Plainview, TX5.5% cap rate
$115K median$820/mo rent1.72% tax1.8% growth
→
7
Beaumont, TX5.5% cap rate
$180K median$1,270/mo rent1.72% tax1.8% growth
→
8
Mount Pleasant, TX5.4% cap rate
$215K median$1,510/mo rent1.72% tax1.8% growth
→
9
Lufkin, TX5.4% cap rate
$195K median$1,360/mo rent1.72% tax1.8% growth
→
10
Brownsville, TX5.3% cap rate
$205K median$1,420/mo rent1.64% tax0.8% growth
→
11
Lubbock, TX5.0% cap rate
$210K median$1,390/mo rent1.65% tax1.1% growth
→
12
Texarkana, TX4.8% cap rate
$175K median$1,140/mo rent1.72% tax1.8% growth
→
13
El Campo, TX4.8% cap rate
$240K median$1,560/mo rent1.72% tax1.8% growth
→
14
Del Rio, TX4.8% cap rate
$205K median$1,330/mo rent1.72% tax1.8% growth
→
15
Corpus Christi, TX4.8% cap rate
$220K median$1,420/mo rent1.68% tax0.8% growth
→
16
Odessa, TX4.8% cap rate
$250K median$1,610/mo rent1.72% tax1.8% growth
→
17
Paris, TX4.7% cap rate
$200K median$1,280/mo rent1.72% tax1.8% growth
→
18
El Paso, TX4.7% cap rate
$225K median$1,450/mo rent1.74% tax0.6% growth
→
19
Laredo, TX4.5% cap rate
$215K median$1,330/mo rent1.7% tax1% growth
→
20
Amarillo, TX4.2% cap rate
$210K median$1,240/mo rent1.62% tax0.7% growth
→
21
McAllen, TX4.0% cap rate
$190K median$1,100/mo rent1.72% tax1.8% growth
→
22
Waco, TX3.9% cap rate
$250K median$1,420/mo rent1.7% tax0.9% growth
→
23
San Angelo, TX3.8% cap rate
$240K median$1,340/mo rent1.72% tax1.8% growth
→
24
Longview, TX3.7% cap rate
$210K median$1,160/mo rent1.72% tax1.8% growth
→
25
Victoria, TX3.7% cap rate
$215K median$1,180/mo rent1.72% tax1.8% growth
→
26
Corsicana, TX3.6% cap rate
$225K median$1,220/mo rent1.72% tax1.8% growth
→
27
College Station, TX3.5% cap rate
$305K median$1,620/mo rent1.72% tax1.8% growth
→
28
Killeen, TX3.4% cap rate
$250K median$1,320/mo rent1.68% tax1.2% growth
→
29
Sulphur Springs, TX3.4% cap rate
$255K median$1,330/mo rent1.72% tax1.8% growth
→
30
Houston, TX3.4% cap rate
$305K median$1,620/mo rent1.81% tax1.5% growth
→
31
Athens, TX3.3% cap rate
$265K median$1,370/mo rent1.72% tax1.8% growth
→
32
Tyler, TX3.2% cap rate
$265K median$1,340/mo rent1.72% tax1.8% growth
→
33
San Antonio, TX3.1% cap rate
$275K median$1,390/mo rent1.72% tax1.4% growth
→
34
Kerrville, TX3.1% cap rate
$360K median$1,800/mo rent1.72% tax1.8% growth
→
35
Sherman, TX3.1% cap rate
$285K median$1,420/mo rent1.72% tax1.8% growth
→
36
Midland, TX3.1% cap rate
$325K median$1,580/mo rent1.59% tax2.2% growth
→
37
Nacogdoches, TX2.9% cap rate
$210K median$1,010/mo rent1.72% tax1.8% growth
→
38
Huntsville, TX2.8% cap rate
$270K median$1,260/mo rent1.72% tax1.8% growth
→
39
Frisco, TX2.6% cap rate
$360K median$1,630/mo rent1.8% tax4.2% growth
→
40
McKinney, TX2.6% cap rate
$360K median$1,630/mo rent1.78% tax3.5% growth
→
41
Denton, TX2.6% cap rate
$360K median$1,630/mo rent1.76% tax2.8% growth
→
42
Plano, TX2.6% cap rate
$360K median$1,630/mo rent1.82% tax1.6% growth
→
43
Fort Worth, TX2.5% cap rate
$360K median$1,630/mo rent1.79% tax2.4% growth
→
44
Arlington, TX2.5% cap rate
$360K median$1,630/mo rent1.77% tax1.3% growth
→
45
Dallas, TX2.5% cap rate
$360K median$1,630/mo rent1.8% tax1.8% growth
→
46
Gainesville, TX2.5% cap rate
$310K median$1,380/mo rent1.72% tax1.8% growth
→
47
Stephenville, TX2.4% cap rate
$330K median$1,440/mo rent1.72% tax1.8% growth
→
48
Bay City, TX2.3% cap rate
$200K median$860/mo rent1.72% tax1.8% growth
→
49
Fredericksburg, TX2.1% cap rate
$495K median$2,010/mo rent1.72% tax1.8% growth
→
50
Brenham, TX1.9% cap rate
$365K median$1,440/mo rent1.72% tax1.8% growth
→
51
Austin, TX1.7% cap rate
$425K median$1,560/mo rent1.68% tax2.8% growth
→
52
Round Rock, TX1.7% cap rate
$425K median$1,560/mo rent1.74% tax3.1% growth
→

Other South States

Mississippi (9 cities · 6.3% avg)Louisiana (13 cities · 5.9% avg)West Virginia (10 cities · 5.9% avg)Alabama (18 cities · 5.7% avg)Oklahoma (18 cities · 5.7% avg)Georgia (26 cities · 5.0% avg)

Frequently Asked Questions

Is Texas a good state for rental property investing?
Texas has an average cap rate of 3.9% across 52 cities, which is above the national average of 3.81%. The best-performing city is Kingsville at 8.2%. Average home prices of $264K offer affordable entry points. Property taxes at 1.72% are a consideration.
What is the best city to buy rental property in Texas?
Kingsville leads Texas with a 8.2% cap rate, $150K median price, and $1,420/mo rent. The best city depends on your strategy — cash flow investors should look at the top of this ranking, while growth-focused investors may prefer Frisco (4.2% population growth). Use the calculators on each city page to model specific deals.
What are property taxes like in Texas?
Property taxes in Texas average 1.72%, which is above the 1.08% national average. The lowest rate is in Midland at 1.59%. On an average-priced home of $264K, annual taxes are approximately $4,542.
How many Texas cities pass the 1% rule?
0 of 52 Texas cities (0%) pass the 1% rule at median prices. None pass at median prices, meaning investors should target below-median properties or use value-add strategies to improve returns. The 1% rule says monthly rent should be at least 1% of purchase price.

Explore More

Highest Cap Rate Cities →Best Cash Flow Cities →Fastest Growing Markets →Lowest Property Tax Cities →Best Southern Markets →
The CapRateCity Report
Weekly market analysis: highest cap rate cities, emerging markets, and deal breakdowns. Free, no spam.