Best Places To Buy Rental Property In Texas For 2025

When it comes to real estate investing, Texas is in a league of its own. With its business-friendly policies, no state income tax, and rapidly expanding cities, it's no surprise that investors are flocking to the Texas rental property market. Unlike some states where high home prices make it tough to see solid returns, Texas still offers affordable properties with strong cash flow potential. Whether you're after a steady stream of rental income or long-term appreciation, Texas delivers on both fronts. But where exactly are the best places to buy rental property?

The best places to buy rental property in Texas vary depending on your goals. Some cities are hotspots for young professionals and job seekers, while others attract families looking for great schools and affordable housing. In this guide, we’ll break down the top 15 markets that offer the best mix of rental demand, property appreciation, and landlord-friendly laws, so you can make a smart, profitable investment.

Let’s get started with the following:

• Why Texas Is One of The Best Places To Buy Rental Property
• Top 15 Best Places To Buy Rental Property In Texas
• The Best Places To Buy Rental Property In Texas: FAQ

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Why Texas Is One of The Best Places To Buy Rental Property

If you’re looking for one of the most profitable states for real estate investing, Texas should be at the top of your list. With its booming job market, rapidly growing population, and investor-friendly laws, it’s no surprise that some of the best places to buy rental property in Texas are seeing record demand. The state offers a diverse range of investment opportunities, from major metro areas like Dallas and Houston to fast-growing suburban and college towns that provide excellent rental income potential.

What makes Texas stand out? The affordability, strong economy, and high rental demand create a perfect storm for investors who want to build long-term wealth. Whether you’re interested in single-family rentals, multifamily units, or short-term Airbnb investments, Texas has options to fit every strategy.

Here’s why Texas is the best place to buy a rental property in Texas:

• Explosive Population Growth & High Rental Demand
• No State Income Tax & Landlord-Friendly Laws
• Booming Job Market & Strong Economy
• Affordable Home Prices With High ROI Potential
• Growing Tourism Industry & Airbnb Opportunities

Each of these factors plays a major role in making Texas a top destination for rental property investors. Up next, we’ll break down why these factors matter and how they can impact your real estate investment strategy.

Read Also: Best Places To Buy Rental Property In 2025 For Investors

Explosive Population Growth & High Rental Demand

Texas is experiencing one of the fastest-growing populations in the U.S., making it a prime market for rental property investors. The state added over 473,000 new residents between 2022 and 2023, surpassing 30 million people for the first time. With an influx of young professionals, families, and retirees, the demand for rental housing is skyrocketing. Cities like Austin, Dallas, and Houston are seeing record-high occupancy rates, making them some of the best places to buy rental property in Texas.

For investors, this means lower vacancy rates, steady rental income, and long-term appreciation potential. Since many newcomers choose to rent before buying, landlords benefit from a consistent stream of tenants. Whether you're looking for urban apartments or suburban single-family homes, the best places in Texas to buy rental property offer a combination of high demand and strong investment returns.

No State Income Tax & Landlord-Friendly Laws

One of the biggest financial advantages of investing in Texas real estate is the lack of a state income tax. Unlike many other states, Texas does not tax rental income, allowing landlords to keep more of their earnings and reinvest in additional properties. This is a significant benefit for investors focused on long-term wealth building, as it increases overall cash flow and profitability.

Whether you're buying in Dallas, Austin, or Houston, every dollar saved on taxes can be used for property improvements, portfolio expansion, or paying down mortgages faster—making Texas the best place in Texas to buy a rental property for investors seeking high returns.

Beyond tax benefits, Texas is also known for its landlord-friendly laws, making it easier to manage rental properties compared to other states. Eviction processes are relatively swift, with landlords able to remove non-paying tenants in as little as three weeks, depending on the circumstances. Security deposit regulations are flexible, and there are no state-imposed rent control laws, allowing landlords to adjust rents based on market demand.

This investor-friendly environment has helped Texas rank among the best states to buy rental property—especially for those looking to maximize profits while minimizing regulatory hurdles.

Read Also: Top Landlord-Friendly States 2025: Where to Invest Now

Booming Job Market & Strong Economy

Texas boasts a robust economy, with a gross state product of $2.1 trillion as recently as 2023, making it the second-largest in the U.S. The state added over 284,000 jobs from December 2023 to December 2024, reflecting a 2.0% annual growth rate. This economic vitality is a magnet for professionals across various sectors, leading to increased demand for rental properties.

For landlords, this translates to higher occupancy rates and the potential for increased rental income. Cities like Dallas, Houston, and Austin are particularly attractive, offering diverse opportunities for real estate investors. The state's favorable business environment and ongoing economic expansion make it one of the best places to invest in rental property. Whether you're considering urban centers or emerging markets, Texas provides a dynamic landscape for profitable real estate investments.

Affordable Home Prices With High ROI Potential

Investing in Texas real estate offers a compelling opportunity due to its combination of affordable home prices and attractive rental income. As of 2024, the average home value in Texas is approximately $299,982. On the rental side, the average monthly rent is around $1,875.

To understand the potential return on investment, let's break down the cash-on-cash return. This metric compares the annual pre-tax cash flow to the total cash invested. Here's a simplified example:

• Annual Rental Income: $1,875 (average monthly rent) × 12 months = $22,500
• Annual Expenses: Assuming 50% of rental income goes toward expenses (maintenance, property management, taxes, etc.), that's $22,500 × 0.5 = $11,250
• Net Annual Income: $22,500 (income) - $11,250 (expenses) = $11,250

If you finance the property with a 20% down payment:

• Down Payment: $299,982 × 0.2 = $59,996.40
• Cash-on-Cash Return: $11,250 (net income) ÷ $59,996.40 (down payment) ≈ 18.75%

This example illustrates that, even with conservative estimates, Texas properties can yield a substantial return, making it an attractive market for both new and seasoned investors.

Growing Tourism Industry & Airbnb Opportunities

Texas is experiencing a significant surge in tourism, making it an attractive market for short-term rental investments. This influx of tourists has led to a thriving short-term rental market, particularly in cities like Austin and Houston.

In Austin, short-term rentals boast an average occupancy rate of 51% and a daily rate of $290, resulting in an annual revenue of around $24,626 per property. Similarly, Houston's short-term rentals maintain a 48% occupancy rate with a daily rate of $178, generating approximately $14,000 annually. These figures highlight the lucrative potential for investors in Texas's short-term rental market.

Investors can capitalize on this trend by offering well-located, quality accommodations to meet the growing demand from tourists. With the state's tourism industry continuing to expand, short-term rental properties in Texas present a promising opportunity for substantial returns.

Read Also: How to Start Investing in Real Estate with No Money in 2025

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Top 15 Best Places To Buy Rental Property In Texas

With its booming population, business-friendly environment, and strong rental demand, Texas is a hotspot for real estate investors. Whether you’re looking for high-cash-flow properties, long-term appreciation, or short-term rental opportunities, knowing the best places to buy rental property in Texas can make all the difference.

Some areas stand out for their affordable home prices and high rental yields, while others offer steady appreciation and strong job growth that attract long-term renters. Investors looking for the best place to buy a rental property in Texas will find opportunities in both major metropolitan areas and smaller, emerging markets.

From fast-growing cities to hidden gems, here are the best places to buy rental property in Texas in 2025:

1. Austin: Booming tech industry, rapid appreciation, and strong rental demand
2. Houston: Affordable home prices, diverse economy, and high rental yields
3. Dallas: Major business hub, steady home appreciation, and job market growth
4. San Antonio: Strong military presence, tourism demand, and affordable investments
5. Fort Worth: Expanding population, high occupancy rates, and rising property values
6. Arlington: High demand for student housing and Airbnb rentals
7. Plano: Corporate job growth, excellent schools, and rising rental rates
8. Corpus Christi: Coastal tourism, vacation rental demand, and affordable housing
9. El Paso: Low home prices, stable economy, and strong rental cash flow
10. Lubbock: Texas Tech University fuels consistent student rental demand
11. McAllen: Fast-growing population and high rental yield potential
12. Waco: Revitalizing economy, rising home values, and strong short-term rental market
13. Frisco: Rapid growth, high-income residents, and appreciating home values
14. Tyler: Affordable housing, stable rental demand, and economic growth
15. Round Rock: Thriving job market, great schools, and rising home prices

Now, let’s explore why each of these cities is a prime market for rental property investment.

Read Also: How To Buy Your First Rental Property: A Step By Step Guide

Austin, TX

Austin is a standout choice for real estate investors in Texas. As of 2024, the average home value in Austin is approximately $514,193, reflecting a 3.8% decrease over the past year. On the rental side, the average monthly rent is around $1,995.

To assess the investment potential, let's consider the cash-on-cash return. Assuming a 20% down payment of about $102,839, the annual rental income would be $23,940 ($1,995 × 12). Estimating annual expenses (maintenance, property management, taxes, etc.) at 50% of rental income, that's $11,970, leaving a net annual income of $11,970. Dividing this net income by the initial investment yields a cash-on-cash return of approximately 11.6%, indicating a promising return for investors.

Beyond the numbers, Austin's booming tech industry has significantly boosted the city's economy, leading to increased demand for rental properties. This influx of well-paid professionals has heightened the demand for quality rental housing, making Austin a compelling choice for real estate investment.

Looking ahead, Austin's rental market remains strong, with continued population growth and a thriving job sector driving demand. The city's expanding infrastructure and business-friendly environment will likely sustain property appreciation, making now a great time to invest before prices climb again.

Houston, TX

Houston is a gret place to consider buying rental properties in Texas. As of December 2024, the median home price in Houston is approximately $337,000, reflecting a 3.6% increase from the previous year. The average monthly rent for an apartment is around $1,355.

To estimate the cash-on-cash return, consider a 20% down payment of $67,400. This results in an annual rental income of $16,260 ($1,355 × 12). Assuming annual expenses (maintenance, property management, taxes, etc.) are 50% of the rental income ($8,130), the net annual income would be $8,130. Dividing this by the initial investment of $67,400 yields a cash-on-cash return of approximately 12%.

Houston's diverse economy, encompassing energy, healthcare, aerospace, and technology sectors, contributes to a stable and growing job market, which in turn supports a robust rental demand.

Single-family homes in suburban neighborhoods are particularly attractive to families seeking quality education and amenities, while apartments and condos in urban areas appeal to young professionals. Looking ahead, Houston's ongoing economic diversification and population growth suggest a promising future for rental property investments.

Dallas, TX

Dallas is a compelling choice for real estate investors in Texas. As of December 2024, the median home value in Dallas is approximately $305,646, reflecting a slight decrease of 0.5% over the past year. The average monthly rent stands at $2,040.

To estimate the cash-on-cash return, consider a 20% down payment of about $61,129. This would result in an annual rental income of $24,480 ($2,040 × 12). Assuming annual expenses (maintenance, property management, taxes, etc.) are 50% of the rental income ($12,240), the net annual income would be $12,240. Dividing this by the initial investment of $61,129 yields a cash-on-cash return of approximately 20%, indicating a promising opportunity for investors.

Dallas's status as a major business hub, with a diverse economy encompassing finance, technology, and healthcare, contributes to strong job growth and a steady influx of residents, bolstering rental demand. Single-family homes in suburban areas are particularly attractive to families seeking quality education and amenities, while apartments and condos in urban centers appeal to young professionals. Looking ahead, Dallas's economic vitality and population growth suggest a promising future for rental property investments.

San Antonio, TX

San Antonio is undeniably one of the best places to buy rental property in Texas, offering a rare mix of affordability, economic growth, and high rental demand. As of December 2024, the median home value in San Antonio is approximately $251,098, making it one of the most affordable major cities in the state. With an average monthly rent of around $1,692, investors can generate solid cash flow, particularly in high-demand areas like Alamo Heights and Stone Oak.

Beyond affordability, San Antonio's economy is booming, driven by major employers in healthcare, military, and cybersecurity. The city continues to attract young professionals and families looking for an affordable alternative to Austin and Dallas, increasing demand for rentals.

Investors looking for the best place to buy a rental property in Texas should consider single-family homes and duplexes, which perform well in this market. With a growing population and a thriving job market, San Antonio remains one of the best places to buy rental property in Texas for long-term returns.

Fort Worth, TX

Fort Worth is rapidly emerging as one of the best places to buy rental property in Texas, thanks to its affordable home prices, strong job market, and growing rental demand. The median home value in Fort Worth is approximately $298,113, while the average monthly rent sits around $2,031. This balance between affordability and rental income potential creates solid cash flow opportunities for investors looking to maximize their returns.

The city’s economy is thriving, with major industries like aerospace, manufacturing, and logistics fueling job growth. Fort Worth is also experiencing a population surge as people seek more affordable living compared to nearby Dallas, increasing demand for rentals.

Investors targeting long-term appreciation should consider single-family homes, while multi-family properties near downtown and cultural districts are ideal for high rental yields. With steady job growth and rising property values, Fort Worth remains one of the best places in Texas to buy rental property for investors seeking both stability and strong ROI.

Arlington, TX

Arlington is easily one of the best places to buy rental property in Texas, and here’s why—it’s right between Dallas and Fort Worth, packed with entertainment, and has a steady stream of renters. With AT&T Stadium, Globe Life Field, and Six Flags Over Texas drawing millions of visitors each year, short-term rentals can thrive here.

But it’s not just about vacationers—Arlington is home to a growing workforce and students from the University of Texas at Arlington, making long-term rentals just as strong.

Home prices hover around $312,502, while average rents sit at roughly $2,115 per month, meaning investors can see solid cash flow. The city’s economy is booming with jobs in healthcare, education, and tech, keeping rental demand high. Whether you’re looking at single-family homes in quiet neighborhoods or multi-family units near campus, Arlington offers plenty of ways to build long-term wealth in Texas real estate.

Plano, TX

Plano is hands down one of the best places in Texas to buy a rental property, especially if you're looking for high-end renters and long-term stability. Sitting just north of Dallas, Plano is home to some big-name companies like Toyota, JPMorgan Chase, and Liberty Mutual, meaning a steady flow of well-paid professionals looking for quality rentals.

The median home value sits around $511,087, while the average rent is about $2,600 per month—giving investors a solid return, especially in desirable neighborhoods.

If you’re wondering what types of rentals do best in Plano, single-family homes in top-rated school districts and luxury apartments near corporate offices are prime choices. Families and professionals want high-end finishes, good amenities, and a safe, convenient location.

Looking ahead, Plano isn’t slowing down—job growth is strong, and demand for rentals isn’t going anywhere. Whether you're after appreciation or steady passive income, Plano is a best place in Texas to buy rental property for both.

Corpus Christi, TX

If you’re looking for a coastal market with solid rental demand and a lower barrier to entry, Corpus Christi should be on your radar. Unlike pricier Texas cities, you can still snag a single-family home near the coast or a multi-unit property downtown for around $215,186—well below the state average. With average rents around $1,595 per month, landlords here can generate consistent cash flow, especially with the city’s steady influx of renters.

One big perk? Corpus Christi’s booming tourism industry. Whether it's beachgoers, fishing enthusiasts, or spring breakers, short-term rentals near the waterfront stay booked year-round. Meanwhile, the presence of Texas A&M University-Corpus Christi ensures strong demand for student housing.

Looking ahead, the city’s economy—driven by the port, oil and gas, and hospitality industries—is growing, making it one of the best cities to buy rental property in Texas for both short-term and long-term investors looking to cash in.

El Paso, TX

El Paso might not be the first city that comes to mind for real estate investing, but savvy investors are paying attention—and for good reason. With home prices hovering around $223,200 and rents averaging $1,550 per month, it’s one of the few major Texas cities where you can buy a rental property without breaking the bank. That means you can get in at a lower price point while still pulling in solid rental income.

One of the biggest perks? Fort Bliss, one of the largest military bases in the U.S., keeps rental demand steady year-round. Military families, government employees, and contract workers all need housing, making single-family homes and townhomes great investment choices. Plus, with El Paso’s economy growing in logistics, healthcare, and manufacturing, demand isn’t slowing down anytime soon.

For investors looking for affordability, steady tenants, and future growth, El Paso is easily one of the best cities in Texas for real estate investing and one of the best places to invest in real estate in Texas right now.

Lubbock, TX

Lubbock might not be a household name for real estate investors, but that’s exactly what makes it one of the best under-the-radar Texas rental property investment opportunities. Home to Texas Tech University, Lubbock has a built-in demand for rental housing, with over 40,000 students needing a place to live every year. This makes student housing, duplexes, and small multi-family properties excellent investment choices, as the turnover is consistent, and rental demand stays strong.

Beyond the university, Lubbock’s diverse economy—rooted in healthcare, agriculture, and manufacturing—is drawing more long-term renters. With a median home price of around $200,114 and average rents near $1,399 per month, investors can find properties with solid cash flow potential.

As Lubbock continues to grow and attract new industries, it’s becoming one of the top Texas real estate investment locations for investors looking for affordability, strong rental demand, and long-term appreciation potential.

McAllen, TX

McAllen is one of those under-the-radar cities that real estate investors should be paying more attention to. It’s one of the most affordable places to know where to buy rental property in Texas, with median home prices around $221,270—far below what you’d pay in Austin or Dallas. Yet, rents still average around $1,300 per month, giving investors an opportunity to secure high cash flow at a lower entry cost.

What makes McAllen even more interesting is its booming economy tied to international trade, healthcare, and retail. With its location near the Mexico border, it's a major hub for business, drawing in workers who need rental housing. Single-family homes and small multi-family properties tend to perform best here, as families and professionals look for affordable living options.

Looking ahead, as trade and commerce expand, so will housing demand—making McAllen a Texas rental property market worth considering for long-term growth and stable returns.

Waco, TX

Waco might not be the flashiest city in Texas, but for real estate investors, it’s a hidden gem. With home prices hovering around $189,643 and average rents close to $1,500 per month, it’s a place where your investment dollar stretches further.

The real game-changer? Baylor University. With thousands of students needing housing every year, there’s a steady demand for single-family homes and multi-bedroom rentals near campus.

But Waco isn’t just a college town—it’s a city on the rise. Tourism is booming thanks to Magnolia Market, drawing millions of visitors annually, and industries like healthcare and manufacturing are creating jobs and attracting long-term residents. This blend of student renters, young professionals, and families makes Waco a prime location for both short-term and long-term rental investments. If you’re looking for an affordable, high-demand market, Waco is one of the best areas in Texas to buy investment property before prices climb even higher.

Frisco, TX

Frisco isn’t just one of the best places to buy rental property in Texas—it’s one of the fastest-growing cities in the entire country. With a booming economy, top-rated schools, and an influx of corporate headquarters, Frisco has become a magnet for families and high-income professionals. The median home price is around $671,173, but with average rents surpassing $2,800 per month, investors can still find strong cash flow opportunities.

For rental property investors, single-family homes in master-planned communities tend to perform exceptionally well, attracting long-term tenants willing to pay a premium for good schools and safe neighborhoods. Luxury apartments near The Star and Legacy West also offer great returns, thanks to young professionals moving in for high-paying jobs in tech, finance, and healthcare.

Looking ahead, Frisco's population is expected to keep climbing, which means home values and rents will likely follow. For investors seeking long-term appreciation and steady cash flow, Frisco remains one of the best places in Texas for rental income properties.

Tyler, TX

Tyler, Texas, is an underrated gem when it comes to the best places to buy rental property in Texas. Known as the “Rose Capital of America,” Tyler offers more than just scenic beauty—it has a strong and growing economy driven by healthcare, education, and manufacturing.

The median home price sits around $246,095, making it far more affordable than major metro areas, while average rents hover around $1,500 per month, creating solid cash flow opportunities for investors.

For those looking to invest, single-family homes in suburban neighborhoods tend to perform well, attracting families who want affordability with access to good schools and medical centers. Additionally, duplexes and small multi-family properties near the University of Texas at Tyler provide consistent rental demand from students and faculty.

As more Texans look for affordable alternatives to the expensive Dallas market, Tyler is becoming a sought-after spot for both homeowners and renters. With a steady population increase and rising property values, it’s no surprise that Tyler is one of the best cities in Texas to buy rental property in 2025 for investors seeking both affordability and long-term appreciation.

Round Rock, TX

If you're looking for a rental market with serious growth potential but without the chaos of a major metro, Round Rock, Texas, should be on your radar. Just 20 miles north of Austin, this city has become a hotspot for professionals and families who want the perks of big-city living without the sky-high housing costs. Dell Technologies and other major employers keep the job market strong, which means a steady flow of well-paid renters.

Right now, the median home price in Round Rock is around $425,833, while the average rent is approximately $2,100 per month. That’s a solid setup for investors looking for consistent cash flow. Single-family homes in family-friendly neighborhoods tend to be in high demand, while townhomes and condos near business hubs attract young professionals.

Looking ahead, Texas real estate market trends in 2025 point to continued expansion in Round Rock. With Austin’s prices pushing people outward, rental demand here isn’t slowing down anytime soon. For investors, that means high occupancy rates, appreciation potential, and long-term rental stability—a win-win all around.

The Best Places To Buy Rental Property In Texas: FAQ

Investing in Texas real estate offers plenty of opportunities, but knowing the best places to buy rental property in Texas requires careful research. Whether you're looking for high cash flow, appreciation potential, or strong tenant demand, understanding the ins and outs of rental property investing can help maximize your returns. Below, we answer some of the most common questions investors have when considering Texas as their next real estate market.

What are the best places to buy rental property in Texas for cash flow?

Cities like San Antonio, Houston, and Fort Worth offer strong rental demand and affordable property prices, making them excellent choices for high cash flow rental properties. These markets have lower median home prices compared to other major metros in Texas, allowing investors to generate solid cash-on-cash returns.

Where can I find the highest appreciation rates for rental properties in Texas?

Austin, Dallas, and Frisco are among the best places to buy rental property in Texas if you’re looking for long-term appreciation. These cities have seen double-digit price growth in recent years, fueled by tech expansion, corporate relocations, and population increases.

Is Texas a good state for Airbnb and short-term rental investments?

Yes, Texas has several top Airbnb markets, including Austin, Dallas, and Galveston, where tourism and business travel drive high occupancy rates. Investors looking for short-term rental income should focus on cities with popular attractions, festivals, and strong visitor demand.

How much money do I need to invest in a Texas rental property?

The cost of investing depends on the location, but many Texas markets still offer affordable entry points. With median home values around $300,000 to $400,000 in cities like San Antonio and Houston, investors may need $60,000 to $80,000 for a 20% down payment on a conventional loan.

What makes Texas one of the best states to buy rental property?

Texas offers a business-friendly environment, no state income tax, strong job growth, and an expanding population, all of which create high rental demand. With a mix of affordable home prices, high ROI potential, and landlord-friendly laws, Texas remains one of the best places to invest in rental property in 2025 and beyond.

Final Thoughts On The Best Places To Buy Rental Property In Texas

These are many of the best places to buy rental property in Texas, offering investors a unique mix of affordability, strong rental demand, and long-term appreciation potential. With a booming economy, landlord-friendly laws, and a diverse range of rental markets, Texas continues to be a top choice for real estate investors. Whether you're looking for cash flow, appreciation, or short-term rental opportunities, Texas has it all—making now the perfect time to invest!

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Ready to Take the Next Step in Real Estate Investing? Join our FREE live webinar and discover the proven strategies to build lasting wealth through real estate.

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*Disclosure: Real Estate Skills is not a law firm, and the information contained here does not constitute legal advice. You should consult with an attorney before making any legal conclusions. The information presented here is educational in nature. All investments involve risks, and the past performance of an investment, industry, sector, and/or market does not guarantee future returns or results. Investors are responsible for any investment decision they make. Such decisions should be based on an evaluation of their financial situation, investment objectives, risk tolerance, and liquidity needs.