Are you looking to buy an investment property in Texas? If the answer is yes, then you’ve come to the right place!

The Texas housing market was among the most active and vital markets in the past couple of years since the COVID-19 virus broke out.

In 2020 and 2021, there were many changes taking place in Texas that have all left a significant impact on the real estate market there.

And while these changes led to an influx of new buyers pouring into the market, the available inventory could not keep up with the rising demand. This led to home values going up in metro areas like Austin, a trend that has continued throughout 2021.

So, how is the Texas housing market looking now that we’re going into 2022? Is buying rental property in Texas a good idea? How to invest in Texas real estate? And what are the best cities in Texas for a rental property?

Let’s talk about it!

Real Estate Investing in Texas 

As I already mentioned, the Texas housing market saw an influx of new buyers in 2021.

Due to factors such as depressed mortgage rates, people choosing to buy instead of rent during quarantine and beyond, and the government’s easements when it comes to the pandemic effects on homebuyers.

All of these factors played a part in why home sales went up in Texas.

Another understated factor that played a role is the moving of several tech companies to Texas, bringing new jobs and a lot of new employees who moved to be closer to the companies where they worked.

In fact, tech companies such as Apple and Oracle had a major impact on home sales and prices in the Austin real estate market in particular, which led to Austin becoming the #1 target for home buyers during 2021.

In 2021, Austin ranked as the 7th best real estate market in the whole U.S, according to WalletHub, based on key investment indicators such as activity in the real estate market and the strength of the local economy.

This surge of new homebuyers also led to a shortage of inventory in the Austin market, leading homebuyers to find other metropolitan areas to invest their money.

Some of the major cities where homebuyers and investors were buying homes in the past two years include Dallas, Fort Worth, Arlington, Houston, and San Antonio.

Overall, investment property in Texas rose in value by a large margin due to the increased demand and the shortage of inventory.

Data from the research center shows that housing prices in the state of Texas rose by over 30% in 2021 than in 2020.

And while near the end of 2021 the supply of new homes was going back to normal in meeting the demand, home prices are not showing any signs of future depreciation, and they continue to rise although at a slower pace.

All of this brings us to the current state of the Texas housing market – a market full of fresh opportunities for smart and forward-thinking investors who know what all of these signs mean.

Where to Buy Investment Property in Texas

Real estate investors who rode the first wave and bought a house in Austin or one of the other metro areas in Texas a year ago are the biggest winners.

Especially now that the Austin market has turned into a rental investor’s playground and the rental rates are going up, these investors have locked in on lucrative investments that will pay off in the long term.

But if you’re not one of those lucky investors, then perhaps you’ll be happy to know that there are other markets out there where home prices haven’t soared yet, and that make up great investment opportunities for any investor.

If other cities in Texas follow the same trends as the other major cities that we’ve mentioned, then you’re looking at future appreciation in home values as well as increasing rent rates across the state.

Read: 6 Things to Know About Real Estate Appreciation

But if the major metropolitan cities are no longer viable options due to inflated home prices, then how do you know which other cities are good for investing?

This is where a powerful analytics platform that makes future predictions based on data comes into play – enter Mashvisor.

Mashvisor is a real estate investment platform that gathers enormous amounts of data from several trusted and accurate sources across the U.S in order to give you projections about the future performance of each market and property.

Using advanced machine-learning technology and big data, our AI can scan the Texas housing market for the best investment opportunities while also predicting how each property will perform in the future, and this analysis is dynamic and will change as the market’s performance changes and more properties are sold.

Read: 2022 Real Estate Market Forecast: 10 Predictions

Using our data analysis, I have compiled for you a list of the top cities for buying investment property in Texas to be used as an income property using long-term or short-term rental strategies.

Best Rental Markets in Texas

Instead of giving you one list for both rental strategies, I decided to split the list into two – a list of the top five cities for investing in traditional long-term rentals, and another for short-term Airbnb rentals.

Top Cities for Investment Property in Texas – Traditional Rentals

The cities on this list are great options when it comes to finding investment property in Texas to be used as a traditional long-term rental property.

The cities are ranked based on their traditional/long-term cash on cash return based on Mashvisor data, which takes into consideration home prices while also factoring in mortgage payments that you’re expected to pay.

Based on these criteria, these are the top 5 cities for investing in a property in Texas:

#1 Zavalla, Angelina County

  • Median Home Price: $313,487
  • Average Home Size: 162.37 Sq. Ft.
  • Average Traditional Rental Income: $1,250
  • Average Traditional Cash on Cash Return: 7.48%
  • Average Airbnb Rental Income: $1,528
  • Average Airbnb Daily Rate: $157
  • Average Airbnb Cash on Cash Return: 3.04%
  • Occupancy Rate: 40%
  • Walkscore: 20

#2 Colorado City, Mitchell County

  • Median Home Price: $135,119
  • Average Home Size: 79.57 Sq. Ft.
  • Average Traditional Rental Income: $1,334
  • Average Traditional Cash on Cash Return: 6.91%
  • Average Airbnb Rental Income: $1,109
  • Average Airbnb Daily Rate: $141
  • Average Airbnb Cash on Cash Return: 2.56%
  • Occupancy Rate: 38.18%
  • Walkscore: 50

#3 Dublin, Erath County

  • Median Home Price: $301,790
  • Average Home Size: 274.76 Sq. Ft.
  • Average Traditional Rental Income: $1,100
  • Average Traditional Cash on Cash Return: 6.62%
  • Average Airbnb Rental Income: $1,687
  • Average Airbnb Daily Rate: $105
  • Average Airbnb Cash on Cash Return: 4.63%
  • Occupancy Rate: 46.88%
  • Walkscore: 42

#4 Lufkin, Angelina County

  • Median Home Price: $319,154
  • Average Home Size: 159.16 Sq. Ft.
  • Average Traditional Rental Income: $2,214
  • Average Traditional Cash on Cash Return: 6.03%
  • Average Airbnb Rental Income: $2,473
  • Average Airbnb Daily Rate: $105
  • Average Airbnb Cash on Cash Return: 4.31%
  • Occupancy Rate: 62.27%
  • Walkscore: 66

#5 Nocona, Montague County

  • Median Home Price: $253,333
  • Average Home Size: 138.05 Sq. Ft.
  • Average Traditional Rental Income: $1,531
  • Average Traditional Cash on Cash Return: 5.39%
  • Average Airbnb Rental Income: $3,104
  • Average Airbnb Daily Rate: $180
  • Average Airbnb Cash on Cash Return: 6.48%
  • Occupancy Rate: 51.5%
  • Walkscore: 61

Top Cities for Investment Property in Texas – Airbnb Rentals

The cities on this list are great options when it comes to finding investment property in Texas to be used as a short-term Airbnb rental.

The cities are ranked based on their short-term/Airbnb cash on cash return based on Mashvisor data, which takes into consideration home prices while also factoring in mortgage payments that you’re expected to pay.

Based on these criteria, these are the top 5 cities for investing in a property in Texas:

#1 Bishop, Nueces County

  • Median Home Price: $141,929
  • Average Home Size: 85.21 Sq. Ft.
  • Average Traditional Rental Income: $906
  • Average Traditional Cash on Cash Return: 4.27%
  • Average Airbnb Rental Income: $1,525
  • Average Airbnb Daily Rate: $60
  • Average Airbnb Cash on Cash Return: 9.22%
  • Occupancy Rate: 40.2%
  • Walkscore: 42

#2 White Settlement, Tarrant County

  • Median Home Price: $266,035
  • Average Home Size: 167.06 Sq. Ft.
  • Average Traditional Rental Income: $1,292
  • Average Traditional Cash on Cash Return: 2.21%
  • Average Airbnb Rental Income: $3,598
  • Average Airbnb Daily Rate: $168
  • Average Airbnb Cash on Cash Return: 8.37%
  • Occupancy Rate: 60.69%
  • Walkscore: 40

#3 Mt Vernon, Franklin County

  • Median Home Price: $249,044
  • Average Home Size: 121.76 Sq. Ft.
  • Average Traditional Rental Income: $1,543
  • Average Traditional Cash on Cash Return: 3.89%
  • Average Airbnb Rental Income: $3,253
  • Average Airbnb Daily Rate: $403
  • Average Airbnb Cash on Cash Return: 8.17%
  • Occupancy Rate: 46.8%
  • Walkscore: 33

#4 Forest Hill, Tarrant County

  • Median Home Price: $249,591
  • Average Home Size: 157.4 Sq. Ft.
  • Average Traditional Rental Income: $1,388
  • Average Traditional Cash on Cash Return: 3.16%
  • Average Airbnb Rental Income: $3,391
  • Average Airbnb Daily Rate: $290
  • Average Airbnb Cash on Cash Return: 7.92%
  • Occupancy Rate: 59.33%
  • Walkscore: 27

#5 Ennis, Ellis County

  • Median Home Price: $498,533
  • Average Home Size: 193.09 Sq. Ft.
  • Average Traditional Rental Income: $1,545
  • Average Traditional Cash on Cash Return: 0.99%
  • Average Airbnb Rental Income: $5,818
  • Average Airbnb Daily Rate: $218
  • Average Airbnb Cash on Cash Return: 7.83%
  • Occupancy Rate: 71.89%
  • Walkscore: 78

How to Find an Investment Property in Texas

If you’re looking to find an investment property in any of these cities in Texas, then Mashvisor is the tool for you!

In order to find an investment property that matches your search criteria and that makes sense as an investment opportunity, you will normally need to access a large number of listings through a real estate agent or other sources that are available.

Using the listings that you have access to; you will then need to identify the strongest markets with the best opportunities before comparing properties in the market of your choice to determine the best properties for investing.

Mashvisor, however, does all of this for you!

Our platform includes a wide range of tools that can help you find investment property in Texas or anywhere else in the U.S.

Use the property finder to find properties in Texas

Using our Investment Property Finder, you can browse the different markets using a map interface to see where all the properties for sale are located, how they performed in the past, and how they’re projected to perform in the future.

While the Property Marketplace tool gives you a virtual shop where you can look at properties listed for sale on and off-market, along with their prices, rental rates, and more.

Both of these tools can be customized using a selection of filters to help you narrow down your search based on the property’s price, cash on cash return, occupancy rate, or the rental strategy that you want to use.

Additionally, and once you’ve identified one or more properties that you’re interested in, you can then analyze each property for its investment potential using the investment property calculator tool, which lets you calculate each property’s expenses and income streams to give you an idea of what your future investment will look like and how long it will take for it to pay off its price.

All of these tools and more can be accessed with our subscription plans with virtually no restrictions – all to help you make the leap from being a beginner real estate investor to becoming a professional and successful investor.

Texas Housing Market in 2022 – Bottom Line

Finding an investment property in Texas at the start of 2022 is a sound and smart decision.

Based on the market’s trends in the past two years, the Texas housing market is growing rapidly, and it is not coming to a stop any time soon.

If you want to ride the wave and secure your future by buying investment property in Texas, make sure to consider our list of the top cities for investing in the Texas housing market.

Once you’re ready to take your next step by identifying an investment property to buy in your market of choice, make sure to use Mashvisor’s platform to help you find the perfect property for you based on actual data projections and smart analytics.




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