Where Should You Invest in Texas Real Estate? Temple vs Austin vs San Antonio vs DFW (2026 Data)

If you're an out-of-state investor looking at Texas in 2026, you've probably heard the pitch: no state income tax, booming population, landlord-friendly laws. All true. But what most out-of-state investors don't hear until their first P&L statement arrives is the other side — property taxes north of 2%, insurance premiums that can wipe out a year of cash flow after one hailstorm, and rental markets that have softened across 61% of Texas cities.

I'm Taylor Dasch, a real estate agent and active buy-and-hold investor in Temple, Texas. I personally own rental properties here — flips, BRRRRs, and long-term holds. I also work with out-of-state investors every week who are evaluating Texas markets. This comparison is based on current 2026 data, and I'm going to be honest about all four markets — including the one I live in.

By the end of this guide, you'll know exactly which Texas market fits your investment strategy, your budget, and your risk tolerance.

---

How Do Texas Markets Compare for Rental Investors in 2026?

Here's the side-by-side comparison using current data:

The numbers tell the story. But let me break down what they actually mean for your money.

---

Is Temple TX a Good Place to Invest in Real Estate?

Temple is where I invest my own money, and here's why.

At a median price of $260,000, Temple offers the lowest entry point of any market in this comparison. You can acquire nearly two investment properties in Temple for the price of one comparable home in Austin. That's not just a price advantage — it's a risk management strategy. Two doors in Bell County means if one property goes vacant, the other is still generating revenue. One vacancy on a $490,000 Austin property means 100% revenue loss. Learn more about Investing In Temple TX Here

What drives the Temple market:

Baylor Scott & White Medical Center is the economic engine. It's the 11th largest hospital in Texas with over 8,800 employees and constantly expanding. This creates a steady pipeline of nurses, physicians, residents, and medical staff who need rental housing — creditworthy tenants with stable employment who tend to stay for medium-to-long terms. See the full breakdown of where BSW employees live by neighborhood here.

The I-35 logistics corridor adds a second layer. Companies like Niagara Bottling and East Penn Manufacturing have invested heavily in the area. Meta's data center and Rowan Digital's campus represent over $1.5 billion in infrastructure investment. These aren't temporary boosts — they're long-term economic anchors.

Population growth is projected at 7% through 2029, fueled by migration from more expensive markets like Austin where the cost of living has pushed workforce populations northward.

The honest downside: Bell County property taxes are the highest of the four markets at approximately 2.6% effective rate. On a $260,000 property, that's roughly $6,760 per year or $563 per month. That single line item can consume nearly 35% of your gross rental income. Annual tax protests are essential — not optional.

Cash flow reality at today's numbers:

For a $260,000 home renting at $1,600/month in neighborhoods like Canyon Creek, Western Hills, or Cimarron:

Now here's where the buy box matters. I don't tell investors to buy at the median price — I tell them to buy where the math works. My recommended buy box for Temple is $170,000–$185,000 in established neighborhoods like Canyon Creek, Cimarron, and Western Hills. These are 1980s-built brick 3-bed 2-bath homes that rent for $1,400–$1,600/month. Here's what that actually looks like:

That's positive cash flow from day one with conservative reserves baked in. When rates drop to 5.5%, that jumps to +$131/month. At 5.0%, it's +$172/month. And that doesn't account for the equity your tenant is building for you every month or the appreciation in a growing market. My recommended buy box is $170K–$185K in established neighborhoods like Canyon Creek, Cimarron, and Western Hills."Properties in this price range lease in 1–2 weeks at the $1,600 price point, and there's no HOA in these investor-friendly neighborhoods. See for Yourself: Analyze Deals Here

---

Should You Invest in Austin Real Estate in 2026?

Austin is the appreciation play for patient capital — but it's not a cash flow market in 2026.

The median home sits at $489,253, which is nearly double Temple's entry price. After a 6.4% correction from peak pricing, Austin is technically "on sale" compared to 2022. But "on sale" in Austin still means you need $125,000+ in capital just to get in the door at 25% down.

The supply problem: Developers delivered over 18,000 apartment units in 2024 alone. Vacancy rates went from historic lows around 4% to nearly 10% by late 2025. Rents dropped 3.6% to 5% as a result. For single-family rental investors, that apartment glut creates direct competition — why would a tenant pay $2,374 for your 3-bedroom rental when a brand-new apartment down the street is offering two months free?

The eviction risk: Travis County has the slowest eviction process of any market in this comparison. Where Bell County (Temple) processes evictions in 21–30 days, Travis County proceedings can drag to 60–90 days or longer. Legal aid resources are robust and tenant advocacy groups are active. For an out-of-state investor, a 90-day non-paying tenant in a $490,000 property is a serious financial hit.

Austin's STR restrictions: If you're considering short-term rentals as an exit strategy, Austin has banned non-owner-occupied STRs (Type 2) in residential zones. That limits your flexibility significantly compared to Temple or San Antonio.

Why investors still buy Austin: The tech sector. Tesla, Oracle, Apple, and Samsung continue expanding. Buying at today's corrected prices is a classic contrarian play — acquiring assets at 2021 prices with next-decade growth potential. But you need deep pockets and a 5–10 year hold minimum. Expect negative or breakeven cash flow for the first 1–3 years while the market absorbs excess inventory.

Bottom line: Austin makes sense if your budget exceeds $500,000, you don't need cash flow, and you're betting on long-term equity growth. If you need your investment to pay for itself from month one, look elsewhere.

---

Is San Antonio a Good Market for Rental Property Investors?

San Antonio is the defensive anchor — the "steady Eddy" of Texas real estate.

At $265,000 median price, San Antonio's entry point is almost identical to Temple's. But the dynamics are different. Where Temple is a high-yield play, San Antonio is a stability play.

What makes San Antonio defensive: Joint Base San Antonio (JBSA) — which includes Lackland AFB, Fort Sam Houston, and Randolph AFB — anchors the economy. Military tenants receiving Basic Allowance for Housing (BAH) offer the gold standard of income stability. The check comes from the federal government regardless of what the local economy does.

Rent performance: San Antonio held up better than any other market in this comparison during the 2025 correction. Rents dipped only 1.5% year-over-year compared to Austin's 5% decline and DFW's 4.4% drop. Median rents of $1,500–$1,750 provide decent but not spectacular returns.

Property taxes: Bexar County's effective rate of 2.0%–2.2% is slightly lower than Bell County and significantly lower than parts of DFW. On a $265,000 property, you're looking at approximately $5,800 per year — nearly $1,000 less than a comparable Temple property.

The tradeoff: San Antonio won't give you a home run. Appreciation has been modest and price movement is essentially flat (-0.02%). You're buying stability, not growth. The market is balanced at 3–4 months of inventory, so you also don't have the negotiation leverage you get in Temple's 5.4-month buyer's market.

Best sub-markets for investors: The Northwest side (outside Loop 1604, near SeaWorld and UTSA) and the Northeast corridor near Randolph AFB. These areas attract military families and offer newer inventory with steady rental demand.

Bottom line: San Antonio works if your budget is $300,000–$400,000, you prioritize low volatility over high returns, and you value the reliability of military-backed tenants. If you want more cash flow or more appreciation, Temple and Austin respectively offer better opportunities in those categories.

---

Is Dallas-Fort Worth Worth It for Rental Investors?

DFW is the blue-chip growth engine of Texas — but it comes with operational costs that can gut your returns.

The metroplex is a corporate relocation machine with a massive, diverse tenant pool. It's consistently the number one market for institutional capital. If you're thinking like a REIT, DFW makes sense. If you're an individual investor running your own numbers, it's more complicated.

Entry price: Rental-grade inventory runs $340,000–$400,000, putting DFW between Temple's affordability and Austin's premium pricing. Builder closeouts in outer-ring suburbs like Celina, Princeton, and Forney are creating opportunities to acquire new construction at discounted prices.

Rents are high but falling: Median rents of $2,000–$2,200 look attractive on paper. But DFW saw the steepest rent correction of any market at -4.4% in 2025. Combined with high expenses, the net picture is less appealing than the gross numbers suggest.

The "hail tax" — DFW's hidden killer: This is the single biggest factor most out-of-state investors miss. DFW sits in "Hail Alley." Insurance premiums run $2,500–$3,500 annually — sometimes higher — with separate 2% wind/hail deductibles that are now standard. For a $400,000 property, that 2% deductible means $8,000 out of your pocket before insurance pays a dime for roof damage. One hailstorm can wipe out two to three years of positive cash flow. That's not an exaggeration — it's a line item you need to underwrite.

Property taxes compound the problem: Effective rates of 2.2%–2.7% across Dallas and Tarrant counties create an estimated annual tax bill of roughly $8,500 on a median investment property. Combined with the insurance premium, your fixed operating costs in DFW are the highest of any market in this comparison.

Eviction timeline: Moderate at 30–45 days — better than Austin, but slower than Temple or San Antonio.

Bottom line: DFW makes sense for investors with an institutional mindset who are scaling a portfolio and can absorb hail risk. It offers maximum liquidity — easy to buy, easy to sell. But individual investors seeking cash flow will find better net returns in Temple or San Antonio where the operating expense burden is significantly lower.

---

What Are the Biggest Mistakes Out-of-State Investors Make in Texas?

After working with dozens of out-of-state investors, these are the mistakes I see repeatedly:

Mistake #1: Underwriting insurance at national averages. Texas insurance costs are 61% higher than the national average. If you're budgeting $100/month for insurance on a Texas rental, you're going to be shocked. Budget $125–$250/month minimum, and avoid properties with roofs older than 10 years — insurers may deny coverage or force an actual cash value policy that pays only depreciated value on claims.

Mistake #2: Ignoring the property tax protest. Property taxes in Texas are not a fixed cost — they're a variable cost you can manage. Out-of-state investors often accept the county appraisal as fact. It's not. It's an opinion. Protest every single year, either yourself or through a contingency-based protest firm that charges roughly 50% of the savings they secure. If they save you nothing, you pay nothing.

Mistake #3: Using median price as your buy box. The median home price in any Texas market is not where investors should be buying. The median includes primary residences, new construction, and luxury homes that will never cash flow as rentals. Your buy box should be based on rent-to-price ratio, not the market median.

Mistake #4: Not accounting for CAD revaluation on investment properties. Homestead owners in Texas get a 10% annual cap on assessed value increases. Investment properties don't. If your $180,000 purchase appreciates to $240,000, the county can — and will — reassess at the higher value, increasing your tax bill by 33% in a single year. Budget for this.

Mistake #5: Assuming all of Texas is landlord-friendly. Texas has a reputation as a landlord-friendly state, and it largely is — except in Travis County (Austin). Eviction timelines there can run 60–90 days, and STR regulations are the strictest in the state. Temple, San Antonio, and most of DFW are significantly more efficient for landlords.

---

Which Texas Market Fits Your Investment Strategy?

If you need cash flow and your budget is under $200,000 per property:
Temple. Buy in the $170K–$185K range in Canyon Creek, Cimarron, or Western Hills. These are 1980s brick 3-bed 2-bath homes that rent for $1,400–$1,600/month with no HOA. Properties lease in 1–2 weeks. Positive cash flow from day one at current rates with a clear path to stronger returns when rates drop.

If you're building long-term equity and your budget exceeds $500,000:
Austin suburbs (Round Rock, Leander, Buda). Buy the correction. Distressed inventory and builder closeouts in Williamson and Hays counties offer 2021-level pricing with next-decade growth potential. Avoid Travis County if eviction timelines concern you. Expect breakeven or negative cash flow for 1–3 years.

If you prioritize stability above all else:
San Antonio's Northwest side or Northeast corridor near Randolph AFB. Military BAH tenants are the most reliable income stream in Texas real estate. Low volatility, low drama, modest but consistent returns.

If you're scaling a portfolio with institutional capital:
DFW's outer-ring new construction (Celina, Princeton, Forney). Maximum liquidity and tenant demand. Budget aggressively for insurance and hail reserves. Not ideal for individual investors seeking net cash flow.

---

Why Do Investors Choose Temple Over Larger Texas Markets?

It comes down to three numbers: entry price, rent-to-price ratio, and operational speed.

You can buy two cash-flowing properties in Temple for the price of one property in Austin that doesn't cash flow. Your eviction timeline is 21–30 days instead of 60–90. Your DSCR loan qualifies at standard 25% down because the rent-to-price ratio works — in Austin, you may need 35–40% down just to meet the lender's coverage requirement.

Temple isn't the right market for everyone. It won't give you Austin-level appreciation or DFW-level liquidity. But for the buy-and-hold investor who needs their investment to generate positive cash flow from day one while building equity in a growing market, Temple is the strongest play in Texas in 2026.

I work with out-of-state investors every week. I set up custom property searches matching your buy box, film video walkthroughs of every property, run the real numbers on each deal, and manage properties at 5% — half the industry standard. I invest here myself because the math works. Check out the impact of the new Meta Data Center HERE

📞 (254) 718-4249
📧 [email protected]
🏠 Search Temple Investment Properties
📅 Schedule an Investor Consultation

---

Taylor Dasch | EG Realty | Temple, Texas
Real estate agent and active investor specializing in buy-and-hold rental properties in Temple, Belton, Killeen, and Harker Heights.