76502 Investor Guide: The Data-Driven Breakdown
Buy-and-hold fundamentals, cap rate math, and neighborhood-level analysis — March 2026 data
What Makes 76502 the Premier Investment Zip Code in Central Texas?
Zip code 76502 is the southern growth corridor of Temple, TX — the zip where population growth, institutional capital, and healthcare employment converge. With a population of 56,493, a median age of just 33.8 years, and annualized growth of 5.2%, this is the demographic profile buy-and-hold investors target: young, employed, and growing. Median household income exceeds $68,204, driven primarily by Baylor Scott & White's 8,800+ employee base and Fort Hood military personnel drawing BAH.
The investment thesis is straightforward: BSW Medical Center isn't leaving, Fort Hood isn't closing, and the data center boom (Rowan + Meta combined $1.5–$2B) is injecting construction-phase demand into the rental market right now. The question isn't whether 76502 has demand. It's whether the math works at today's prices. This guide answers that question neighborhood by neighborhood.
What Does the 76502 Housing Market Look Like for Investors in 2026?
The blended median sale price across 76502 sits at approximately $295,000 with resale homes trading at $171/sqft. Days on market have stretched to 92–119 days depending on the price tier, and the months of supply currently reads 5.4 months — technically balanced but trending toward buyer-favorable. The sale-to-list ratio is 98.4%, and 62.8% of homes are selling under list price. For investors, this means negotiating leverage exists. Use it.
The takeaway: 76502 is not a hot market where investors compete against owner-occupants in bidding wars. It's a value market where patience, negotiation, and the right neighborhood selection determine returns. The deal analyzer will show you exactly where the math breaks even — and where it doesn't.
What Are Realistic Rental Returns in 76502?
The 3BR median rent in 76502 is $1,695/month. A 4BR commands approximately $1,995/month at the top of market. Year-over-year rent growth is negative 5% to 7.5% — rents are compressing, not expanding. New construction inventory flooding the south Temple corridor is suppressing rental pricing power across all bedroom counts. Investors must underwrite a 5–8% vacancy factor minimum.
This is the critical data point most investor-friendly agents won't tell you: rents are falling. The combination of new construction lease-up pressure and rising inventory has shifted the rental market from landlord-favorable to tenant-favorable. If your pro forma assumes $1,800/month for a 3BR and 3% annual rent growth, you're going to be underwater. Underwrite conservatively. Use today's rents, not yesterday's. For a full breakdown, see the 2026 Temple rental market analysis.
What Cap Rate Can You Realistically Expect in 76502?
On a conventional long-term rental at the median purchase price of $295,000, the unlevered cap rate lands at approximately 2.74% after realistic expense assumptions. That's below the 10-year Treasury yield. The math is honest and it's not pretty for buy-and-hold at full market price. Here's the full NOI breakdown:
Income & Purchase
Annual Expenses
A 2.74% cap rate means the long-term rental math does not work at median price with conventional financing. You need to either (a) buy significantly below market, (b) add value through renovation, or (c) pivot to a higher-yield strategy.
Mid-Term Rentals Near BSW: 8–12% Cap Rates
The mid-term rental (MTR) strategy — 30+ day furnished leases targeting traveling nurses, BSW residents, and locum tenens physicians — is where the cap rates get interesting. Properties within a 10-minute BSW commute radius, furnished and listed on Furnished Finder or Airbnb (30+ day minimum), are pulling 8–12% unlevered cap rates in the current market. The tenant demand is institutional: BSW's 8,800+ employees generate a constant rotation of housing needs. This strategy requires higher upfront furnishing costs ($8–15K per unit) and more active management, but the return differential justifies it. See the out-of-state investor guide for remote management frameworks.
Which 76502 Neighborhoods Have the Best Investor Fundamentals?
Not all 76502 neighborhoods are created equal for buy-and-hold investors. Academy ISD commands a premium that compresses cap rates. Temple ISD resale neighborhoods offer better rent-to-price ratios but carry older housing stock and higher maintenance. This table breaks down all 13 neighborhoods with investor-relevant metrics. Click any row to expand the assessment.
| Neighborhood | Est. Median | Est. Rent Range | School District | HOA | Investor Rating | |
|---|---|---|---|---|---|---|
| Western Hills | $175K–$240K | $1,400–$1,700 | Temple ISD | None | High | |
| Best rent-to-price ratio in 76502. Established neighborhood with older resale inventory (1970s–1990s builds), no HOA restrictions on rentals, and proximity to BSW for MTR strategy. Factor foundation age and deferred maintenance into your offer price. | ||||||
| Dawson Ranch | $240K–$310K | $1,550–$1,850 | Temple ISD | ~$400/yr | High | |
| Strong investor fundamentals with newer construction (2010s+), moderate HOA, and Temple ISD zoning. Resale pricing allows reasonable rent-to-price ratios. Review HOA CC&Rs for rental minimum lease term requirements before closing. | ||||||
| Hospital District | $150K–$220K | $1,200–$1,600 | Temple ISD | None/Varies | High | |
| Highest cap rate potential in 76502. Older housing stock near BSW main campus is ideal for furnished mid-term rentals targeting traveling nurses and locum physicians. Price point allows cash flow even at conventional financing rates. Expect deferred maintenance and foundation work on some properties. | ||||||
| Brick Haven | $230K–$280K | $1,500–$1,750 | Temple ISD | ~$350/yr | Moderate | |
| Mid-range Temple ISD neighborhood with decent rental demand. Not the best rent-to-price in the zip, but newer builds mean lower near-term maintenance. Verify HOA rental restrictions — some sections have minimum lease terms. | ||||||
| Windmill Farms | $250K–$320K | $1,500–$1,800 | Temple ISD | ~$400/yr | Moderate | |
| Established Temple ISD community with consistent rental demand. The price-to-rent ratio is borderline — works with a below-market acquisition or value-add play. HOA is active; confirm rental policies before underwriting. | ||||||
| Parks at Westfield | $260K–$330K | $1,600–$1,850 | Temple ISD | ~$450/yr | Moderate | |
| Newer construction with good tenant appeal. The numbers work if you negotiate below list in the current buyer-favorable market. Verify HOA stance on investment properties and minimum lease durations. | ||||||
| South Pointe | $280K–$350K | $1,650–$1,900 | Temple ISD | ~$350/yr | Moderate | |
| Stylecraft community with newer inventory. Tenant appeal is strong due to modern finishes, but the new-construction premium compresses cap rates. Best as a PCS conversion strategy for military buyers using VA loans rather than a pure cash-flow play. | ||||||
| Lake Pointe | $310K–$380K | $1,700–$2,000 | Academy ISD | ~$400/yr | Low | |
| Academy ISD premium inflates purchase price beyond what rental income supports. The 0.54–0.58% rent-to-price ratio produces negative cash flow at conventional rates. Owner-occupant neighborhood. Not an investor target. | ||||||
| Hartrick Ranch | $270K–$340K | $1,600–$1,900 | Academy ISD | ~$350/yr | Low | |
| Academy ISD zoning commands a price premium that kills investor math. Better rent-to-price than Lake Pointe or The Homestead due to lower entry point, but still sub-0.6% ratio. VA loan PCS conversion is the only viable investor angle here. | ||||||
| The Homestead | $399K–$479K | $1,850–$2,300 | Academy ISD | ~$250/yr | Low | |
| Stylecraft's premium new-construction community with a 0.52% rent-to-price ratio. This is an owner-occupant neighborhood. The $400K+ entry point guarantees negative cash flow for buy-and-hold investors at any conventional rate. | ||||||
| Prairie Ridge | $350K–$420K | $1,800–$2,100 | Academy ISD | ~$500/yr | Low | |
| Academy ISD premium community. Higher HOA fees and elevated price points make this purely an owner-occupant play. The numbers don't pencil for any investor strategy except long-term appreciation speculation. | ||||||
| Mesa Ridge | $320K–$400K | $1,750–$2,100 | Belton ISD | ~$400/yr | Low | |
| Belton ISD new construction with strong owner-occupant demand. Price tier is too elevated for cash-flow investing. The Belton ISD "A" rating commands a premium that tenants won't pay proportionally in rent. | ||||||
Source: Gemini Deep Research analysis, March 2026. Prices and rents are estimates based on MLS data, public records, and local market intelligence. Verify all numbers during due diligence. For neighborhood-specific deep dives, visit the neighborhood index.
Taylor's Take on 76502 Investing
Taylor Dasch · EG Realty · $27M+ in transactions
Here's the honest breakdown: 76502 is a great zip code to own real estate in. It is not a great zip code to blindly buy a rental at full market price. The cap rate math at the median purchase price produces returns below a savings account. That's not a sales pitch — that's arithmetic.
Where I see the deals: older Temple ISD resale inventory in Western Hills and the Hospital District, priced $150K–$240K, where the rent-to-price ratios actually work. And furnished mid-term rentals within the BSW commute radius, where traveling nurse and physician demand lets you command 40–60% premiums over long-term rates. The MTR strategy is where 76502 shines for investors.
What I tell out-of-state investors: do not buy the newest, shiniest house in an Academy ISD neighborhood and expect it to cash flow. Buy the right house in the right neighborhood at the right price. That usually means older, Temple ISD, and under $275K. Want help running the actual numbers? Text me directly →
How Do Property Taxes Affect Investor Returns in 76502?
Property taxes are the single largest line item in your expense stack. In 76502, tax rates vary significantly based on which ISD your property falls in. There are three ISD configurations, and the difference can swing your annual tax bill by $1,000+ on the same-priced home. Crucially for investors: non-homestead properties (rentals) do not receive the homestead exemptions that owner-occupants get. The 10% appraisal cap does not apply — you're capped at 20% annual increases instead.
Tax Rate by ISD Configuration (2025 Rates)
| ISD Config | Rate | Tax @ $250K | Tax @ $300K |
|---|---|---|---|
| Temple ISD | ~2.35% | $5,875 | $7,050 |
| Academy ISD | ~2.50% | $6,250 | $7,500 |
| Belton ISD | ~2.28% | $5,700 | $6,840 |
MUD / PID Warning
Some newer developments in or near 76502 may carry Municipal Utility District (MUD) or Public Improvement District (PID) assessments that add $200–$400/month on top of the tax rates above. These do not appear on standard tax rate lookups — you must verify at the county level during due diligence. Communities within Temple city limits (Western Hills, Dawson Ranch, Hospital District) do not have MUD/PID fees. For a full breakdown of HOA-level restrictions, see the HOA rental restrictions guide.
Investor tax reality: Without homestead exemptions, your effective rate equals the raw rate. On a $295K rental property in a Temple ISD neighborhood, you're paying approximately $6,930/year in taxes — roughly $578/month before mortgage, insurance, or management. That's why neighborhood selection matters more than headline cap rates. A $50K difference in purchase price between two neighborhoods with the same rent can be the difference between cash flow and monthly losses.
What Economic Drivers Support 76502 Rental Demand?
The investment thesis for 76502 rests on five institutional-grade economic drivers that generate consistent tenant demand. These aren't speculative — they're either operational, funded, or under construction. Here's what's powering the rental pipeline:
Baylor Scott & White Medical Center
Largest employer in Bell County. Generates constant rotation of residents, fellows, traveling nurses, and locum physicians. The BSW relocation pipeline is the single most reliable tenant demand source in 76502.
Fort Hood (III Corps)
Active duty personnel plus dependents and civilian contractors. BAH for E-6 with dependents is $1,920/month — directly subsidizing the rental market. PCS rotations every 2–3 years create perpetual tenant turnover.
Data Center Boom
Rowan ($700M–$1.2B campus) and Meta ($800M facility) are injecting construction-phase workforce housing demand now. Once operational, these facilities generate permanent skilled technician jobs. The investment hub tracks this pipeline.
SeAH Steel Manufacturing
$150M steel manufacturing facility under development. Creates both construction-phase temporary housing demand and permanent blue-collar employment — the tenant demographic that fills 3BR rental inventory in the $1,400–$1,700 range.
I-35 / I-14 Expansion (TxDOT)
Multi-billion dollar highway expansion will take years to complete, generating sustained construction workforce rental demand. Long-term: improved connectivity strengthens Temple's position as the Central Texas logistics hub between Austin, Dallas, and Fort Hood.
What Are the Biggest Risks for 76502 Investors?
Every market has risks. The investors who get hurt are the ones who didn't underwrite them. Here are the five material risks specific to 76502 that should be in every pro forma:
Hail Insurance Crisis
Bell County is in the Texas hail belt. Insurers are repricing aggressively. Standard homeowner policies now carry 2% wind/hail deductibles — on a $300,000 home, that's a $6,000 out-of-pocket expense per hail claim. Annual premium increases of 15–25% are common. Budget $2,100–$2,800/year for insurance on a $300K rental and expect it to rise. This is the fastest-growing expense line in your pro forma.
Expansive Clay Soil & Foundation Risk
76502 sits on Blackland Prairie clay with severe shrink-swell characteristics. Foundation repairs in Central Texas run $10,000–$15,000+ when piers are required. On older resale inventory (pre-2000), get a structural engineer inspection — not just a general home inspector. Budget a foundation maintenance reserve of $1,000–$2,000/year on properties over 15 years old.
Non-Homestead Tax Escalation
Investment properties are capped at 20% annual appraisal increases (vs. 10% for homesteads). In a rapidly appreciating market, your tax bill can jump significantly year over year. You also receive zero homestead exemptions — the full raw rate applies. Model 5–8% annual tax increases in your long-term pro forma.
New Construction Oversupply
Multiple builders (Stylecraft, DR Horton, Centex, KB Home) are delivering hundreds of new rooftops simultaneously across south Temple. This inventory is suppressing both resale values and rental pricing power. The -5% to -7.5% YoY rent decline is a direct consequence. If you're buying resale to rent, you're competing against tenants who can lease brand-new construction at similar rates.
HOA Rental Restrictions
An increasing number of 76502 HOAs are imposing minimum lease terms (6–12 months), rental caps (limiting the % of homes in a community that can be rented), and outright short-term rental bans. You must review the CC&Rs during the option period — not after closing. Some communities that were investor-friendly 3 years ago have since amended their bylaws. See the HOA rental restrictions guide for current policies by neighborhood.
How Does 76502 Compare to Other Bell County Zip Codes?
76502 is one of six investable zip codes in the Temple-Belton-Killeen corridor. Here's how they stack up on the metrics that matter for buy-and-hold investors:
| Zip Code | City | Median Sale | 3BR Rent | Rent-to-Price | DOM | Primary ISD |
|---|---|---|---|---|---|---|
| 76502 | Temple (South) | ~$295K | $1,695 | 0.57% | 92–119 | Temple / Academy / Belton |
| 76501 | Temple (North/Central) | ~$210K | $1,350 | 0.64% | 75–95 | Temple ISD |
| 76504 | Temple (East) | ~$185K | $1,250 | 0.68% | 65–85 | Temple ISD |
| 76513 | Belton | ~$320K | $1,750 | 0.55% | 80–110 | Belton ISD |
| 76542 | Killeen (Central) | ~$225K | $1,450 | 0.64% | 60–80 | Killeen ISD |
| 76548 | Harker Heights | ~$285K | $1,650 | 0.58% | 70–90 | Killeen ISD |
The investor takeaway: 76504 and 76501 offer the best rent-to-price ratios in the corridor. 76502 commands a premium because of its proximity to BSW, Academy ISD schools, and the south Temple growth corridor. For pure cash-flow investors, 76502 is only competitive when you target the Temple ISD neighborhoods at the lower end of the price spectrum or deploy an MTR strategy near BSW. For a full breakdown of investing across the corridor, visit the Temple investment hub.
Frequently Asked Questions: Investing in 76502
The unlevered cap rate for a long-term rental at the median 76502 purchase price of approximately $295,000 is roughly 2.74% after realistic expense assumptions including 5% vacancy, 8% property management, 5% maintenance, $6,490 in property taxes, and $2,100 in insurance. Mid-term rental strategies near BSW Medical Center can achieve 8 to 12% cap rates with furnished 30-plus day leases.
Western Hills, the Hospital District, and Dawson Ranch offer the strongest investor fundamentals in 76502 due to lower entry prices, no or limited HOA restrictions, and better rent-to-price ratios. Academy ISD neighborhoods like Lake Pointe, The Homestead, and Prairie Ridge are priced for owner-occupants and produce negative cash flow for buy-and-hold investors at conventional financing rates.
Property tax rates in 76502 range from approximately 2.28% in the Belton ISD configuration to 2.50% in the Academy ISD configuration. Investment properties do not receive homestead exemptions, so the full raw rate applies. On a $295,000 rental in a Temple ISD area, expect approximately $6,930 per year in property taxes. Non-homestead properties are subject to a 20% annual appraisal cap versus the 10% cap for owner-occupied homes.
The five primary risks are hail insurance cost escalation with 2% deductibles equaling $6,000 on a $300,000 home, expansive clay soil foundation repair costs of $10,000 to $15,000 plus, non-homestead tax escalation at 20% annual caps, new construction oversupply compressing rents by 5 to 7.5% year over year, and increasing HOA rental restrictions limiting investor flexibility in newer communities.
Five institutional economic drivers support 76502 rental demand: Baylor Scott and White Medical Center with 8,800 plus employees generating constant tenant rotation, Fort Hood with approximately 45,000 active duty personnel and BAH subsidized housing budgets, the Rowan and Meta data center projects totaling $1.5 to $2 billion in investment, SeAH's $150 million steel manufacturing facility, and the multi-billion dollar I-35 and I-14 highway expansion creating construction workforce demand.
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