Temple TX Rental Market Analysis 2026
Cap rates, cash flow projections, and neighborhood-level rent data from an agent who owns rental property in this market. No theory. Real numbers.
How Is the Temple TX Rental Market Performing in 2026?
As of March 2026, Temple TX is a buyer-favorable rental market with median home values at $246,538 (down 2.5% year-over-year) and average 3-bedroom rents holding at $1,500–$1,700 per month on long-term leases. The 7.2% vacancy rate sits within the healthy range, and homes take 39–59 days to go pending—giving investors negotiation leverage that did not exist 18 months ago. Population growth of 3.14% annually, driven by Baylor Scott & White Health (8,800+ employees), Fort Cavazos (36,000+ active-duty), and Meta's incoming data center, keeps rental demand structurally strong despite the broader Texas softening.
- Rent trend: Overall median apartment rent $972/month, down 2.8% YoY (Apartment List, Jan 2026)
- Renter share: 46% of Temple's 28,276 housing units are renter-occupied (13,028 units)
- Affordability edge: Temple rents are 19% below the national median
- Military demand: Fort Cavazos BAH increased 13.9% in 2025 + 4.2% in 2026
- MTR premium: Furnished rentals near BSW command 43–100% more than unfurnished leases
- Investor score: Zip 76502 rates 753/1,000 with 5,101-unit housing deficit
What Are Typical Rents in Temple TX by Property Type?
The median apartment rent in Temple TX is $972 per month as of January 2026, representing a 2.8% year-over-year decline according to Apartment List. Single-family rents run higher, particularly for 3- and 4-bedroom homes that attract military families and BSW staff. Temple remains 19% below the national median rent, which makes it competitive for out-of-state investors comparing cash flow across Texas markets.
| Property Type | Avg. Monthly Rent (LTR) | Furnished MTR Range | YoY Change | Best Tenant Profile |
|---|---|---|---|---|
| Studio / 1-Bedroom Apt | $869–$1,135 | $1,200–$1,600 | -2.8% | BSW residents, single military |
| 2-Bedroom Apt/Duplex | $1,200–$1,399 | $1,800–$2,400 | -2.0% | Young couples, PGY-1 residents |
| 3-Bedroom SFH | $1,500–$1,700 | $2,500–$3,500 | -1.5% | Military families (E-5/E-6 BAH), travel nurses |
| 4-Bedroom SFH | $1,700–$2,100 | $3,000–$4,200 | Flat | Fort Cavazos E-7+, BSW attendings, contractors |
Sources: Apartment List, Zillow Rental Manager, Furnished Finder, local MLS • Data as of Q1 2026
The sweet spot for cash-flow investors is the 3-bedroom single-family home in the $180,000–$240,000 purchase range. These properties rent fast (under 21 days to lease in 76502), attract stable tenants with BAH or W-2 income, and require the least capital to furnish if you pivot to MTR.
What's Driving Rental Demand in Temple TX?
Temple's rental demand rests on three institutional pillars that insulate it from the boom-bust cycles hitting Austin and Dallas: healthcare, military, and infrastructure expansion. As of 2026, the city's population has reached 96,267—a 16.27% increase since the 2020 census—and is growing at 3.14% annually, roughly triple the national average.
Baylor Scott & White Health
BSW Medical Center in Temple is the flagship hospital of the largest nonprofit health system in Texas. With 8,800+ employees in the Temple campus alone, BSW generates constant demand for both permanent housing and 13-week travel nurse contracts. In January 2026, BSW and Select Medical opened a new 45-bed inpatient rehabilitation hospital in Temple, adding clinical positions and drawing additional traveling medical professionals. PGY-1 residents earn approximately $70,993 annually (2025–2026 stipend), and most rent rather than buy during their 3–7 year training programs.
Fort Cavazos (Formerly Fort Hood)
Located less than 30 miles from Temple, Fort Cavazos is the largest active-duty armored post in the United States with 36,000+ active-duty personnel and tens of thousands of family members and civilian employees. The 2026 BAH rate for an E-5 with dependents is $1,695/month, while an E-7 with dependents receives $2,070/month. Fort Cavazos BAH saw a 13.9% increase in 2025 followed by an additional 4.2% increase in 2026—reflecting the DoD's recognition of rising housing costs in the Killeen-Temple corridor. Military families overwhelmingly prefer renting in Temple over Killeen for school quality and proximity to retail and medical care.
Meta Data Center & Infrastructure Pipeline
Meta broke ground on a 700-acre Hyperscale Data Center in Temple with construction running through fall 2026. Phase 1 will employ 30 full-time workers, with Phase 2 adding 10 positions by 2029. While the direct job count is modest, the construction phase employs hundreds of temporary workers who need furnished housing, and the facility signals institutional confidence in Temple's infrastructure. FedEx Ground also operates a distribution center in Temple, contributing to the logistics employment base.
The real demand play for investors isn't one employer—it's the layering effect. A 3-bedroom home in 76502 can be leased to a BSW travel nurse for $3,200/month in Q1, a Meta construction contractor for $2,800/month in Q2–Q3, and a military family on a 12-month lease at $1,650/month if the MTR pipeline slows. Multiple demand sources = lower effective vacancy risk.
What Does a Typical Temple TX Rental Investment Look Like?
A realistic buy-and-hold deal in Temple TX produces $150–$350 per month in net cash flow on a conventional 25% down purchase, assuming full property tax burden and 8% management. Below is a line-by-line underwriting of a representative 3-bedroom, 2-bath single-family home in the 76502 zip code—the numbers I actually run for my investor clients.
Acquisition & Financing
Monthly Cash Flow (LTR)
At 6.75% interest and full Temple property tax burden ($4,905/year on a $225,000 assessed value), most conventional-financed LTR deals in Temple do not cash flow at current prices. This is the honest reality. You make money in Temple through (1) appreciation in a 3%+ annual growth market, (2) principal paydown ($3,400/year in year 1), (3) pivoting to MTR for higher rents, or (4) buying below market via off-market deals or light value-add rehab. The investors who get hurt are the ones underwriting to the seller's homestead-exempted tax bill instead of the full investor rate.
Additional Upfront Costs
Monthly Cash Flow (MTR @ 80% Occupancy)
What Are the Best Neighborhoods for Rental Properties in Temple?
Temple's rental performance varies sharply by zip code and proximity to the two primary demand generators: BSW Medical Center (2401 S 31st Street) and the I-35 corridor connecting to Fort Cavazos. As of Q1 2026, the 76502 zip code carries an investor score of 753 out of 1,000 with a documented 5,101-unit housing deficit and 24.1% projected growth. Here is how the key areas break down for rental investors.
West Temple / Lake Pointe
South Temple / I-35 Corridor
Bella Terra / North Temple
Prairie Ridge
Legacy Ranch
Temple Historic District
What Are the Hidden Costs Investors Miss in Temple TX?
Property taxes are the single largest expense that kills deal underwriting in Temple TX—and the #1 cost investors miscalculate. The effective rate in Temple is approximately 2.18%, but the total combined rate (city + county + school + special districts) pushes the annual bill on a $225,000 property to roughly $4,905. Here is every cost line you need to model accurately.
Never underwrite a rental deal using the seller's property tax amount. If the seller has a homestead exemption, their tax bill may be 30–50% lower than what you will pay as an investor. The City of Temple's FY2026 rate is $0.6999 per $100 of assessed value (an 11.72% increase from FY2025). Bell County's rate is $0.3125 per $100. Always calculate your tax at the full assessed value—the Bell County Appraisal District will reassess the property at market value after the sale.
| Expense Category | Monthly Estimate | Annual Estimate | Notes |
|---|---|---|---|
| Property Taxes (full investor rate) | $409 | $4,905 | 2.18% effective rate on $225K assessed value |
| Landlord Insurance | $155–$208 | $1,860–$2,500 | 15–20% higher than homeowner policy; hail zone premium |
| Property Management | $89–$165 | $1,068–$1,980 | Flat rate (ProManage $89/mo) or 8–10% of rent |
| Vacancy Allowance (7%) | $116 | $1,386 | Based on $1,650 rent × 7.2% market vacancy |
| Maintenance / CapEx Reserve | $83–$125 | $1,000–$1,500 | 5–8% of rent; higher for pre-1990 homes |
| HOA (if applicable) | $40–$80 | $480–$960 | Bella Terra, Legacy Ranch, Lake Pointe have HOAs |
| Yard / Pest / HVAC Filter | $75–$100 | $900–$1,200 | Often overlooked; required in most leases |
The most common mistake I see from out-of-state investors: they look at the Zillow listing, see property taxes of $2,800/year (seller's homestead-exempted amount), and underwrite to that number. Then Bell CAD reassesses the property post-sale and the real bill comes in at $4,900+. That $2,100 annual gap turns a positive cash flow deal into a money loser. Always call Bell CAD (254-939-5841) or use the Bell CAD tax rate chart to calculate the real number before you close.
Is Temple TX Better for Long-Term Rentals or Medium-Term Rentals?
Mid-term rentals near Baylor Scott & White generate 43% to 100% more gross revenue than the same property on a 12-month lease, according to local Furnished Finder data and my own portfolio experience. A 3-bedroom home that rents for $1,700/month unfurnished can command $2,500–$3,500/month furnished for travel nurses on 13-week contracts. But the higher revenue comes with real trade-offs.
Advantages
Stable, predictable income. Tenant pays all utilities. Lower turnover costs. Minimal landlord involvement. Property management is straightforward. No furnishing budget required. Easier to finance and insure.
Disadvantages
At current interest rates (6.5–7%), most LTR deals in Temple do not cash flow after all expenses. Rent growth has been flat to slightly negative (-1.5% to -2.8% YoY). Eviction process in Texas takes 30–60 days. Limited ability to adjust rent between leases without losing tenants.
Ideal tenant profile: Military families with BAH (guaranteed government income), BSW permanent staff, Temple ISD teachers, FedEx/logistics workers.
Best neighborhoods: Prairie Ridge, South Temple, West Temple older inventory.
For a deeper comparison with full financial models, see my Mid-Term vs Long-Term Rental in Temple TX analysis.
What Mistakes Do Out-of-State Investors Make in Temple TX?
I have closed over $27M in transactions in this market, and the out-of-state investors who lose money almost always make the same five mistakes. These are not theoretical—I have watched each one cost real people real money in the last 12 months.
1. Underwriting to the Seller's Tax Bill
Already covered above, but it bears repeating: the seller's homestead exemption reduces their tax bill by 30–50%. Your bill will be $4,905+ on a $225,000 property, not the $2,800 you see on the listing. This single error swings cash flow by $175/month.
2. Ignoring Insurance Costs in Hail Alley
Temple sits in one of the most active hail corridors in the United States. Landlord insurance runs $1,860–$2,500 per year—15 to 20% higher than a standard homeowner policy. Some carriers have pulled out of Central Texas entirely after consecutive hail seasons. Budget $175–$210/month minimum and get quotes from at least three carriers before you close. If you have a claim history, expect significantly higher premiums.
3. Buying in the Wrong Zip Code for Their Strategy
A 76504 property does not perform the same as a 76502 property. If you are targeting travel nurse MTRs, you need to be within 10 minutes of BSW Main (2401 S 31st St)—that means 76502, not 76504. If you are targeting military LTR tenants, 76504 and south Temple offer better price-to-rent ratios. Buying a $300,000 home in Bella Terra for a BAH-backed LTR makes no financial sense when E-5 BAH is $1,695/month.
4. Assuming Zillow Rent Estimates Are Accurate
Zillow's Rent Zestimate for Temple properties is consistently 8–15% higher than actual market rents. I see investors underwriting to $1,850/month on a 3-bedroom because Zillow said so, then struggling to find a tenant at $1,650. Always pull recent closed leases from the MLS—not automated estimates—before making an offer.
5. Skipping the Foundation Inspection on Pre-1990 Homes
Central Texas sits on expansive clay soil. Foundation movement is not a matter of if but when on older homes. A $450 foundation inspection saves you from a $12,000–$25,000 pier repair. Temple Historic District and older South Temple inventory is particularly high-risk. Do not skip this inspection to save money or speed up closing.
For the complete out-of-state playbook, read my Austin vs Temple ROI Comparison and the Investing in Temple TX guide.
"Temple is not a cash flow market at 6.75% interest. It is an equity growth market with cash flow optionality through MTR—and that distinction matters."
I am going to be blunt with you because I think investors deserve honesty over hype. If you are buying a $225,000 house in Temple with 25% down at today's rates, putting a long-term tenant in it, and expecting $200/month cash flow—you will be disappointed. The math does not work at current interest rates and full property tax burden. Every "Temple TX is a great cash flow market" article that says otherwise is either using the seller's homestead-exempted tax number or ignoring vacancy and maintenance.
But here is what Temple actually is: a 3%+ annual population growth market with institutional demand drivers (BSW, Fort Cavazos, Meta) that are not going anywhere. Home values are down 2.5% year-over-year right now, which means you can negotiate 5–8% below asking on properties that have been sitting 45+ days. Pair that with an MTR strategy near BSW, and the same property that bleeds $360/month as an LTR generates $400+/month positive cash flow as a furnished travel nurse rental.
The investors I work with who are building real wealth in Temple are doing one of three things: (1) buying below $200K in south Temple, doing light cosmetic rehab, and renting to military families at price-to-rent ratios that actually work, (2) buying in 76502 within 10 minutes of BSW and running furnished MTRs on Furnished Finder, or (3) buying newer construction in Bella Terra or Legacy Ranch and playing the appreciation game with a premium tenant who treats the property well. Pick the strategy that fits your capital, your time, and your risk tolerance—but pick one. "I want cash flow AND appreciation AND passive AND no money down" does not exist in 2026.
Have a specific property in mind? Text Taylor directly →
Frequently Asked Questions: Temple TX Rental Market
As of March 2026, average rents in Temple TX range from $869 for a studio to $1,564 for a 3-bedroom apartment. The overall median apartment rent is $972 per month, which is 19% below the national median. Single-family 3-bedroom homes rent for $1,500–$1,700 on long-term leases and $2,500–$3,500 as furnished mid-term rentals near Baylor Scott & White.
The rental vacancy rate in Temple TX is approximately 7.2% as of early 2026. This falls within the healthy range of 5–8%, indicating normal turnover without excessive oversupply. Renters occupy 46% of Temple's housing stock, totaling roughly 13,028 rental units across the city.
Temple TX offers strong fundamentals for rental investors: median home values around $246,500 with robust demand from BSW Health's 8,800+ employees and Fort Cavazos military families, plus population growth exceeding 3% annually. Cap rates on buy-and-hold deals typically range from 5.5% to 7.5%. The primary risk is Texas property taxes at a 2.18% effective rate, which significantly impacts cash flow at current interest rates.
The effective property tax rate in Temple TX is approximately 2.18% of assessed value. The City of Temple's FY2026 rate is $0.6999 per $100 of assessed value, and Bell County's rate is $0.3125 per $100. On a $250,000 property, expect $5,300–$5,600 annually. Investors do not receive the homestead exemption, so the bill will be significantly higher than what the current owner pays.
The 2026 Basic Allowance for Housing at Fort Cavazos is $1,695/month for an E-5 with dependents, $1,530 for an E-5 without dependents, and $2,070 for an E-7 with dependents. BAH rates increased 13.9% in 2025 and received an additional 4.2% bump in 2026, reflecting strong local housing demand in the Killeen-Temple corridor.
Property management fees in Temple TX range from a $89/month flat rate (ProManage) to 8–10% of monthly rent for full-service management. Short-term and vacation rental management starts at 15% of revenue. Most investors budget 8–10% of gross rent, which equates to $120–$170/month on a typical single-family rental earning $1,500–$1,700.
Mid-term rentals near BSW Hospital generate 43–100% more gross revenue than long-term leases on the same property. A 3-bedroom renting for $1,700/month unfurnished can command $2,500–$3,500/month furnished for travel nurses. However, MTRs require $8,000–$15,000 in upfront furnishing, owner-paid utilities ($150–$250/month), and more active management with quarterly turnovers.
The best neighborhoods depend on your strategy. West Temple and Lake Pointe (76502) offer the strongest MTR demand from travel nurses at BSW. South Temple (76504) provides the lowest entry points under $200,000 with solid LTR cash flow from military and blue-collar tenants. Bella Terra and Legacy Ranch deliver premium appreciation and high-end MTR rents but have lower cap rates due to higher purchase prices.
Ready to Run the Real Numbers on a Temple TX Rental?
I underwrite every deal the same way I underwrite my own: full tax burden, real vacancy, actual insurance quotes. No surprises after closing.
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