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 MLS Temple median DOM 70 (12 months), 57 (May 18–Aug 28, 2026)—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 Hood (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 Hood 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. 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 |
|---|---|---|---|
| Studio / 1-Bedroom Apt | $869–$1,135 | $1,200–$1,600 | -2.8% |
| 2-Bedroom Apt/Duplex | $1,200–$1,399 | $1,800–$2,400 | -2.0% |
| 3-Bedroom SFH | $1,500–$1,700 | $2,500–$3,500 | -1.5% |
| 4-Bedroom SFH | $1,700–$2,100 | $3,000–$4,200 | Flat |
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) 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 Hood (Formerly Fort Hood)
Located less than 30 miles from Temple, Fort Hood 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 Hood 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.
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.
How Do the LTR and MTR Investment Examples Compare?
The examples below show how financing and operating costs affect one hypothetical $240,000 purchase. They are illustrations, not a property appraisal, verified rent forecast or typical neighborhood return. The long-term rental (LTR) example produces a 2.5% cap rate before financing and negative cash flow after debt service. The furnished mid-term rental (MTR) example depends on an assumed $3,000 monthly rent at full occupancy and 80% paid occupancy; it runs about -$40 per month after the listed expenses and debt service. A change in strategy does not guarantee a profit.
Acquisition & Financing
Monthly Cash Flow (LTR)
This example uses a 6.75% interest assumption and the Temple/Temple ISD 2026 adopted combined tax rate of 2.4244% on the $240,000 price with no exemptions: $485 a month, or $5,819 a year (Bell County tax database, read September 24, 2026; parcels inside Temple in Belton ISD or Academy ISD pay 2.4802% and 2.4946%). The operating lines are the site’s standard model, the same one behind the Temple cap-rate page: insurance estimated at $2.05 per square foot, 8% management on collected rent, 8% vacancy plus 1% credit loss, 5% routine maintenance, leasing and turnover, owner-paid utilities between tenants, and a separate 5% capital reserve. Using the displayed rounded amounts, LTR net operating income is $506 per month before the reserve: $6,072 a year divided by $242,400 (price plus 1% closing) gives a 2.5% cap rate, or 2.1% after the reserve. Subtracting the $88 reserve and $1,168 in monthly principal and interest leaves a $750 monthly shortfall. Replace the rent, financing, insurance and tax assumptions with property-specific evidence before making an offer.
Additional Upfront Costs
Monthly Cash Flow (MTR @ 80% Occupancy)
Underwriting examples re-run September 25, 2026 on the site’s standard operating model with the 2026 adopted tax rate, the same model as the Temple cap-rate page; the market-data dates elsewhere on this page are unchanged. Model notes: MTR net operating income is $1,128 per month before debt service. Annual NOI of $13,536 divided by the $240,000 purchase price is 5.6% (5.6% on price plus 1% closing). Annual cash flow of -$480 divided by $79,200 cash invested ($67,200 acquisition cash plus $12,000 furnishing/setup allowance) is -0.6%. The $12,000 allowance is illustrative; the furnishing and setup ranges above can cost more. Break-even paid occupancy is 81.5% at the assumed $3,000 full-occupancy rent, with management and routine maintenance varying with collected rent and the other listed costs held fixed. Management is a model allowance, not a furnished-rental management quote.
Both examples exclude HOA dues, tenant placement/renewal fees, major repairs and capital replacements, and initial rehabilitation. MTR also excludes unlisted platform or booking fees. These costs reduce the cash available to the owner. Cap rate excludes financing and is not cash-on-cash return; closing costs and furnishing costs are included in the cash-on-cash denominator above, not the cap-rate denominator. The LTR model charges management on collected rent and routine maintenance, leasing and the capital reserve on scheduled rent; the MTR model charges management and maintenance on collected rent. These are explicit example assumptions, not a like-for-like market cap-rate survey.
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 Hood. 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 can materially change a rental investment result. Temple properties do not all share one combined tax rate: the parcel’s taxing units, taxable values and applicable exemptions matter. The $485 monthly figure below is the Temple/Temple ISD 2026 adopted combined rate of 2.4244% on a $240,000 price with no exemptions ($5,819 a year); the same house in Belton ISD or Academy ISD inside Temple pays 2.4802% or 2.4946%. Confirm the parcel’s own taxing units and values before relying on either investment example.
Do not assume the seller’s tax bill will apply to your rental ownership. Review the parcel’s current Bell CAD values, taxing units and exemptions, then confirm which exemptions or appraisal limitations would apply after a change in ownership and use. A sale does not automatically make the purchase price the taxable value. Texas generally values taxable property as of January 1; see the Texas Comptroller’s valuation guidance and Bell CAD adopted tax rates and exemptions.
| Expense Category | Monthly Estimate | Annual Estimate | Notes |
|---|---|---|---|
| Property Taxes (2026 adopted rate) | $485 | $5,819 | 2.4244% Temple/Temple ISD on $240,000, no exemptions; Belton ISD 2.4802%, Academy ISD 2.4946%; verify the parcel |
| Landlord Insurance | $256 | $3,072 | Site estimate at $2.05 per sq ft on 1,500 sq ft (pre-2000 roofs nearer $2.35); published Texas landlord policies run about $1,500–$3,200; quotes required |
| Property Management | $89–$165 | $1,068–$1,980 | Flat rate (ProManage $89/mo) or 8–10% of rent |
| Vacancy (8%) + Credit Loss (1%) | $158 | $1,896 | 9% of $1,750 scheduled rent; monthly figure rounded |
| Maintenance / CapEx Reserve | $176 | $2,112 | 5% routine repairs plus a 5% capital reserve on $1,750; budget more for pre-1990 homes |
| Leasing / Turnover | $86 | $1,032 | Half a month’s rent per new tenant every two years plus $600 make-ready |
| Owner Utilities Between Tenants | $42 | $504 | Water, electric and mowing while vacant |
| 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 |
A tax bill shown in a listing may reflect exemptions or appraisal limits that do not apply to the next owner. Compare the current parcel record with your intended ownership and use, and budget for uncertainty until the estimate is confirmed. Use the Bell CAD tax rate chart together with the parcel record; a single citywide percentage or the purchase price alone is not enough.
Is Temple TX Better for Long-Term Rentals or Medium-Term Rentals?
Furnished mid-term rentals can have higher advertised monthly rents than unfurnished long-term leases, but advertised rent is not collected annual income. Compare paid occupancy, management, furnishing, utilities, turnover and maintenance using the same purchase and financing assumptions. In this page’s illustration, $3,000 at full occupancy becomes $2,400 of average monthly rent at 80% paid occupancy; the listed costs leave a shortfall of about $40 per month after debt service.
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.
Demand drivers: BAH-backed Fort Hood households, BSW permanent staff, Temple ISD employees, 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 $20M+ in closed real estate volume, 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
The seller’s bill can reflect exemptions or appraisal limits that may not apply to your rental ownership. Verify the parcel’s taxable values and taxing units rather than using the listing’s tax figure or assuming a fixed percentage. The $4,968 annual amount in this page’s example is an allowance to replace, not a promised tax bill.
2. Ignoring Insurance Costs in Hail Alley
Temple sits in one of the most active hail corridors in the United States. Landlord insurance runs $1,920–$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 $160–$210/month minimum for LTR ($175+ for furnished MTR) 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.
“A 5% cap rate is a property-level underwriting target, not a promise about every Temple rental. Compare matched rents, the purchase price and the full operating budget before choosing LTR or MTR.”
For the hypothetical $240,000 purchase above, 25% down and the stated 6.75% financing assumption produce negative LTR cash flow under the listed operating budget. That is a result for these inputs, not proof that every Temple rental loses money. A lower price, different financing or better verified operating performance can change the outcome. The $4,968 annual tax allowance must be replaced with a parcel-specific estimate.
But here is what Temple actually is: a 3%+ annual population growth market with institutional demand drivers (BSW, Fort Hood, 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. In the illustration above, adding an MTR strategy changes the modeled monthly cash flow from -$750 to -$40, a $710 difference after adding management and routine maintenance. That narrower modeled shortfall still requires 80% paid occupancy and excludes the additional costs listed below the example; it is not a guaranteed return.
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 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. 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 rental investments need property-specific underwriting. A 5% cap rate is a target to test, not a typical return established by this page. The illustrative $240,000 purchase shows a 2.5% long-term-rental cap rate and a 5.6% furnished mid-term cap rate under different operating assumptions, both on the site’s standard model with the 2026 adopted tax rate. Those examples are not a market range: the MTR result assumes $3,000 monthly rent at full occupancy and 80% paid occupancy. After the stated financing, MTR cash flow is about -$40 per month before HOA, placement fees, major repairs, capital replacements and other excluded costs. Neither strategy guarantees a profit.
Temple properties do not all share one combined property tax rate. Check the parcel’s current Bell CAD taxable values, taxing units and exemptions, and confirm which exemptions or appraisal limits would apply to your ownership and use. The examples on this page use the 2026 adopted combined rates: 2.4244% for a Temple parcel in Temple ISD, 2.4802% in Belton ISD and 2.4946% in Academy ISD (Bell County tax database, September 24, 2026), applied to the purchase price with no exemptions. Do not assume the seller’s bill will continue; a sale does not automatically reset taxable value to the purchase price, but an investor should plan on full market value with no cap.
The 2026 Basic Allowance for Housing at Fort Hood 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.
Compare collected annual income and all operating costs, not just advertised monthly rent. This page’s MTR illustration assumes $3,000 monthly rent at full occupancy and 80% paid occupancy, producing $2,400 of average monthly rent. After the listed operating expenses and debt service, cash flow is about -$40 per month, with an 81.5% paid-occupancy break-even point before excluded costs. Furnishing, management, utilities, turnover, HOA, placement fees and capital replacements can change the result. A furnished strategy does not guarantee positive cash flow.
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 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?
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