Temple vs Killeen for Real Estate Investors:
Which Market Actually Wins?

If you're an out-of-state investor looking at Central Texas, you've probably already narrowed it down to two cities: Temple and Killeen. They sit 30 minutes apart on I-14, they share the same MSA, and on paper they look similar. But they are fundamentally different investment markets.

Killeen is a cash flow machine powered by Fort Cavazos, the largest active-duty military installation in the western hemisphere. Temple is a long-term appreciation play anchored by Baylor Scott & White Medical Center, the largest non-profit healthcare system in Texas. One gives you higher monthly income today. The other gives you more exit strategies and equity growth over time.

I'm Taylor Dasch with EG Realty — I'm a licensed agent and active investor with $27M+ in transactions across flips, BRRRR, buy-and-hold, and mid-term rentals in both markets. Here's the head-to-head comparison so you can decide which one fits your portfolio.

How Do the Numbers Compare?

Here's where the two markets stand as of late 2025. The gap in entry price is the first thing every investor notices — but it's the downstream effects of that gap that actually determine your returns.

Who's Renting in Each Market?

The tenant base is where these two markets diverge the most — and where most out-of-state investors don't do enough homework before buying.

Killeen tenants are predominantly military. Service members receive a Basic Allowance for Housing (BAH) that essentially guarantees rent payment — it's government-backed income. The tradeoff is turnover. Military families rotate every 2–3 years, which means more frequent make-ready costs, leasing fees, and brief vacancy windows between tenants. With that said, the pipeline never stops. Fort Cavazos cycles thousands of service members in and out every year, so demand stays consistent.

Temple tenants are predominantly medical professionals. Nurses, technicians, residents, and support staff at Baylor Scott & White and the VA Hospital. These tenants tend to stay longer — many of my clients have had the same tenant since closing. The challenge is that once you get above $1,500/month in rent, it can take a little longer to place a tenant because medical professionals in that income range often choose to buy instead of rent.

Taylor's Take

Taylor Dasch · EG Realty

Temple wins on tenant quality in my experience. Less turnover, tenants who take better care of the property, and more stable long-term occupancy. But Killeen wins on speed of placement — the military pipeline fills vacancies fast, especially under $1,500/month. I've seen Killeen units lease within a week of listing. In Temple above $1,500, budget two to three weeks.

Cash Flow vs Appreciation: What Does the Data Show?

Killeen will almost always beat Temple on cash flow. The math is straightforward: lower purchase price means a lower mortgage payment, and strong rental demand means consistent income. You can get into the Killeen market at $150K–$180K for a solid 3-bed brick/slab home that rents for $1,300–$1,500/month. That's hard to replicate in Temple at those price points.

Temple wins on appreciation — and it's not close historically. Temple's housing stock is more owner-occupied, which drives prices up. Killeen is more investor-owned, which compresses values. Temple also benefits from a more diversified employer base: Baylor Scott & White, the VA, Wilsonart International (1,300+ employees), McLane Company (1,000+ employees), and H-E-B Distribution (900+ employees). When your local economy doesn't depend on a single federal budget line item, your property values are more resilient.

Taylor's Take

Taylor Dasch · EG Realty

I like Temple because you still get cash flow AND you have more exit strategies. I've needed that flexibility — I've been on Plan D on a deal before and still came out fine because Temple gives you options. If you do a tight rehab in Killeen and need to pivot, the exit is harder. In Temple, you can flip it, BRRRR it, rent it long-term, convert to mid-term for travel nurses, or sell to a retail buyer. That flexibility has saved me real money on deals that didn't go according to plan.

What Are the Real Carrying Costs?

Texas has no state income tax — the tradeoff is property taxes. Bell County (which covers both Temple and Killeen) has an effective rate of 1.88%, which is actually competitive compared to the major metros.

Insurance is another factor investors underestimate. The Temple/Killeen area averages about $3,400/year for homeowners insurance — significantly less than coastal Texas cities. Houston averages $8,700 and Corpus Christi hits $13,000. Being inland eliminates the hurricane premium that eats into returns in Gulf markets.

Taylor's Take

Taylor Dasch · EG Realty

Out-of-state investors always ask me about taxes first. Yes, Texas property taxes are higher than some states — but run the total math. No state income tax on your rental income, no state capital gains tax when you sell, and insurance costs that are half of what you'd pay in Houston or on the coast. On a $300K property, you're paying $1,290 less per year in taxes than you would in Houston's Harris County. That's over $100/month straight to your bottom line.

Where Should You Buy in Each Market?

Top Neighborhoods in Temple

Top Neighborhoods in Killeen

Taylor's Take

Taylor Dasch · EG Realty

A lot of investors are nervous about pier and beam homes — I get it. But in Temple, pier and beam is where you find the best deals. They're cheaper to purchase, easier to rehab than people think (leveling is not as expensive as the internet makes it sound), and they rent extremely well. If you want brick slab and zero foundation anxiety, Killeen has great options in the $150K–$180K range. Both strategies work — just depends on your comfort level and how hands-on you want to be.

Two Strategies for Building Wealth in Both Markets

You don't have to pick one or the other. Here are two strategies I've seen work — and used myself.

Taylor's Take

Taylor Dasch · EG Realty

If I was starting over today with zero properties, I'd do Strategy 1. Get the cash flowing assets in Killeen first so you have income while you learn the flip game. The biggest mistake I see new investors make is jumping straight into flips without a cash flow safety net. The Killeen rentals give you that cushion while you figure out your process in Temple. I just had an investor who wholesaled a deal in Temple and did very well on it — and he had Killeen rentals covering his bills the whole time.

How Does Central Texas Compare to Austin, Dallas, and Houston?

If you're looking at Texas real estate, you've probably priced out Austin already. Here's how Temple-Killeen stacks up against the major metros.

Austin's median home price is nearly double Temple's ($543K vs $290K) and cap rates have compressed to the point where cash flow is almost impossible without significant capital. Temple-Killeen gives you the I-35 corridor growth at a fraction of the cost — and Redfin data shows that Austin buyers are the #1 source searching for Temple homes. The spillover is already happening.

Data sources: Bureau of Labor Statistics, Zillow, Redfin, Realtor.com, Bell County Appraisal District, Texas Real Estate Research Center. Market data as of Q4 2025.
Taylor Dasch | EG Realty | templetxhomes.net | Temple, TX