Strong job growth, suburban cash flow plays, MUD tax requires careful underwriting
Balanced market · TX
Investing in Texas rental property
Strong population + job growth, no state income tax, landlord-friendly law. The catch: property taxes are among the highest in the country, and MUD zones push effective rates above 3% in some suburbs.
Property tax
1.68%
effective rate
State income tax
0%
no state tax
Eviction timeline
21-45 days
filing → writ
Landlord friendliness
Strong
based on law
Why investors choose Texas
- No state income tax — keeps more of every rent dollar
- Population + job growth among highest in US
- Landlord-friendly law: fast eviction, strong lease enforceability
- Strong rental demand in major metros (Dallas, Houston, Austin, San Antonio)
- Diverse economy — energy, tech, healthcare, defense
The honest caveats
- Property taxes 1.7-2.5% effective in most metros — among highest in country
- MUD (Municipal Utility District) zones can push effective tax to 2.8-3.2%
- Insurance up 25%+ over 5 years on coastal + storm-belt zones
- Austin specifically overbuilt 2022-2024, rents still negative YoY
- Property tax appeal process is meaningful work but high-ROI in TX
Best cities for rental investing in Texas
Energy-driven economy, lower entry prices, hurricane insurance volatility
San Antonio
Lower-cost alternative to Austin, military + healthcare anchors
Fort Worth
Suburban growth alongside Dallas, stronger cash flow than DFW proper
Best strategies for Texas
- Buy-and-hold in B-class suburbs
- House hacking on duplexes near major employers
- BRRRR in working-class neighborhoods
Insurance note for Texas
Inland TX is stable. Coastal counties (Galveston, Brazoria, Harris coastal zones) and the I-35 hail belt have seen 20-35% premium increases since 2020.
Run the math on a Texas deal
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