7 Best Cities in Texas to Buy a Home Brian Decker's Top 7 Best Cities in Texas to Buy a Home With the cost of housing rising across the nation, Texas remains relatively cheap, meaning investors can secure a great return on investment properties. When considering purchasing a property in Texas, there are a few things that real estate investors should consider. In this article, I dive into the benefits of the top seven cities to buy a home in Texas. Read on to find out which Texan city would be the perfect place for you to plant an investment property. Waco, Texas Garland, Texas Brownsville, Texas Grand Prairie, Texas Dallas, Texas Houston, Texas Pasadena, Texas Waco, Texas Waco, population 135,858, is the best city for the real estate investor to buy a house in Texas. This top spot is unsurprising to anyone familiar with Chip and Joanna Gaines, their company Magnolia, and its outsize influence on Waco and central Texas. Typical house value is $182,229, 30% below the average of Texas cities. Home appreciation over the last five years is 70.1%, which is 69% higher than the average. The effective tax rate is 1.91%. The Waco rental market is good for property owners, with an average rent-to-home value ratio (5.68%), an above-average rent-to-income ratio (21.2%), and a below average rental vacancy rate (4.6%). Garland, Texas Next on my list of best places to invest in real estate in Texas is Garland, the north Dallas suburb with a population of 238,418. Typical house value is just 1% below average at $256,909, but home value appreciation over the last five years is 41% above average at 58.8%. The effective tax rate in Garland, which is part of Collin County, is 1.91%. The rent-to-home value ratio is average at 5.29%, the rent-to-income ratio is below average at 18.1%, and the rental vacancy rate is below average at 5.9%. Brownsville, Texas With a typical house value of $135,623, 48% below the average for the cities in our study, Brownsville, population 182,271, ranks three on my list of the best cities in Texas for purchasing investment property. It is located at the southern tip of the state, adjacent to both the Mexican border and the Gulf of Mexico and boasts the third-highest proportion of Hispanic Americans in the country; they make up 93.9% of the population. House value appreciation over the last five years is 47%, 13% above average. The effective tax rate is 2.05%. The rent-to-home value ratio is above average at 6.51%, the rent-to-income ratio is below average at 16.9%, and the rental vacancy rate is below average at 7%, all good things for landlords. Grand Prairie, Texas The typical house value in Grand Prairie, the Dallas-Fort Worth metro area city with a population of 192,565, is $275,075. That value puts the city, which broke ground on a new convention center in 2021, at 6% above average for the cities looked at in my study, but a high home value appreciation rate 64.8% helps put it on my list of the best cities to buy a house in Texas. The effective tax rate is 2.09%. The rent-to-home value ratio is below average at 4.76%, the rent-to-income ratio is below average at 21.5%, and the rental vacancy is below average at 5.3%. Dallas, Texas With a population of 1.33 million, a typical house value of $275,164, and a five-year home value appreciation of 58.4% (40% higher than the average), Dallas is five on my list of best cities for home buyers in Texas. In addition to five major league sports teams, Dallas is home to the largest urban arts district in the country. The effective tax rate is 1.82%. The rent-to-home value ratio is 4.59%, the rent-to-income ratio is 2.5%, and the rental vacancy rate is 8%. Houston, Texas (Long-term Investment Property) The largest city in Texas, Houston has a population of 2.31 million and is #6 on my list of the best places to buy a house in the Lone Star State. At $231,326, typical house value is 11% below the average for the cities in my study. House value appreciation is 37.2%, and the effective tax rate is 1.81%. The rent-to-home value ratio is 5.4%, the rent-to-income ratio is 1.5% (the lowest of my list, making it one of the best neighborhoods to find good renters, since they'll likely be making well above your income requirements), and the rental vacancy rate is 8.9% Pasadena, Texas (Airbnb Investment Property) With a typical house value of $193,682, Houston suburb Pasadena, TX, population 153,350, is 7 on my list of the top Texas cities for homebuyers to buy an Airbnb. Five-year house value appreciation is 49.5%. The effective tax rate is 1.86%. The rent-to-home value ratio is 5.97%, the rent-to-income ratio is 24.1%, and the rental vacancy rate is 9%. For all the real estate investors out there, Houston is one of the best cash flowing markets in the U.S. With solid rental growth and a booming oil and gas industry, this market will continue to outperform most of the United States. I personally own rental properties in Houston and Galveston, both of which cash flow of over $1000/mo a piece after all expenses. You can typically expect a $300,000 home to rent from $2500 to $3100/mo in Houston. Using a conventional loan you can put down just 15% on your first rental property. Now for real estate investors looking to enter the short term rental market or add to their portfolio, Pasadena is the spot. Home prices are still very low and the Airbnb market is very underserved in this market. It is located just outside of Houston and sees a steady flow of business travel and tourist travel looking for affordable travel options. Occupancy is very high year round, and is a great suburb to purchase right outside of Houston. Brian Decker Senior Loan Officer Click to Call or Text: This entry has 0 replies Comments are closed.