Key Takeaways

  • Texas offers favorable conditions for rental property investors. The state leads the country in new residents added between 2024 and 2025, has landlord-friendly regulations, and no personal or corporate income tax.
  • Houston has the most inventory and declining prices. With 13,581 rental units and a median listing price down 4.13% year-over-year, Houston may offer a timely entry point for investors.
  • San Antonio is the most affordable market on the list. At a median listing price of $294,990 and a median monthly rent of $1,650, investors could potentially achieve a 6.7% annual rental yield.
  • Dallas and Fort Worth offer appreciation and cash flow potential. Dallas median listing prices rose 3.74% year-over-year, while Fort Worth allows investors to buy lower while capturing rising rents.
  • Austin prices have dropped significantly. The median listing price has fallen 9.67% from last year and 16.30% from three years ago, presenting a potential opportunity to buy into a high-value market at a discount.
  • El Paso delivers strong rental yields at an affordable price point. With a median listing price of $298,900 and median monthly rent of $1,695, El Paso represents a 6.8% annual rental yield with both home values and rents rising.
  • New investors should avoid three common pitfalls. Relying solely on appreciation, underestimating operating expenses, and overleveraging are the most frequent mistakes when buying rental property in Texas.

Buying rental property in Texas has made many ordinary investors wealthy, and you could join them. The trick is knowing which deals to pursue and securing the right financing.

At Asset Based Lending, we’ve funded rental properties statewide with our dedicated Texas rental loan program. If you need fast, flexible financing you can rely on, we’re here to help.

Why Buy Rental Property in Texas

For investors, Texas has a lot to offer: 

Population Growth

Texas is one of the fastest-growing states in the country. Between 2024 and 2025, it added more new residents than any other state (391,243) at the fourth-fastest annual rate (1.2%).

Landlord-Friendly Regulations

Compared to the rest of the U.S., Texas is relatively landlord-friendly, with swift eviction timelines and no rent control.

Low Tax Environment

Texas has a pro-business legal environment, including no personal income tax or corporate income tax. That means you can keep more of your rental profits. 

What to Look for in Texas Rental Property

When evaluating a potential rental property to buy, look for the following:

Appreciation Potential

Appreciation is how much the property’s value increases over time. Check historical trends to get an idea of what to expect for the future. 

Stable Rental Demand

An area with a strong economy and job opportunities will attract more residents, putting upward pressure on rents.

Low Vacancy Risk

Most rentals experience turnover (when tenants leave and need to be replaced). However, some markets have lower vacancy risk than others. 

Attractive Financing Options

A property is a big investment. Instead of buying with cash, explore financing options to spread your capital further and gain positive leverage. Avoid properties that lenders won’t approve. ABL can help you determine if a property is a viable investment. 

Top 6 Texas Rental Markets to Consider

Now that you know what to look for in a Texas rental property, here are the top markets:

Houston

Number of Rental Properties 13,581
Median Listing Price $325,000
Median Monthly Rent $1,795

Houston is the most populous city in Texas, with a population of nearly 2.4 million. It also has the most rental units (13,581) and 17,834 active listings, giving you plenty of inventory to choose from. Furthermore, the median listing price ($325,000) is down 4.13% from a year ago and 7.14% from three years ago, so now may be a good time to buy before prices rise again.

San Antonio

Number of Rental Properties 5,854
Median Listing Price $294,990
Median Monthly Rent $1,650

San Antonio is the second-most populous city in Texas, with over 1.5 million residents. It also offers the lowest median listing price of all the cities on our list at $294,990. That means you could potentially get in on a rental property for less than $300,000 and still command a median rent of $1,650. That would produce an attractive annual rental yield of 6.7%. 

Dallas

Number of Rental Properties 9,114
Median Listing Price $447,650
Median Monthly Rent $1,656

Dallas has the second-highest number of rental properties on our list (9,114) and 5,721 active listings. It’s also a hot market with rising home values. Between May 2025 and May 2026, the median listing price rose 3.74% to $447,650. So if you want to lock in some appreciation, buying in Dallas may be a good option.

Austin

Number of Rental Properties 6,507
Median Listing Price $569,000
Median Monthly Rent $1,836

Austin is the capital of Texas, with a population of just under 1 million. The city has the highest median listing price of all the cities on our list ($569,000), but it’s actually fallen by 9.67% from last year and by 16.30% from three years ago. Meanwhile, rentals command a median rent of $1,836. So if you invest in a rental now, you could buy the dip in an expensive market.

Fort Worth

Number of Rental Properties 5,466
Median Listing Price $349,999
Median Monthly Rent $1,692

Fort Worth is right next to Dallas and has a population just under 1 million, like Austin. However, the median listing price is much more approachable at $349,999, down slightly from last year. At the same time, the median monthly rent is up 1.68% from last year at $1,692. This means you may be able to buy lower while capturing higher rents, a win-win.

El Paso

Number of Rental Properties 887
Median Listing Price $298,900
Median Monthly Rent $1,695

El Paso is located on the far western tip of Texas, bordering Mexico and the state of New Mexico. Its housing market is relatively affordable, with a median listing price of $298,900. Yet, rents are still relatively high at $1,695, representing an attractive 6.8% annual rental yield. Both home values and rents are rising year-over-year. 

Common Mistakes to Avoid

Before you buy your next Texas rental property, be sure to avoid these common pitfalls:

  • Ignoring cash flow for appreciation: Counting on property value gains alone is risky. Make sure the rent covers your mortgage, taxes, and operating costs.
  • Underestimating operating expenses. New investors often forget to budget enough for operating expenses like maintenance, repairs, and property management. Be conservative in your estimates to mitigate costly surprises later.
  • Overleveraging. Financing is a powerful tool, but taking on too much debt can wipe out your profit margins. At ABL, we want you to succeed, so we only fund deals we think are a good fit for you.

Finance Your Next Texas Rental with an ABL Loan

Ready to pull the trigger on your next Texas rental property? You’ve come to the right place. Take the next step by seeing if you pre-qualify for a loan today.

Methodology:

  • Top Texas rental Markets are based on the number of housing units, per Data Commons.
  • Population data taken from the U.S. Census Bureau. 
  • All real estate market data taken from Realtor.com (unless otherwise cited). 
Back to blogs
Share:

Real Reviews from Real Borrowers

 
Trustpilot