The Lone Star State has become a beacon for real estate investors, as the real estate prices continue to skyrocket thanks to rapid population growth and an ever-expanding job market. Texas was the number one state for population growth between July 2020 and July 2021, seeing a 1.2% increase in the population that accounts for over 300,000 new residents. These new residents need places to live, which has caused a huge boom for the Texas real estate market and has made certain cities some of the top places for real estate investors.

It’s important to note that the fastest growing job sectors in Texas are based around tech, which means many of the new jobs are high-paying roles that helps drive up real estate prices. Additionally, eight different Texas cities rank in the top 20 fastest growing cities in the country which contributes to the strong local real estate markets that investors love to see. The population and job growth for the state doesn’t show signs of slowing down, making it an excellent state for real estate investments for the foreseeable future.

We compiled data from reputable sources including Redfin, Longfin & Foster, public state records, and more to bring you the most comprehensive list of the best places to buy real estate, rental, and investment property in Texas. Please note that all data of the best housing markets in Texas is based on the most recent data available as of October 2021.

Houston

Houston has been a major benefactor of the recent residential growth: with a well-rounded job sector that ranks eighth in top-performing job markets in the country, the city’s stable employment with above-average income is helping fuel the real estate market’s growth. Currently the unemployment rate is hovering around 8% which is slightly higher than the national average but not an atypical rate for such a major city. Houston metro area was ranked 6^th in the nation fastest growing area for jobs from 2010 to 2019, boasting a nearly 15% increase in job growth with a projected job growth over next ten years of 31%.

The city has a population of more than 2.3 million with the overall metro area boasting more than 7 million, making it one of the most densely populated metro areas in the country. No income tax is a major selling point for new residents and helps provide more purchasing power to residential buyers & investors. All these factors come together to create a strong real estate market that can benefit investors who know how to secure profitable deals.

The average Houston home sale price reached $285,000 which is a 12% increase year over year. 3,490 homes sold during the month of October which is a 16% increase in home sales from the previous year. Average days on market is 17 which is a 45% drop from the previous year. Especially desirable homes are selling on average in 6 days and typically receive up to 2% above asking price. The fast sell times are beneficial to fix and flip investors so they can reap the reward for their renovation and quickly move on to their next project.

New construction is a hot commodity in Houston right now, with homes selling for $142 per square foot which is a 15% increase year over year. Home offices, outdoor pools, and fenced yards are features receiving more attention in online listings as well as fetching the highest initial asking prices from home buyers. Builders and developers have an advantage over fix and flips in this case, as they can create homes from the ground up using these desired features to receive the best possible selling price for their project.

Houston’s average monthly rent price is $1,205 which is an 8% year over year increase. 39% of the city’s population rents versus owns and the overall vacancy rate hovers between 8% and 9%, which is healthy in a major metro area. Right now, the best Houston neighborhoods for real estate investors are Fourth Ward, University Place, and The Museum District. These desirable locations attract a constant flow of potential tenants which allows for premium rent pricing and lower average vacancy rates.

San Antonio

San Antonio is another major hot spot for real estate investors, offering a similar market to Houston with a reduced population and less-expansive job market. To compensate, the city has a slightly lower entry price point for investors while still offering high percentage increases in the average home sale prices and a similar fast-moving market to Houston, which benefits fix and flip investors along with new construction projects that are working with less initial capital.

The average home sale prices reached $279,000 which is a 16% increase from the previous year and marks a five-year-high for the area. Homes are spending an average 18 days on market which is 42% less than the previous year and highlights how fast-moving the San Antonio real estate market currently is. The most desirable homes are selling in 11 days on average and receive about 5% above asking price. Fix and flip investors can acquire a property using hard money financing and quickly sell their project for a profit to pay off their hard money loan and move on to their next property acquisition.

Homes are selling for $149 per square foot which is a 20% increase year over year. The desirable amenities in San Antonio are like Houston, with home listings seeing more attention and receiving higher offers that include pools, home offices, and working fireplaces. Builders and developers should always research the market and customize their new construction project to match the demand, ensuring they receive the maximum potential profit when it comes time to sell.

Right now, the average monthly rent price in San Antonio is $1,151 which is a 10% year over year increase. The renter population is only 36% but with a rental vacancy rate hovering around 7%, the market offers stable income to investors looking at rental property. The best neighborhoods and places to buy investment property in San Antonio, Texas are Government Hill, Cedar Creek, and Forest Crest based on a mix of rental prices, safety, and proximity to popular venues and shops around the city.

Dallas

As a major travel hub with another hot job market, Dallas is an attractive spot for real estate investors. The third biggest city in Texas has 1.3 million residents and saw a 1.4% population jump in the last year, which of course has helped to boost the local real estate market. Rental investors should especially consider Dallas for their next investment opportunity, as many companies in the nearby area have traveling employees stay in short-term rentals throughout the city.

Dallas average home prices reached $395,000 which is a 9% increase year over year. Homes are spending 23 days on market which is a 41% decrease from the previous year, meaning homes are spending almost half the amount of time on market than the year before. Especially hot homes sell on average of 13 days and for about 3% above listing price, which is hugely beneficial to Dallas fix and flip investors as they can speed through their deals and quickly chain together several flips in a short period of time.

Homes in Dallas are selling for $217 per square foot, an increase of 14% year over year. There’s a pattern in the most desirable Texas home amenities, as Dallas homes that have a home office, outdoor pool, and feature central air conditioning are receiving more listing attention and higher initial bids than homes that lack them. Utilizing new construction loans in order to build homes to match market demand is a creative way that developers can use outside capital to ensure they receive the highest possible selling price, using a portion of the profit to pay off their hard money loan.

Currently the average monthly rent is $1,383 which is a 10% year over year increase. 43% of population rents instead of owns, with a healthy vacancy rate that hovers between 7% and 8%. The best neighborhoods and places to buy rental property in Dallas, Texas are Grammercy Place, Idlewild, and Victory Park based on their safety and location to popular attractions. Real estate investors that are trying to use the BRRRR strategy should consider Dallas Texas as the next spot for their rental property investment thanks to its consistent growth and large renter population.

Austin

The capital of the state has also become one of the hottest real estate investing cities in the entire country. While the whole state received an influx of new residents over the last two years, Austin especially is one of the fastest growing cities and therefore is seeing one of the largest hikes in local real estate prices. Some investors may think that the Austin growth has already peaked, and they missed their opportunity, but the market corrections have seemingly already occurred, and the growth is continuing in spite of it.

Austin home prices have reached an average of $560,000 which is a 25% increase year over year and very slightly below the five-year-high for the area. Homes are spending an average of 33 days on market which is actually a 230% increase in average time on market- however, this stat is inflated as Austin received a rush during 2020 so this fall to “normal market” average looks like a drastic decrease in market activity when its simply corrected back to a healthy, active market. Hot homes sell in 13 days on average and generally receive up to 10% above asking price, making this a fix and flip dream location. Since initial acquisition prices have increased so much, fix and flip investors should use hard money loans to finance their project and quickly exit the deal so they can maximize their profit.

Right now, homes are selling for $320 per square foot which is a 35% year over year increase. Builders and developers should focus on the market demands when planning their project, as they could include amenities such as a home office, outdoor pool, or attached deck to receive a higher asking price. New construction projects that are crafted around the needs of the market are a unique advantage for real estate investors that focus on ground-up construction investments.

Austin’s average monthly rent price is $1,619 which is a 15% increase year over year. 48% of the population rents versus owns so the city boasts a reliable flow of potential tenants, making the city an excellent choice for investing in rental property. Rental vacancy rates are hovering between 5% and 6%, which is low for such a populated city and a huge advantage for BRRRR investors looking for stability in their rental portfolio. Right now, the best neighborhoods and places to buy rental property in Austin, Texas are Clarksville, Hancock, and Downtown Austin based on the rental prices and location to biggest attractions.

Corpus Christi

Corpus Christi may not have the same star power as cities like Austin or Dallas, but its still one of the best cities to invest in real estate in Texas. It’s a unique spot for the Lone Star State since its one of the few major cities that sits on water, hugging the east coast along the Gulf of Mexico. This provides a few unique job sectors for the area, but more importantly offers homes and apartments with highly desirable water views. The city also has a strong connection to the Navy and other armed services, with the city’s naval station being the largest employer in the entire state. This is important for investors to understand because military personnel receive stipends and benefits in regard to housing, allowing them to purchase or rent property more easily than other middle-class focused cities.

Corpus Christi home prices have reached $288,000 which is an impressive 38% increase year over year. Homes are spending an average of 28 days on market and especially competitive homes are selling in 15 days on average. The major increase in average pricing while still maintaining an affordable entry point is a huge benefit to fix and flip investors, allowing them to put minimal capital down to acquire the property while still enjoying the consistent growth that the market is seeing. Plus, the homes selling quickly allows for your fix and flip loan to be paid off ASAP and let you keep more of your profit.

Currently homes are selling for $197 per square foot which is a 67% increase year over year, a larger increase than any major city in Texas. Homes that feature a home office, outdoor pool, and attached deck are selling faster and for more money than homes without these amenities. Builders and developers should utilize hard money loans for new construction in order to fund their project and hitting these market demand amenities, this way they can sell the home for the absolute maximum profit and then use the extra capital they earned to pay off their loan.

The average monthly rent price in Corpus Christi is $1,071 which is a 6% increase year over year. Only 32% of the population rents versus own which is on the lower end for major cities, with an average rental vacancy hovering between 8% and 9%. Based on rent prices and overall safety, the best neighborhoods for investing in rental property are Bay Area, Annaville, and Flour Bluff. Rental investors that are looking for their first rental property should consider Corpus Christi as it’s a less competitive market but still consistent with potential new tenants coming to the city

Arlington

Arlington sits right outside the Dallas metro area, keeping the benefits of the real estate price increases of the nearby major city while having a lower population and therefore lower entry price point. Since much of the population and job market for this area is based on the fluctuations of Dallas, it’s a very similar market in terms of its recent growth. Rental investors should take note that Arlington is an excellent opportunity for short term rental property, as Arlington is home to Dallas Cowboy Stadium which sees constant short-term visitors from across the country, allowing short term rentals like Airbnb property to really boom during football season.

The average Arlington home sale price is $292,000 which is a 17% increase year over year. Homes are spending an average of 16 days on the market which is a 16% decrease from the previous year. Hot homes are selling in 11 days and receive upwards of 8% above asking price on average. The common theme across these Texas cities is speed, as the demand is so high for real estate that homes are rarely on the market for longer than a month. When fix and flip investors are choosing their financing options, they understand that they have to move quickly to avoid paying more money on their interest payments, so markets like Arlington with fast selling houses are perfect for fix and flips.

Currently, homes are selling for $158 per square foot which is a 23% increase year over year. Outdoor pools, home office, and working fireplaces are top amenities in the area. Homes that have some or all of these features are receiving more attention in their online listings than homes that lack them, as well as receiving higher initial bids when it comes time to sell. New construction loans can help developers and builders receive enough capital to build to meet the market demands, allowing them the ability to receive the highest maximum sell price by including these desirable amenities.

Arlington’s average monthly rent prices are sitting at $1,162 which is an 8% increase year over year. Only 30% of the population rents versus owns and the rental vacancy rate sits around 8%, making it an average rental market. The lower price points for acquiring property still makes it a strong option for someone looking to invest in their first rental property or try to diversify their rental portfolio. The best Arlington neighborhoods to invest in rental property are Windhurst and Windy Pine Park as they have the most consistent stream of renters and have premium pricing on their monthly rent prices.

Fort Worth

The last Texas city that’s great for real estate investors is Forth Worth, another city that sits outside the Dallas metro area and boasts many real estate benefits because of it. For example, Fort Worth has an unemployment rate that hovers in the 4% range and has seen a 1% population growth over the last year, largely because of the strength of the nearby Dallas metro area. Real estate investors that are looking for less competitive markets should look just outside major metro areas, like Fort Worth and Arlington, as these smaller cities typically receive a boost from its desirable location while requiring less initial capital to begin their investment project.

Fort Worth’s average home sale price for the area reached $310,000 which is a 25% increase year over year and a five-year-high for the area. Homes are spending an average of 16 days on market which is a 41% decrease from the previous year and highlights how active the market is, much like the other local real estate markets surrounding the Dallas metro area. Especially desirable homes receive asking prices 7% higher on average and sell in 11 days, a stat that fix and flip investors should consider when choosing their next investment area.

Builders and developers should know that homes are selling for $157 per square foot which is a 24% increase year over year. Office, pool, and central air conditioning are the most desirable amenities in Fort Worth, meaning homes are receiving higher bids at a more frequent rate than homes that lack these features. New construction projects can utilize hard money new construction loans to finance the extra features needed, allowing the finished home to fetch a larger profit that the investor can then use to pay off the loan and walk away with more money than if they had built a home that lacked these amenities.

The average monthly rent in the area reached $1,273 which is a 10% year over year increase. 32% of the population rents versus owns, which is on par with Arlington and Corpus Christi. The rental vacancy rate hovers around 10%, which is the highest on the list but not indicative of an unhealthy market or risky investment. Based on a lower vacancy rate and consistently high market rent, the best Fort Worth neighborhoods for investing in rental property are Colonial Park and Bellaire.

Final Thoughts

The stats are clear: Texas is home to some of the hottest real estate markets in the country. The rapid population growth and booming job sectors across the state has directly led the local real estate markets becoming highly competitive but lucrative for investors. Whether you’re a fix and flip investor using the fast turnaround times to chain together several deals, or you’re a developer investing in new construction to take advantage of the maximum potential home sale price, Texas has plenty of investment options for your price point. BRRRR investors looking to begin or expand their rental portfolio can also benefit from Texas real estate, as cities like Austin and Dallas offer stable rental property that can create a positive cash flow for a rental investor. Asset Based Lending is financing Texas real estate investors using flexible loan programs that includes fix and flips, new construction, and long-term rental property loans. If you’re looking to scale your real estate business by using hard money loans, then ABL is ready to help. Contact us today to be approved for the most reliable hard money loans Texas has to offer.