Best Places to Buy a House in Texas (2024) – Policygenius (2024)

Looking to buy a house in Texas? If you're looking for your family home, you’ve likely got your own personal list of criteria — close to a park, by your kid’s school, within a reasonable commute to your job. But if you’re looking to purchase Texas real estate as an investment or rental property, the criteria are much simpler: Can you afford it, and will it make you money?

For this list of the best places to buy a house in Texas, we looked at the 50 largest cities in the second-most populated state in the United States and compared them across three main factors: the cost it takes to enter the real estate market (represented by typical home price and taxes), real estate appreciation values, and the state of the rental market (represented by the rent-to-home value ratio, the rental vacancy rate, and the rent-to-income ratio).

For the 50 cities in Texas in our study, these are the averages for the metrics we measured (for more on these metrics and how we calculated them, including our data sources, see Methodology below):

• Typical home value: $260,456

• Home value appreciation: 41.59%

• Effective property tax rate: 1.88%

• Rent-to-home value ratio (presented as a percentage of typical home values): 5.31%

• Rent-to-income ratio (presented as a percentage of average incomes): 27.33%

  See Also

  Cost of Living in Texas (2023) | SoFiTexas Rent Increase Laws | PropertyClubStretching Your Dollar in Texas: The Factors Behind Its Affordability- Rocket Homes Blog

• Rental vacancy rate: 7.82%

Explore related topics

The top 15 places to buy a house in Texas in 2023

1. Waco, Texas

Waco, population 135,858, is the best city for the real estate investor to buy a house in Texas, according to our study. 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 the cities in our study. Home appreciation over the last five years is 70.1%, which is 69% higher than the average of the cities in our study. 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%).

2. Garland, Texas

Next on our 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 for the cities in our study 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%.

3. 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 our 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.

4. 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 we looked at in our study, but a high home value appreciation rate 64.8% helps put it on our 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%.

5. Dallas, Texas

With a population of 1.33 million, a typical house value of $275,164 (6% higher the average for the cities in our study), and a five-year home value appreciation of 58.4% (40% higher than the average), Dallas is five on our 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%.

6. Beaumont, Texas

A low typical house value (47% below average at $138,373) and a low rental vacancy rate (4.7%, versus the average of 7.82%) help put Beaumont, population 118,151, at six on our list of best places to invest in Texas real estate. The city is just 30 miles from the Gulf of Mexico and 85 miles from Houston, and the top employer is Lamar University. House value appreciation is below average of the cities in our study at 18.3%. The rent-to-home value ratio is above average at 7.53% and the rent-to-income ratio is below average at 22.7%. The effective tax rate is 1.82%.

7. Mesquite, Texas

Mesquite, a suburb east of Dallas with a population of 143,456, ranks seven on our list of best cities for real estate investors in Texas. Its typical house value is $234,057, 10% below average. Its five-year house value appreciation is 67.3%, 62% higher than average. The effective tax rate is 1.74%. The rent-to-home value ratio is 5.66%, the rent-to-income ratio is 28.3%, and the rental vacancy rate is 9.4%.

8. Fort Worth, Texas

With a five-year house value appreciation rate of 63.4% (52% above the average of the cities in our study) and a population of 874,401, Fort Worth, the fifth-largest city in Texas and the second-largest in north Texas, is eight on our report on the best place to buy a home in Texas. Typical house value is $266,564, 2% above average. The effective tax rate is 2.12%. The rent-to-home value ratio is 4.77%, the rent-to-income ratio is 4.3%, and the rental vacancy rate is 10.2%.

9. San Antonio, Texas

San Antonio, the second-largest city in Texas with its population of 1.51 million people, comes in at nine on our list of the best cities for real estate. Typical house value is 11% below average at $232,885, and the five-year house value appreciation is 8% above average at 44.8%. The effective tax rate is 1.97%. The rent-to-home value ratio is below average at 5.11%, the rent-to-income ratio is below average at 2.4%, and the rental vacancy is average at 7.7%.

10. Killeen, Texas

With a typical house value of $182,274, which is 30% below the average of the cities in our study, Killeen, a military town with a population of 145,686 bolstered by the adjacent Fort Hood, is number 10 on our list of the top cities for home buying in Texas. Five-year house value appreciation is 53%, which is 27% above average. Effective tax rate is 2.07%. The rent-to-home value ratio is 6.08%, the rent-to-income ratio is 20.8%, and the rental vacancy rate is 9.8%.