Investing in Texas real estate is a lucrative opportunity. Whether you are a first-time home buyer looking to make your first real estate investment or a seasoned investor with a solid commercial real estate portfolio, the Texas real estate market has something to offer for everybody.
From 2015 to 2019, the state of Texas had consecutively posted record breaking numbers for real estate sales for 5 consecutive years. Despite the coronavirus pandemic hitting the world, and real estate market slumping as the economy stood at a standstill, the real estate sales numbers only went down in Q2 of 2020 and have bounced back remarkably well since then.
The resilient nature of the Texas real estate market, favorable weather conditions, investor friendly state laws, promising job opportunities, and a combination of nature and culture are all contributing factors to real estate investors flocking towards Texas. A pro-growth government, low costs and regulations, and lack of corporate or personal income tax at the state level are all reasons for the propulsion of the Texas real estate market.
While Texas is a goldmine of promising opportunities, zeroing in on where to invest can be challenging. Texas being the second largest US state in terms of area and population, choosing the right market to invest in is crucial for success in the Lone Star state.
Here is the list of the most promising real estate markets in Texas, including the major metropolitan areas and their suburbs as well the less known treasures in Texas that need to be on your radar.
1. Houston
Robust job market and availability of affordable housing makes Houston an attractive option for real estate investors. Houston ranks fourth among U.S. metro areas in Fortune 500 headquarters.
As the corporate headquarters of 26 out of the Fortune 500 companies, and the Houston port being among the country’s busiest ports, Houston metropolitan area and its surrounding suburbs are a great place to invest in real estate in Texas.
With Amazon and Lowes opening up fulfillment centers in Houston in 2021 and companies like Hewlett Packard moving offices there, the job scene in Houston is booming. This indicates an increase in property values of both commercial real estate as well as single family homes.
Home values in Houston increased by 6.3% in 2020 and are projected to grow by another 9.9% during the next 12 months. Over the last five years home values in Houston increased by more than 26%.
The Houston-Sugar land-Baytown metropolitan area experienced a quarterly increase of 2.61% in rent for one bedroom apartments and 5.69% in rent of two bedroom apartments making it a lucrative deal for investors looking to develop rental properties.
| Median Household Income | $52,338 |
| Median Home Prices | $276,200 |
| Median Monthly Rent | $1179 |
2. Austin
Despite the pandemic and its resultant economic recession, the real estate market of Austin remains strong. With demand rising steeply, limited inventory and strong job growth in the region, Austin remains as a popular albeit cost-intensive real estate investment market.
In addition to Austin city, the suburban area of round rock is an attractive real estate market in Texas. With median home prices in round rock around $279k as opposed to $344k in the rest of the Austin metropolitan area, Round Rock is a good investment opportunity for people who want to invest in the high growth, in demand region of Austin.
With companies like Tesla announcing their move to Austin and indicating high levels of job growth in the region, Austin and its surrounding suburbs need to be on your radar when looking to invest in Texas real estate.
| Median Household Income | $63,717 |
| Median Home Prices | $379,700 |
| Median Monthly Rent | $1388 |
3. Dallas
Dallas is a quasi-gateway city for investors looking for dependable, liquid real estate environments. The GDP of the Dallas-Fort Worth-Arlington MSA has increased by over 62% in the last decade making it a booming area for real estate investors in North Texas.
While the increase in median income over the past year is 3%, the year on year increase in median property values over the same period is 11%.
Forbes ranks Dallas as the 2nd best place in the US for business and careers. In addition to being a great place for first time home buyers, Dallas is also a great opportunity for investors looking to develop a rental real estate portfolio. 44% of the total occupied housing units in the metropolitan area are renter occupied households.
| Median Household Income | $66,000 |
| Median Home Prices | $336,200 |
| Median Monthly Rent | $1256 |
4. Fort Worth
The sister city of Dallas offers similar job opportunities and quality of life while keeping the real estate rates affordable making it one of the most sought after markets in Texas real estate. Fort Worth is the 13th largest city in the United States. Yet unlike the rest of Texas, where the median increase in housing prices stands at 6.3%, the median housing price increase in Fort Worth was 4.6% indicative of buying opportunities for real estate investors.
The element of affordability also means that the Fort Worth housing market is highly competitive. With a Redfin competitive score of 73, which means very competitive, the properties in Fort Worth get multiple offers, average homes sell for around the list price while hot properties can go for 2% above the list price.
| Median Household Income | $66,000 |
| Median Home Prices | $280,000 |
| Median Monthly Rent | $1087 |
5. San Antonio
The second largest city in Texas, San Antonio offers prime location advantage. Being one hour drive from Austin and a three hour drive from Houston, San Antonio is favorably located as a connecting point between the central and southern regions of the state of Texas.
San Antonio-New Braunfels metropolitan area is a hub for manufacturing, military and defence, financial service companies, healthcare providers, energy/petroleum companies and oil and gas sector. Ample job opportunities, lower than average cost of living and high quality of life that San Antonio offers make it a place that needs to be on your radar for investing in Texas real estate in 2021 and beyond.
San Antonio is also one of the most stable markets for rental activity in the country. The increase in rent on a year on year basis in San Antonio in the last year was 11%, with 39% of households in the city being renter occupied.
| Median Household Income | $52,455 |
| Median Home Prices | $265,600 |
| Median Monthly Rent | $952 |
Going forward with investing in Texas real estate market
While selecting the right location for investing in real estate is important, selecting the right investment partner is equally important. With a market as competitive as Texas, getting access to the capital you need quickly can prove to be a game changer.
Faster loan processing and flexibility in the approval process are the two biggest benefits of hard money loans. Once you have shortlisted the market you need to invest in and have finalized the property, whether you are looking to purchase a property, fix and flip it for profit, build a rental portfolio or are investing in commercial real estate, hard money loans are going to be your best bet.
When you choose 14th Street Capital, you partner with local lenders with expertise in the Texas real estate market. With years of experience in the real estate investments in the state, both as private investors and Texas hard money lenders, we provide you with the equity as well as the expertise you need to succeed in Texas real estate.
Apply for a hard money loan for real estate investment in Texas today.