Due to strong population growth and an ever-expanding job market, the Lone Star State has become a beacon for real estate investors, with real estate prices continuing to climb. Between July 2020 and July 2021, Texas ranked first in population growth, with a 1.2 percent rise in the population, accounting for almost 300,000 additional citizens. Because these new residents require places to live, the Texas real estate market has exploded, making certain towns some of the best areas for real estate investors.
It’s worth noting that tech is one of Texas’ fastest-growing job sectors, which means many of the new jobs are high-paying positions that help drive up real estate values. Additionally, eight Texas towns are in the top 20 fastest growing in the US, contributing to the robust local real estate markets that investors want. The state’s population and job growth show no signs of slowing down, making it an ideal place to invest in real estate for the foreseeable future.
To bring you the most comprehensive list of the greatest areas to invest in Texas, we gathered data from trustworthy sources like as Redfin, Longfin & Foster, public state records, and more. Please keep in mind that all data is based on the most recent data as of October 2021.
Houston has reaped the benefits of recent residential growth, with a well-rounded job sector that ranks eighth among the country’s top-performing job markets. The city’s stable employment and above-average income are helping to fuel the real estate market’s growth. The unemployment rate is now hovering at 8%, which is slightly higher than the national average but not out of the ordinary for such a large city. From 2010 to 2019, the Houston metro region was rated 6th in the nation for job growth, with a nearly 15% rise in job growth and a predicted job growth of 31% over the following ten years.
The city has a population of more than 2.3 million people, with a metro area population of more than 7 million people, making it one of the country’s most densely inhabited areas. The lack of an income tax is a big selling feature for new residents, as it gives buyers and investors more purchasing power. All of these variables combine to form a robust real estate market that can benefit investors who know how to choose profitable properties.
The average home sale price in Houston hit $285,000, up 12% over the previous year. In the month of October, 3,490 residences were sold, representing a 16 percent rise over the previous year. The average number of days on market is 17, down 45 percent from the prior year. Particularly attractive homes sell on an average of 6 days and for up to 2% more than the asking price. Fix and flip investors benefit from the speedy sell times since they may reap the benefits of their renovation while moving on to their next property.
In Houston, new construction is a popular commodity right now, with homes selling for $142 per square foot, a 15% rise year over year. Home offices, outdoor pools, and fenced yards are among the characteristics that attract the most attention in internet listings and command the highest initial asking prices from purchasers. In this situation, builders and developers have an edge over fix-and-flips since they can build homes from the ground up with these desired amenities to get the best possible selling price.
The average monthly rent in Houston is $1,205, an increase of 8% year over year. The city’s population rents rather than owns, with the entire vacancy rate hovering between 8% and 9%, which is healthy for a major metro area. Fourth Ward, University Place, and The Museum District are the top Houston neighborhoods for real estate investors right now. These appealing sites attract a steady stream of potential tenants, allowing for higher rents and reduced vacancy rates.
San Antonio, Texas
San Antonio is another popular real estate investment destination, with a market similar to Houston but with a smaller population and a smaller job market. To compensate, the city offers a little lower entry price point for investors while still giving large percentage growth in average house sale prices and a fast-moving market similar to Houston, which advantages fix-and-flip investors as well as new building projects with lower beginning capital.
The average home sale price in the area hit $279,000, a 16 percent rise over the previous year and a five-year high. Homes are spending an average of 18 days on the market, which is 42% fewer than last year and demonstrates how quickly the San Antonio real estate market is moving. The most coveted homes sell on an average of 11 days and for around 5% more than the asking price. Fix and flip investors can use hard money financing to purchase a property and then swiftly sell it for a profit to pay off their loan and move on to their next project.
Homes are selling for $149 per square foot, a 20% increase from the previous year. In San Antonio, like in Houston, attractive amenities such as pools, home offices, and functional fireplaces are attracting more attention and garnering higher offers. Builders and developers should constantly conduct market research and tailor their new building project to meet demand, ensuring that they obtain the highest possible profit when it comes time to sell.
The average monthly rent in San Antonio is currently $1,151, up 10% year over year. The renter population is only 36%, but with a rental vacancy rate of roughly 7%, the market gives investors searching for rental property a steady income. Government Hill, Cedar Creek, and Forest Crest are the finest areas to invest in in San Antonio, based on a combination of rental costs, safety, and closeness to famous venues and shops.
Dallas is appealing to real estate investors as a major tourism center with another booming job market. With 1.3 million residents, the third largest city in Texas has seen a 1.4 percent population increase in the last year, which has helped to improve the local real estate market. Many companies in the area have traveling personnel that stay in short-term rentals throughout the city, thus rental investors can consider Dallas as their next investment opportunity.
The average home price in Dallas is now $395,000, up 9% over the previous year. Homes are spending 23 days on the market, down 41% from the previous year. This means homes are spending nearly half as much time on the market as they were the year before. Hot properties sell in an average of 13 days and for around 3% more than the asking price, which is great for Dallas fix and flippers who can speed through their deals and link together numerous flips in a short amount of time.
Homes in Dallas are selling for $217 per square foot, up 14% from the previous year. Dallas properties with a home office, outdoor pool, and central air conditioning are generating more listing attention and higher initial bids than homes without these features. Using new construction loans to build homes to meet market demand is an innovative approach for developers to leverage outside financing to ensure they get the best potential selling price while paying off their hard money loan with a share of the profit.
The average monthly rent is currently $1,383, an increase of 10% year over year. With a good vacancy rate hovering between 7% and 8%, 43 percent of the population rents rather than owns. Grammercy Place, Idlewild, and Victory Park are the greatest rental communities in Dallas because of their safety and proximity to famous attractions. Due to its constant growth and big renter population, real estate investors using the BRRRR method should consider Dallas, Texas as the next location for their rental property investment.
The state capital has also become one of the most popular real estate investment destinations in the country. While the entire state has seen an inflow of new people in the previous two years, Austin is one of the fastest expanding cities, resulting in one of the most significant increases in local real estate values. Some investors may believe that Austin’s growth has already peaked, and that they have missed their chance, yet market corrections have already occurred, and growth has continued despite them.
Austin home prices have risen 25% year over year to $560,000, only barely below the five-year record for the city. Homes are spending an average of 33 days on the market, a 230 percent increase in average time on market. However, this statistic is inflated because Austin experienced a rush in 2020, so this drop to “normal market” average appears to be a drastic decrease in market activity when it is simply corrected back to a healthy, active market. Hot properties sell in 13 days on average and for up to 10% over asking price, making this a perfect location for repair and flippers. Fix and flip investors should employ hard money loans to finance their project and depart fast to maximize their profit because initial acquisition prices have escalated so high.
Homes are currently selling for $320 per square foot, a 35 percent increase year over year. When building a project, builders and developers should consider market expectations, as extras such as a home office, outdoor pool, or attached deck could boost the asking price. For real estate investors who specialize on ground-up building investments, new construction projects that are tailored to the needs of the market offer a distinct edge.
The average monthly rent in Austin is $1,619, a 15% rise over the previous year. Because 48% of the population rents rather than owns, the city has a steady stream of potential tenants, making it a good place to invest in rental property. Rental vacancy rates are between 5% and 6%, which is low for such a densely populated city and a significant benefit for BRRRR investors seeking rental portfolio stability. Based on rental costs and proximity to major attractions, Clarksville, Hancock, and Downtown Austin are now the finest neighborhoods for Austin rental property.
Although it lacks the celebrity of Austin or Dallas, Corpus Christi remains one of the top Texas cities for real estate investment. It’s a special location for the Lone Star State because it’s one of the few large cities on the east coast of the Gulf of Mexico. This provides the neighborhood with a few unique work opportunities, but it also provides homes and flats with highly coveted ocean views. The Navy and other armed services have a prominent presence in the city, with the city’s naval station being the state’s largest employment. This is vital for investors to know because military members receive housing stipends and benefits, making it easier for them to buy or rent property than in other middle-class cities.
Home prices in Corpus Christi have surpassed $288,000, an increase of 38 percent year over year. Ones spend an average of 28 days on the market, with more competitive homes selling in 15 days. The significant increase in average pricing while retaining an affordable entry point is a tremendous benefit to fix and flip investors, allowing them to put down less capital while still benefiting from the market’s constant development. Furthermore, the speedy sale of the property allows you to pay off your fix and flip loan sooner and keep more of your profit.
Homes are currently selling for $197 per square foot, up 67 percent year over year and more than any other major city in Texas. Homes with a home office, an outdoor pool, and an attached deck sell faster and for a higher price than homes without these features. Hard money loans for new construction should be used by builders and developers to fund their projects and provide these market-demand amenities, allowing them to sell the property for the highest possible profit and then use the extra cash to pay off their loan.
The average monthly rent in Corpus Christi is $1,071, which is up 6% over the previous year. Only 32% of the population rents rather than owns, which is on the low end for big cities, with an average rental vacancy rate of between 8% and 9%. The greatest communities for investing in rental property are Bay Area, Annaville, and Flour Bluff, based on rent costs and overall safety. Investors searching for their first rental property should pick Corpus Christi, which has a less competitive market but is still constant with new tenants moving to the area.
Arlington is located just outside of the Dallas metro region, thus it benefits from the surrounding big city’s real estate price hikes while having a lesser population and thus a cheaper entrance price point. Because so much of this area’s population and job market is predicated on Dallas’ variations, it’s a very similar market in terms of recent growth. Arlington is an ideal potential for short-term rental property, as it is home to Dallas Cowboy Stadium, which sees a continual stream of short-term visitors from all over the country, allowing short-term rentals such as Airbnb property to grow during football season.
The average home sale price in Arlington is $292,000, up 17% over the previous year. Homes are staying on the market for an average of 16 days, down 16 percent from the previous year. Hot properties sell in 11 days on average and for up to 8% more than the asking price. The common thread running across these Texas cities is speed, as real estate demand is so high that homes seldom stay on the market for more than a month. Fix and flip investors recognize that they must move swiftly to avoid paying more in interest payments, therefore locations like Arlington with quick selling houses are ideal for fix and flips.
Homes are currently selling for $158 per square foot, a 23 percent increase from the previous year. The area’s best attractions include outdoor pools, home offices, and functional fireplaces. Properties with any or all of these characteristics receive greater attention in online listings and receive higher first bids when it comes time to sell than homes without them. New construction loans can assist developers and builders in obtaining sufficient finance to fulfill market expectations, allowing them to get the best possible sale price by providing these valued features.
The average monthly rent in Arlington is $1,162, representing an increase of 8% year over year. Only 30% of the population rents instead of buying, and the rental vacancy rate is roughly 8%, making it a typical rental market. Because of the lower acquisition costs, it’s still a good alternative for someone wishing to buy their first rental property or diversify their rental portfolio. Windhurst and Windy Pine Park are the greatest Arlington communities to invest in rental property since they have the most consistent stream of renters and offer premium monthly rent prices.
Fort Worth, Texas
The final Texas city that is ideal for real estate investors is Forth Worth, which is located outside of the Dallas metro region and offers numerous real estate advantages. For example, Fort Worth has an unemployment rate of around 4% and has grown by 1% in the last year, thanks to the strength of the adjacent Dallas metro region. Investors searching for less competitive markets could go outside of big metro regions, such as Fort Worth and Arlington, because these smaller communities often benefit from their desirable position while requiring less initial cash to get started.
The average house sale price in the Fort Worth area reached $310,000, a 25 percent rise year over year and a five-year high. Homes are staying on the market for an average of 16 days, down 41% from the previous year and demonstrating how busy the market is, similar to other local real estate markets in the Dallas metro area. Fix and flip investors should keep this statistic in mind when deciding on their next investment area: especially attractive homes have a 7 percent higher asking price and sell in 11 days on average.
Builders and developers should be aware that homes are selling for $157 per square foot, up 24% from the previous year. In Fort Worth, the most desirable facilities are an office, a pool, and central air conditioning, therefore homes with these characteristics are more likely to receive higher bids. Hard money new construction loans can be used to fund the extra features needed in new construction projects, allowing the finished home to fetch a higher profit, which the investor can then use to pay off the loan and walk away with more money than if they had built a home without these facilities.
The average monthly rent in the area hit $1,273, an increase of 10% year over year. In comparison to Arlington and Corpus Christi, 32 percent of the population rents rather than owns. The rental vacancy rate is roughly 10%, which is the highest on the list but does not indicate a poor market or a risky investment. Colonial Park and Bellaire are the greatest Fort Worth communities for investing in rental property because they have a reduced vacancy rate and consistently high market rent.
The numbers are clear: Texas has among of the country’s hottest real estate markets. Rapid population expansion and thriving job sectors across the state have resulted in highly competitive local real estate markets that are beneficial for investors. Whether you’re a fix-and-flip investor looking to chain together many purchases, or a developer looking to capitalize on the highest possible house sale price, Texas provides lots of investment alternatives for you. BRRRR investors wishing to start or extend their rental portfolio can benefit from Texas real estate, since locations like Austin and Dallas offer steady rental property with good cash flow. Asset Based Lending provides customizable credit programs to Texas real estate investors, including fix and flips, new construction, and long-term rental properties. ABL can assist you with hard money loans if you’re trying to expand your real estate firm. To be authorized for the most dependable hard money loans Texas has to offer, contact us today.