Where to Buy Investment Properties in Texas in 2024

Where to Buy Investment Properties in Texas in 2024

January 18, 2024

Despite challenges in the real estate market in 2023, Texas continues to be one of the strong places in the United States to invest in real estate. As 2024 unfolds, the Texas real estate market maintains promising opportunities for investors seeking stability and growth. Among other resilient real estate markets across the United States, Texas stands out for savvy investors looking to allocate their resources wisely. 

What makes the Texas real estate market appealing to investors?

The Lone Star State has consistently drawn attention for several compelling reasons. Here are some points to consider as to why Texas is still an enticing investment destination for real estate investors. 

1. Economic Resilience

Texas boasts a robust and diverse economy that has shown remarkable resilience, even during periods of economic downturn. With flourishing industries spanning technology, energy, healthcare, and more, the state’s economy has been a driving force for job creation and population growth, fueling the demand for housing and commercial real estate.

2. Population Boom and Migration Trends

Over the past decade, Texas has experienced a substantial influx of residents from across the country, drawn by its flourishing job market, lower cost of living, and favorable business environment. This influx has resulted in a consistently growing population, creating a steady demand for housing and rental properties. Cities like Austin, Houston, Dallas, and San Antonio have been particularly attractive to newcomers, fostering a vibrant real estate market.

In the 2022 Census Bureau Population Estimates for the U.S., Texas has five cities in the nation’s top 15 largest cities in terms of population: 

  • Houston is 4th with a 2022 population of 2,302,878
  • San Antonio is 7th with 1,472,909
  • Dallas is 9th with 1,299,544
  • Austin is 10th with 974,447
  • Fort Worth is 13th with 956,709

3. Affordability and Diverse Offerings

Compared to some other major U.S. metropolitan areas, Texas continues to offer relatively affordable housing options, attracting both first-time homebuyers and investors looking to capitalize on the market. Whether it’s single-family homes, multi-family homes, townhouses, or commercial properties, Texas provides a diverse range of real estate investment opportunities across different price points and property types.

4. Business-Friendly Environment

Texas is renowned for its business-friendly policies, minimal regulatory burden, including favorable tax structures and regulations that incentivize entrepreneurship and investment. This environment has contributed significantly to the state’s economic prosperity and, consequently, its real estate market attractiveness.

5. Long-Term Growth Prospects

Experts and analysts forecast continued growth in Texas’s real estate market for the foreseeable future. This projection is supported by ongoing infrastructure development, urban revitalization projects, and the state’s ability to adapt and evolve in response to changing market dynamics.

In its 2024 Top Housing Market Forecasts, Realtor includes El Paso, Texas in the 14th spot. Meanwhile, in a study by SmartAsset using data from Zillow, Rio Grande City, Texas takes the number 1 spot in highest projected home price increase. Home values are expected to increase by 12.3% in Rio Grande City, bringing the average price from $113,368 in July 2023 to a projected $127,312 in July 2024.

However, like any investment, due diligence and strategic planning are crucial when considering Texas real estate. Local market conditions, property location, potential for appreciation, and rental demand should all be thoroughly assessed before making investment decisions. In one of our latest articles, Longleaf Lending co-founder Matt Weidert talked about 5 Strategies for an Uncertain Real Estate market. Do check it out for some insights on exercising caution and considering proactive strategies in the coming year.

Whether you’re hunting for turnkey properties, fix-and-flips, or properties with BRRRR potential, this market update will help you decide where to look.

Top places to find investment properties in Texas

Here are four of the best places to buy a house in Texas, whether you’re looking for a quick flip or a long-term Texas investment property.

Houston

Check out our in-depth post to learn about Houston investment property for 2024.

With the city’s population growing steadily, fueled by both domestic and international migration, housing demand remains strong. In its latest report by the Urban Land Institute, Houston ranked 11th among 80 markets for best overall real estate prospects in 2024. 

The city’s affordability, ample job opportunities, and cultural diversity make it an attractive destination for people seeking better opportunities and a higher standard of living. Houston boasts a diverse and robust economy, primarily driven by industries such as energy, healthcare, aerospace, manufacturing, and technology. 

The city is home to the renowned Texas Medical Center, one of the largest medical complexes globally, contributing significantly to job creation and economic stability. The opening of Helix Park, the Texas Medical Center’s first phase of its new 37-acre campus, signals just one of the many dynamic projects coming to life.

Despite being a major metropolitan area, Houston’s real estate market remains relatively affordable compared to many other large cities in the United States. The potential for property appreciation coupled with affordable housing options makes it an attractive prospect for investors seeking long-term growth.

Compared to last year, Redfin’s latest data shows Houston home prices went up by 1.9% with a median price of $326K. The median sale price per square foot in Houston is $174, up 4.2% since last year.

Rental rates in the city have remained steady with the median rent at $1,800 according to Zillow. 

DallasFort WorthArlington

Check out our in-depth post about investing in Dallas real estate in 2023.

Check out our in-depth post about investing in Fort Worth real estate in 2023.

While the Dallas-Fort Worth real estate market suffered setbacks in 2023, experts are optimistic that 2024 looks strong.  In the Markets to Watch in 2024 survey by the Urban Land Institute, Dallas-Fort Worth ranks third best in the country’s best real estate markets, maintaining its appeal to real estate investors despite recent changes in market conditions. 

According to the Texas Real Estate Research Center at Texas A&M University October 2023 report, the average sales price of a single-family home in Dallas-Fort Worth rose 2.92% YoY from $474,354 to $488,224, while the average price per square foot subsequently rose from $207.27 to $211.10. Median price declined 1.27% YoY from $395,000 to $390,000, while the median price per square foot also rose from $196.32 to $196.40. Months inventory for single-unit residential housing rose from 2.4 to 3.0 months supply, and days to sell rose from 71 to 76. 

San Antonio

Check out our in-depth post about investing in San Antonio real estate in 2023.

Realtor.com’s 2024 real estate market forecast says that San Antonio’s housing prices are expected to drop by 9.4%. The median home price in the San Antonio area sat around $319,420, according to the San Antonio Board of Realtors. Despite cautious predictions, several indicators continue to point positively for San Antonio. 

San Antonio has been experiencing steady population growth, driven by factors such as job opportunities, a relatively lower cost of living compared to other major cities, and a vibrant cultural scene. The increasing population creates a consistent demand for housing, making it an attractive market for real estate investors. In the recent US Census, San Antonio is listed as the 7th largest city nationwide in terms of population. 

The San Antonio rental market remains strong, with median rent at $1,695 according to Zillow. 

In the recently released Emerging Trends in Real Estate report by the Urban Land Institute (ULI) and PricewaterhouseCoopers (PwC), San Antonio makes its first appearance in the top 10 as it ranked #8 in the Markets to Watch list. 

JCB, the world’s largest privately owned manufacturer of construction and agricultural equipment, announced that San Antonio will be home to the company’s second and largest North American manufacturing facility, the greatest economic development infusion in the region in 20 years with an expected $30 billion economic impact over the next 10 years and the creation of more than 1,500 jobs.

There are also a number of huge projects opening up in San Antonio in 2024, among which is the 300,000sq.ft. Microsoft Data Center in Medina County, just west of the city of San Antonio. The data center. 

Austin

Check out our in-depth post about investing in Austin real estate in 2024.

Out of Texas’ big four cities, Austin has seen the most explosive growth in home prices, in recent years. This coming year, CBA Realtors predict a gradual increase in prices, striking a balance that is beneficial for both buyers and sellers. While the rate of appreciation may be more measured compared to the past, this adjustment ensures a sustainable and inclusive real estate market that embraces affordability and value.

Now the 10th largest city in the country in terms of population, Austin continues to be among the cities primed for real estate investment in 2024

In the Urban Land Institute’s 2024 Emerging Trends report for the US and Canada, Austin remains a highly sought after real estate market, ranking No. 1 for homebuilding prospects and No. 5 in the list of “Markets to Watch.” 

WalletHub ranks Austin as one of the fastest-growing cities in the United States. And as big tech companies like Apple, Samsung, and Tesla move into the city, home values climb.

It’s also a promising time to own rental property in Austin. The influx of highly paid tech employees competing for housing will push rental prices up. If you stumble on a good deal, the potential rental income could make Austin the best place to buy a rental property in Texas.

According to Redfin’s latest data, median sale price of homes in Austin is at $544,000 while median rent for a 2-bedroom home is at $1,950.

Ready to invest in Texas real estate?

The Lone Star State is overflowing with real estate investment opportunities. With a low cost of living, a strong job market, and no income tax, people are flocking in and driving up property values.

But competition is fierce, and if you find an opportunity, you have to jump on it.

At Longleaf, we offer various types of real estate loans and can help fund your project in as little as two days. We are a Texas-based, direct lender and know these markets well.

For more information, check out our loan products or give us a call at 979-200-2823.