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Where to Buy Investment Properties in Texas in 2022

The Texas real estate market is on fire.

According to Texas Realtors second-quarter report, the median Texas home price breached $300,000, up 19.1% compared to last year. Rental prices are soaring as well.

The question is — where is the best place to buy investment properties in Texas?

To figure that out, let’s crunch some numbers.

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 2022.

The Houston housing market is on a gradual rise, with home prices up 11.8% compared to last year. That said, with summer coming to a close, buyer activity seems to be slightly cooling off compared to its peak in June. Fewer homes sold above asking price, more homes dropped their prices, and the average home lasted 17 days on the market, according to Redfin.

But the real estate market is still ripe with opportunities. According to Houston.org, inventory for single-family homes has increased to a 1.9-month supply, meaning it would take 1.9 months to exhaust the supply of houses at the current demand. Houston’s supply is below the 2.5-month national average, and far below a 6.0-month supply, which defines a balanced market.

Combine limited housing with population growth, and you have a recipe for increased rental prices. In August, the average single-family lease in Houston clocked in at $2,153, up 9.6% from last year. And now that housing prices seem to be cooling off, it could be a good time to pick up a single- or multi-family rental property in Houston.

DallasFort WorthArlington

Check out our in-depth post about investing in Dallas real estate in 2022.

Check out our in-depth post about investing in Fort Worth real estate in 2022.

Housing supply in the DallasFort Worth area is even tighter than in Houston, with only a 1.1-month supply of inventory.

This housing shortage coupled with Texas’ booming economic growth landed Dallas on Forbes list of hottest housing markets in Texas.

A Florida Atlantic University study shows average home values have ballooned and are selling for over 30% more than they are actually worth. Yet after an all-time high of $415,000 in May, the median sale price has dropped for three consecutive months. This indicates that the market may have peaked, and real estate investors should tread carefully when evaluating new deals.

That said, the median monthly rent for a 3-bedroom home is $2,200 per month, according to Roofstock, and rental prices have soared 13% year-over-year. So if you stumble on a promising rental property in Dallas, snatch it up.

San Antonio

Check out our in-depth post about investing in San Antonio real estate in 2022.

Unlike the housing market in other Texas cities, prices in San Antonio have not quite peaked. According to Redfin, August hit a record-high $278,950 median sale price, up 16.2% from last year.

That said, despite a tight 1.3-month inventory and stiff competition, the market does show signs of leveling out. In August, the sale-to-list price dipped for the first time this year, meaning fewer houses are selling above their listing price.

San Antonio’s rapidly-growing population is fueling the housing shortage, making it one of the best places to invest in Texas. The rental market is strong, and Wallethub even ranked it as one of the best cities in the U.S. for renters.

Austin

Check out our in-depth post about investing in Austin real estate in 2022.

Out of Texas’ big four cities, Austin has seen the most explosive growth in home prices, up 24.4% since last August. Despite this impressive year-on-year growth, the median sale price actually dropped sharply from July to August, according to Redfin — from $599,900 to $560,000.

Much of Austin’s surging prices stem from low supply and high demand. Austin only had a 0.6-month supply of inventory in the second quarter of 2021, pouring fuel onto the already fiery real estate competition.

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.

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.

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