Investment Property Loans in Texas

Texas Investment Property Market Overview

Texas consistently ranks among the top states for real estate investment, and for good reason. The state’s combination of strong job growth, population influx, landlord-friendly laws, and no state income tax creates an environment where rental property investing can be highly profitable.

The Texas economy is diversified across energy, technology, healthcare, manufacturing, and defense, which provides stability that single-industry markets lack. Major metros like Dallas-Fort Worth, Houston, Austin, and San Antonio each offer distinct investment profiles and opportunities.

Why Investors Choose Texas

Population growth: Texas has been one of the fastest-growing states in the country for over a decade. People moving to Texas need housing, which drives rental demand.

No state income tax: Rental income and capital gains are not subject to state income tax, improving investor returns compared to states like California or New York.

Landlord-friendly laws: Texas law generally favors property owners, with relatively straightforward eviction processes and no rent control statewide.

Affordability: Despite rising prices, Texas metros remain more affordable than coastal markets, making it easier to achieve cash flow on rental properties.

Key Markets for Investors

Dallas-Fort Worth

The DFW metroplex is the largest and most diverse market in Texas. Strong job growth from corporate relocations (Toyota, Charles Schwab, CBRE, and many others), a large and growing population, and a wide range of neighborhoods make DFW a top market for both single-family and multifamily investors.

Houston

Houston offers some of the most affordable entry points among major Texas metros. The economy is diversified beyond energy into healthcare (the Texas Medical Center is the world’s largest), shipping and logistics, and aerospace. Investors can find cash-flowing properties at lower price points than DFW or Austin.

San Antonio

San Antonio provides a middle ground — more affordable than Austin or DFW, with steady growth driven by military installations, healthcare, tourism, and a growing tech sector. The city’s strong population growth and relatively low cost of living make it attractive for rental investors.

Austin

Austin has seen dramatic appreciation over the past decade, making it more challenging for cash flow investors. However, the city’s strong tech economy, university presence, and quality of life continue to drive demand. Investors here often focus on appreciation plays or value-add strategies.

Lending Landscape in Texas

Texas has a robust lending market with numerous national and regional lenders competing for investor business. Most national DSCR lenders, hard money lenders, and bridge lenders are active in Texas markets.

Key considerations for Texas lending include the state’s unique homestead protections (which apply to primary residences but not investment properties), property tax rates that are among the highest in the nation, and insurance costs that have risen significantly in recent years due to weather-related claims.

Texas-Specific Considerations

Property taxes: Texas property tax rates typically range from 1.8% to 2.5% of assessed value, which is well above the national average. This must be factored into your DSCR and cash flow calculations.

Insurance costs: Homeowner’s insurance in Texas has increased substantially, particularly in coastal areas and regions prone to severe weather. Get insurance quotes early in your due diligence process.

HOA regulations: Many Texas subdivisions have mandatory HOAs that may restrict or prohibit rental activity. Verify HOA rules before purchasing.