We manage properties across three states, and when out-of-state investors call about Texas, they usually ask about Austin or Dallas. Then they see the prices. The conversation that follows is how a lot of them end up in Waco or Killeen, and honestly, the numbers explain why.
Start with Killeen. Median home prices run roughly $235,000 to $260,000, about half of what the same money buys in Austin. Average rent sits around $1,200, which is 38% below the national average per Zumper, and about 51% of Killeen households rent. Cheap entry, deep renter pool. But the real story is the anchor: Fort Cavazos supports roughly 38,600 active-duty personnel and nearly 59,700 direct jobs according to the Texas Comptroller's analysis. That base is the local economy, and it generates something most markets don't have: a permanent, rotating population of renters with guaranteed housing allowances.
That rotation cuts both ways, and this is the part the podcasts skip. Military PCS cycles mean consistent demand and consistent turnover. You will lease units faster than in most markets, and you will also turn them more often. If your underwriting assumes a five-year tenant, Killeen will humble you. If your underwriting assumes competent turns and realistic vacancy, the Texas Real Estate Research Center's read on the Killeen-Temple metro is about right: balanced, steady, not overheated. Boring in the way that pays.
Waco is a different animal. Average rent runs about $1,370 per RentCafe, and the demand base is more diversified: Baylor, healthcare, manufacturing, and a steady stream of people priced out of the I-35 corridor cities. Less turnover than a military town, slightly higher entry prices, and a renter mix that skews toward workforce households and students depending on the pocket you buy in. Which pocket matters enormously. A few blocks in Waco changes your tenant profile, your rent ceiling, and your headache level.
So here's my actual checklist for both markets, same as the one I use in North Carolina, adjusted for Texas.
First, underwrite the property taxes like a Texan. Texas has no state income tax and makes up for it on property. Out-of-state buyers routinely run numbers with their home state's tax assumptions and wonder later where their cash flow went. Pull the actual county rate and the actual assessed value trajectory before you offer.
Second, price the turnover reality. In Killeen especially, assume more frequent turns than a civilian market. That means the condition of flooring, paint, and systems matters more, because you'll be making the unit rent-ready more often. A property that turns cheap beats a property that shows pretty.
Third, know your renter before you buy the house. Near the base, three-bedroom homes that fit a housing allowance lease fast. In Waco, proximity to campus versus proximity to the hospital district puts you in completely different businesses. Buy the tenant pool, not just the address.
Fourth, respect the boring math. National rental yields are compressing, with ATTOM reporting declines across most U.S. counties as purchase prices outrun rents. Central Texas markets like these still pencil precisely because they're unglamorous. The moment you pay a glamour price in an unglamorous market, you've kept the downside and given away the upside.
We operate in both markets every day, and the honest summary is this: Waco and Killeen aren't secrets, they're just unsexy. Steady demand, real jobs, entry prices a working investor can actually close on. In 2026, that combination is rarer than it should be.
Sources: Zumper Killeen rent research: zumper.com/rent-research/killeen-tx. RentCafe Waco and Killeen market data: rentcafe.com/average-rent-market-trends/us/tx/waco. Texas Comptroller Fort Cavazos economic analysis via cap rate underwriting guide: soldbychristiem.com/blog/estimating-cap-rates-for-killeen-rentals-the-right-way. ATTOM 2026 Single-Family Rental Market Report: attomdata.com/news/market-trends/single-family-rental/2026-single-family-rental-market-report.