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By Robin Simon, President, Harpoon Capital · About · LinkedIn · Author, The Book on DSCR Loans (Available on Amazon)
The best Texas markets for real estate investors in 2027 pair low entry prices, from about $220,000 in Killeen, with strong short-term rental potential, led by a 99 AirDNA score and $43,627 in average annual STR revenue in Abilene. Texas offers real estate investors more range than almost any other state. There's a fast-growing military and healthcare metro in Abilene, a tech-driven capital in Austin working through a real price correction, the scale and diversification of Dallas-Fort Worth, the energy and medical economy of Houston, a Fort Hood-anchored market in Temple-Killeen, and a Gulf Coast vacation island in Galveston. Home prices in five of these six markets sit below the national median of roughly $368,697 (Zillow, August 2026). Investors buying here typically finance with Texas DSCR loans, which are qualified primarily based on the property rather than the borrower's personal income.
This breakdown uses market data collected as of October 2026, the most current snapshot available heading into next year's buying season. If you're evaluating a purchase in the final months of 2026, keep in mind that your first full year of rental income, appreciation, or short-term rental revenue lands in 2027 regardless of when you close. A deal you underwrite today is already a 2027 investing decision, just one made with the freshest data available right now.
Texas is also one of the most landlord-friendly states in the country at the statewide level. There's no state rent control, no cap on security deposits, and no statewide STR license or registry. The only state-level requirement is registering with the Texas Comptroller's Office to collect the 6% state Hotel Occupancy Tax on stays under 30 days. Everything else, zoning, permitting, density caps, is set city by city, and the differences between neighboring Texas cities can be significant.
Below, we break down six Texas markets worth watching, using current data from Zillow, Redfin, BiggerPockets, and AirDNA.
Note: Home price appreciation and rent-growth figures below come from Zillow's Home Value Index (ZHVI), Redfin's median sale price data, and BiggerPockets' Market Finder, which use different methodologies and can vary from one another. We've cited both where available so you can compare.
The highest AirDNA score on this list, and it's not close
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Abilene doesn't get the attention of Texas's bigger metros, but the numbers here are hard to ignore. AirDNA named it one of its Best Places to Invest for 2026, and the data backs that up.
Abilene's economy runs on healthcare, education, and manufacturing, anchored by Abilene Christian University and a cluster of West Texas manufacturing employers, which keeps the job base diversified for a market this size. Home prices are still rising even as several bigger Texas metros correct, and homes are moving in about a week, a sign of real, sustained buyer demand rather than a speculative spike. The rent-to-price ratio here is the strongest of any market on this list, which is usually the single best early signal of cash-flow potential in a market.
Texas keeps STR regulation almost entirely local, and Abilene has not layered on the kind of restrictive licensing seen in some bigger Texas cities. Operators still need to register with the Texas Comptroller's Office and collect the state's 6% Hotel Occupancy Tax on stays under 30 days, but there's no per-unit city license process here like there is in Austin. BNBCalc reports that Abilene adds its own 7% city and 2% venue taxes, for a 15% combined rate, and requires a monthly city tax report even in months when no tax is due.
Abilene posts a submarket score of 99/100, the strongest on this list, with a perfect Investability score of 100 and Rental Demand score of 100. Annual revenue per listing averages $43,627, up an extraordinary 23.9% year-over-year, the fastest revenue growth of any market covered here. Average daily rate sits at $180.46 (up 23.8%) and occupancy at 77% (up 7.6%), both standout figures. Total active listings have nearly doubled, up 97.2% to 1,037, a sign this market is being actively discovered rather than a red flag on its own.
Financing note: Harpoon Capital offers industry leading DSCR Loans for properties in Abilene and all throughout the market area. Check out our full DSCR Loans Program here, or if you want a quote on what terms look like today, fill out this two-minute form!
Sources: Zillow Home Value Index↗ · BiggerPockets Market Finder↗ · BNBCalc Abilene STR Guide↗ · AirDNA↗
Investor Takeaway: Every number in this section points the same direction. Abilene combines the highest rent-to-price ratio, the fastest STR revenue growth, and the strongest AirDNA score of any market in this article, at a median price under $180,000. Keep an eye on the listing growth next year, but right now this is as close to an across-the-board green light as this list gets.
A real price correction in a tech hub that isn't going anywhere
Austin's prices are still correcting, and for a certain kind of investor, that's exactly the appeal.
Austin's economy is fueled by technology, with Dell, IBM, and a deep bench of startups sitting alongside the University of Texas, which anchors both talent and rental demand independent of the tech cycle. The correction here isn't a story about the city losing its economic base, it's a story about a market that ran hot for several years and is now giving some of that back. For investors who missed the earlier run-up, that's a meaningfully different entry point than what Austin offered in 2021 or 2022.
Austin's zoning code treats short-term rentals as a permitted accessory use in every zoning district, and city code explicitly states the use cannot be prohibited, a notably strong protection compared to most Texas cities. Licensing is still a real cost of entry: each unit needs its own STR license through the city's Development Services Department, licenses run for a maximum of two years and don't transfer with a sale, and each day of unlicensed operation counts as a separate offense with a fine of up to $500. Buy a licensed Austin STR and you're still starting the licensing process over.
Austin posts a market score of 74/100, with an excellent Seasonality score of 92 but a more moderate Investability score of 57. Annual revenue per listing averages $41,966, up a modest 2.3% year-over-year, with an average daily rate of $216.66 (down 2.0%) and occupancy of 59% (up 4.5%). Total active listings sit at 14,846, down 0.6% over the past year, one of only two markets on this list, along with Galveston, where STR supply is actually contracting, which may reflect the same cooling that shows up in the sales data.
Financing note: Harpoon Capital offers industry leading DSCR Loans for properties in Austin and all throughout the market area. Check out our full DSCR Loans Program here, or if you want a quote on what terms look like today, fill out this two-minute form!
Sources: Zillow Home Value Index↗ · BiggerPockets Market Finder↗ · BNBCalc Austin STR Guide↗ · AirDNA↗
Investor Takeaway: Buying in Austin right now is a bet on a correction, not a growth story. If you think the pullback has run its course, a 3.7% price decline in a market with Austin's underlying job base is a very different entry point than the market offered two years ago. If you're looking for immediate cash flow instead, this isn't the market on this list for it.
Thinking About One of These Markets?
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Scale and diversification across two major cities
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Dallas-Fort Worth is the biggest metro on this list, and the numbers reflect a market with genuine depth on both the buy side and the rental side.
Major employers here span AT&T, Texas Instruments, and UT Southwestern Medical Center, a mix that spreads risk across telecom, tech manufacturing, and healthcare rather than leaning on any single sector. Combined with the strongest rent growth of any market in this article and the second-strongest appreciation, that kind of diversification makes the case for DFW as a core holding rather than a satellite bet. Dallas and Fort Worth also regulate STRs quite differently from each other, so don't assume the rules are uniform across the metro.
Dallas adopted an STR registration ordinance and a zoning amendment in 2023 that would keep STRs out of single-family districts, but a court injunction has blocked the city from enforcing either one since December 2023, and the city isn't issuing registrations while it asks the Supreme Court of Texas to lift the injunction. For now, Dallas operators register for the city's hotel tax and collect a combined 15% (6% state plus 9% city), but BNBCalc notes the district limits would apply to existing operators too if the injunction is lifted. Fort Worth runs its registration through Localgov, the city's online tax and registration platform, layers an 11% local hotel tax on top of the state's 6%, and doesn't allow STRs in its residential zoning districts. In both cities, the specific address matters as much as the city name.
The Dallas market posts a strong AirDNA score of 89/100, driven by an excellent Seasonality score of 96 and a solid Revenue Growth score of 88. Annual revenue per listing averages $35,760, up 2.6% year-over-year, with an average daily rate of $179.60 (up 4.6%) and occupancy of 60% (down 0.7%). Total active listings sit at 12,852, up a substantial 14.4% over the past year, a market still absorbing meaningful new STR supply.
Financing note: Harpoon Capital offers industry leading DSCR Loans for properties in Dallas-Fort Worth and all throughout the market area. Check out our full DSCR Loans Program here, or if you want a quote on what terms look like today, fill out this two-minute form!
Sources: Zillow Home Value Index↗ · BiggerPockets Market Finder↗ · BNBCalc Dallas STR Guide↗ · BNBCalc Fort Worth STR Guide↗ · AirDNA↗
Investor Takeaway: DFW's case is built on breadth: the strongest rent growth on this list, the second-strongest appreciation, a genuinely diversified employer base, and a deep STR market to boot. The trade-off is that Dallas and Fort Worth run separate STR rulebooks, so treat this as two markets to underwrite, not one.
The most affordable big-metro entry point on this list
Houston is the fourth-largest city in the country, and it still offers the cheapest entry point of any major metro covered here.
Energy, healthcare, and technology anchor the Houston economy, with ExxonMobil and the Texas Medical Center, the largest medical complex in the world, providing a level of employment depth few metros can match. A large, diverse metro at this price point is unusual, and it's part of why Houston keeps showing up on cash-flow-focused investor shortlists year after year.
Houston's STR ordinance is brand new. The city passed it in April 2025, and it took effect January 1, 2026, so this is the first full year it's applied to investors. Each unit needs its own certificate, costing $275 a year plus a small administrative fee, and the certificate doesn't transfer with a sale. Combined with the state's 6% Hotel Occupancy Tax and Houston's local rate, the total tax stack runs to roughly 17%, a real number to build into your underwriting on any Houston STR deal.
Houston posts a market score of 64/100, the second-lowest on this list, weighed down by moderate Investability (63) and Rental Demand (59) scores despite an excellent Seasonality score of 96. Annual revenue per listing averages $30,590 (up 2.8% year-over-year), with an average daily rate of $164.44 (up 7.2%) and occupancy of 56% (down 3.4%). Total active listings sit at 15,373, up 2.9% over the past year, the largest STR inventory of any market on this list.
Financing note: Houston's size and diversified job base make it a natural fit for Multifamily DSCR loans as well as single-family, with entity vesting available for LLC and partnership buyers scaling a portfolio here.
Sources: Zillow Home Value Index↗ · BiggerPockets Market Finder↗ · BNBCalc Houston STR Guide↗ · AirDNA↗
Investor Takeaway: Houston is the value play among Texas's major metros: real economic diversity at the lowest price point of any big city on this list. The new STR ordinance is untested at scale, so if you're buying for short-term rental income specifically, budget conservatively until a full year of data under the new rules is in.
Fort Hood-anchored demand at some of the lowest prices in Texas
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Temple-Killeen offers a similar thesis to military-anchored markets elsewhere in the country: durable rental demand tied to a base rather than a local economic cycle, at a price point well below the state average.
Fort Hood, one of the largest military installations in the world, sits at the center of this economy, with Carl R. Darnall Army Medical Center adding a healthcare layer on top of the base itself. Military postings create a tenant base that turns over on a predictable schedule rather than reacting to broader economic conditions, the same dynamic that shows up in military-anchored markets elsewhere in the country. The appreciation rate here, the strongest of any market in this article, is a notable data point for a market this affordable.
Killeen posts a market score of 78/100, with a strong Investability score of 77 and an excellent Seasonality score of 95, though Rental Demand (59) lags behind the state's stronger STR markets. Annual revenue per listing averages $25,197 (up 2.6% year-over-year), the lowest dollar figure on this list and consistent with the market's overall price point. Average daily rate sits at $126.88 (up 2.9%) and occupancy at 59% (up 0.8%). Total active listings sit at 1,150, up 8.4% over the past year.
Financing note: BRRRR investors tend to do well in Temple-Killeen given the combination of low entry prices and steady military-driven rent, with entity vesting and flexible prepayment penalty structures available for investors scaling a portfolio here.
Sources: Zillow Home Value Index↗ · BiggerPockets Market Finder↗ · AirDNA↗
Investor Takeaway: This is a straightforward buy-and-hold thesis: a stable, base-driven tenant base, the highest appreciation rate on this list, and entry prices under $235,000. It won't be the highest-revenue market here, but it may be one of the least likely to surprise you.
A beaten-down vacation market with the highest revenue on this list
Galveston is Texas's premier Gulf Coast vacation destination, and it's also the market on this list with the lowest AirDNA score. Those two facts aren't in conflict, and understanding why is the whole point of this section.
Here's the thing about Galveston's AirDNA score: it's dragged down mostly by a weak Seasonality reading (46), with a soft Rental Demand score (52) adding to it. This is fundamentally a summer-and-holiday vacation market, and AirDNA's scoring penalizes that kind of seasonal concentration even when the underlying revenue is strong. Galveston's Annual Revenue and Average Daily Rate are actually the highest of any market in this article, a genuinely unusual combination of a low headline score and the best raw revenue numbers on the list.
The price action tells the more interesting story. Several Galveston neighborhoods have corrected sharply over the past year, well beyond what the island's overall tourism economy would suggest, and homes are sitting on the market for months rather than weeks. Distressed sellers and thin buyer competition is exactly the setup that tends to produce aggressive, low-ball-friendly negotiating conditions for investors with financing already lined up. The 32 miles of beach, the historic Strand District, and year-round cruise and convention traffic haven't gone anywhere; what's changed is how much leverage buyers currently have.
Galveston's STR rules changed in late 2025. Since October 1, 2025, the City of Galveston, rather than the Park Board of Trustees, has handled STR registration and hotel tax, and a new city ordinance added an annual license and a three-strikes revocation process. Each unit needs a $250 license every calendar year, licenses don't transfer with a sale, and every rental needs a 24-hour local contact who lives within an hour of the property. Combined city and state hotel tax runs about 15%.
Galveston's AirDNA score sits at 57/100, the lowest on this list, driven largely by a weak Seasonality score of 46 and a Rental Demand score of 52, the softest on this list. Investability (78) and Revenue Growth (85) both score well. Annual revenue per listing averages $45,373, up 6.2% year-over-year and the highest dollar figure of any market in this article. Average daily rate is $320.48 (up 4.8%), also the highest here by a wide margin. Occupancy sits at 45% (up 1.1%), the lowest on this list, which largely reflects the seasonality effect. Total active listings sit at 6,848, down 4.6% over the past year.
Financing note: Distressed Galveston deals often need creative underwriting. Harpoon Capital can qualify Galveston purchases on TTM actuals or STR Narrative revenue projections, and offers cash-out refinance once a value-add property is stabilized, useful for investors buying below market from a motivated seller.
Sources: Zillow Home Value Index↗ · Redfin Market Data↗ · BNBCalc Galveston County STR Guide↗ · AirDNA↗
Investor Takeaway: Don't read Galveston's AirDNA score as a warning sign. Read it as mostly a seasonality effect sitting on top of the highest STR revenue numbers on this list, in a market where distressed pricing in specific neighborhoods is creating real negotiating leverage right now. This is the one market on this list where the headline score and the actual opportunity point in different directions.
| MARKET | AIRDNA SCORE |
ANNUAL REVENUE |
AVG. DAILY RATE |
OCCUPANCY | YOY LISTING GROWTH |
|---|---|---|---|---|---|
| Abilene | 99 | $43,627 (+23.9%) |
$180.46 (+23.8%) |
77% (+7.6%) | +97.2% (1,037 listings) |
| Dallas | 89 | $35,760 (+2.6%) |
$179.60 (+4.6%) |
60% (-0.7%) | +14.4% (12,852 listings) |
| Killeen (Temple-Killeen) | 78 | $25,197 (+2.6%) |
$126.88 (+2.9%) |
59% (+0.8%) | +8.4% (1,150 listings) |
| Austin | 74 | $41,966 (+2.3%) |
$216.66 (-2.0%) |
59% (+4.5%) | -0.6% (14,846 listings) |
| Houston | 64 | $30,590 (+2.8%) |
$164.44 (+7.2%) |
56% (-3.4%) | +2.9% (15,373 listings) |
| Galveston | 57 | $45,373 (+6.2%) |
$320.48 (+4.8%) |
45% (+1.1%) | -4.6% (6,848 listings) |
Source: AirDNA, current as of 2026. Scores and figures reflect each market or submarket as defined by AirDNA and may not correspond 1:1 with city or county boundaries. As of October 2026
A few patterns stand out. Abilene is the clear outlier on revenue growth, up 23.9% year-over-year against single digits almost everywhere else. Galveston's revenue and ADR lead the state in dollar terms despite the lowest headline score, a reminder that the composite AirDNA score and raw earning power don't always move together. Austin and Galveston are the only markets here where STR listings are shrinking, either a sign of cooling demand or of consolidation among stronger operators.
Texas's real estate landscape offers a strategy for nearly every type of investor:
Market-level data is a starting point, not a substitute for underwriting the specific property, neighborhood, and rental strategy in front of you. Texas leaves almost all short-term rental regulation to individual cities, Dallas's rules are on hold in court, and Galveston rewrote its rules in late 2025, so confirm the specific rules for your address before you close.
If you are ready to invest in one of these markets, start with our Texas DSCR loans page.
Sources: Zillow Home Value Index & Rental data, Redfin housing market data, BiggerPockets Market Finder, AirDNA market and submarket data (airdna.co), BNBCalc Abilene, Austin, Dallas, Fort Worth, Houston and Galveston County STR guides. Data collected as of October 2026, ahead of the 2027 investing season.
Yes, Texas is widely considered one of the most landlord-friendly states in the country. There's no rent control, no cap on security deposits, and no statewide short-term rental license or registry. Local cities do set their own STR zoning and permitting rules, so confirm the specific ordinance for your city before you buy.
No. Out-of-state and first-time investors can buy investment property in Texas without any license. A DSCR loan qualifies you primarily based on the property itself rather than your personal income or professional credentials, which is part of why it's such a common financing tool for out-of-state buyers.
A DSCR (Debt Service Coverage Ratio) loan qualifies a borrower primarily based on the property (its rent, value and location) relative to its mortgage payment, rather than the borrower's personal income or tax returns. If the property's projected or actual rent covers the mortgage payment (a DSCR of 1.00x or higher), it's generally easier to qualify, and Harpoon Capital also offers options for deals below 1.00x.
Galveston's AirDNA score is pulled down mostly by a weak Seasonality score (46), with a soft Rental Demand score (52) adding to it, which reflects how concentrated its tourism demand is around summer and holidays. Its actual Annual Revenue ($45,373) and Average Daily Rate ($320.48) are both the highest of any Texas market in this article, so the low composite score mainly reflects seasonal concentration rather than weak earning power.
Harpoon Capital's DSCR loan program allows as little as 15% down on qualifying purchases, up to 85% LTV, with cash-out refinances available up to 80% LTV. Exact terms depend on the property, credit profile, and DSCR ratio. Fill out our DSCR Loan Application to see specific numbers for your deal.
Ready to Run the Numbers on a Texas Deal?
Whether you're eyeing Abilene's growth numbers or a distressed deal in Galveston, get a same-day rate and terms with our two-minute DSCR quote form, or explore the full Texas DSCR Loans Program to see how we qualify the property, not just the borrower.
This article is for informational purposes only and does not constitute investment, legal, or financial advice. Harpoon Capital encourages investors to conduct independent due diligence before making any real estate investment decision.
