What are property taxes on a rental property in Texas?

Texas's median effective property tax rate is 1.40% of market value per year. Rentals typically lose the homestead exemption, so Caprately screens them at about 1.54%. That works out to roughly $385 a month on a $300,000 property. Your actual bill comes from the county assessor and can differ significantly.

How much is landlord insurance in Texas?

Budget around 1.35% of the property's value per year in Texas, or about $338 a month on a $300,000 rental. Landlord (DP-3) policies usually cost more than a comparable homeowner's policy, and coastal or wildfire exposure can push the premium well past this estimate.

Is Texas a good state for rental property?

No state is good or bad on its own — what matters is the relationship between price and rent in the specific market you are buying in. What Texas does change is the carrying cost: at 1.54% tax and 1.35% insurance, a $300,000 rental carries $723 a month before the mortgage. Run the actual property through the calculator to see whether the rent covers it.

Texas rental property calculator

The same underwriting engine as everywhere else on Caprately, with Texas's actual carrying costs already filled in — so the verdict reflects what the property really costs to own here, not a national average.

Effective property tax: 1.54%; 1.40% published median · well above the national average
Landlord insurance: 1.35%; of value per year, well above the national average
vs. national average: +$344; per month on a $300,000 rental

What a rental costs to carry in Texas

Property tax and insurance only — before the mortgage, before management, before a single repair. These are the two expenses that change most when you cross a state line, and the ones most calculators estimate from one national percentage.

Purchase price	Property tax	Insurance	Monthly carry
$150,000	$193/mo	$169/mo	$362/mo
$250,000	$321/mo	$281/mo	$602/mo
$400,000	$513/mo	$450/mo	$963/mo
$600,000	$770/mo	$675/mo	$1,445/mo

Texas's published effective rate is 1.40% on owner-occupied housing. Rentals usually lose the homestead exemption — and some states assess them at a higher ratio outright — so these figures apply a uniform 10% uplift, giving 1.54%.

Property tax: Tax Foundation, from 2024 American Community Survey data (2024). Insurance is the rougher of the two — premiums are published in dollars rather than as a share of value, so treat it as an order of magnitude and get a real quote. County variation inside a state is often wider than the gap between two states, and the assessor's record is the only number that finally counts.

Interactive

Underwrite a rental in Texas

Every estimate below already carries Texas's tax and insurance rates. Change any assumption — or paste a listing — and the full analysis updates instantly.

Analyzing this as

Rent it out to a tenantDoes the rent cover the costs? You get a verdict.

Live in it myselfBetter off buying, or renting? You get a year.Switch

Import a deal

Use a property that's for sale. A “for rent” listing has a monthly rent but no purchase price, so there's nothing to buy and nothing to work out.

A link fills in the address. Copied text fills in the price and size too, plus the Rent Zestimate if the page shows one. Whatever it misses, you can type — it's never more than a number or two.

Nothing is scraped: the page is read in your browser, and only the address is ever sent to us.

The two numbers that decide it

You’re buying a property and renting it out to a tenant. Enter what it costs and what a tenant would pay — the rent is money coming in to you, not rent you pay. Everything else has a default you can change below.

Purchase price

Rent you'd collect

Per month · 1.02% of price

Not sure what it rents for? At $285,000 this needs $3,036/mo to clear every threshold, against a usual range of $1,887–$3,089/mo for this price. Check it against the listing’s Rent Zestimate, or two similar rentals nearby — you don’t need the exact number, just whether it can plausibly beat this one.

Property type

A detached house: you insure the whole structure and reserve for the whole structure.

State

Worth the two seconds — property tax runs from 0.29% of value in Hawaii to 1.88% in New Jersey, which is the difference between a deal and a loss.

Adjust the assumptions25% down · 6.67% · size not set

Down payment

Interest rate

Home size

ZIP code

Bedrooms

Bathrooms

Texas — property tax 1.54%/yr and insurance 1.35%/yr of value, upkeep reserves priced off the rent. State-level averages for screening — verify the actual tax bill and get a real quote.

Management, vacancy, and closing costs use standard rules of thumb. Switch to to fine-tune every assumption.

Fail

Doesn't meet your rental criteria

Max workable price: ~$272,000
You’re asking: $285,000

The price is about $13,000 above the most you could pay and still pass.

First to fail: DSCR — 1.12x against a minimum of 1.20x.

Where it stands

Monthly cash flow $171/mo vs min $0/mo
DSCR 1.12x vs min 1.20x
Cash-on-cash return 2.7% vs min 4.0%
Break-even occupancy 89.1% vs max 90.0%

Biggest uncertainty: the rent

At $2,900/moFAIL
At $3,035/moFAIL
Minimum rent required$3,036/mo

Every other input here is a price or a rate you can look up. The rent is usually an estimate, and it is the input the answer moves most on — check it against two real rentals nearby before you act on any of this.

Second uncertainty: the property tax

At $366/moFAIL
At $266/moFAIL
Most tax this supports$261/mo

That figure is a state median. Rates vary by county and school district within every state, sometimes by more than double, so the listing's own tax line is the number that settles it. The ceiling is 1.10% of the price a year. 23 of 51 states tax above that, starting with Massachusetts — in any of them this fails on tax alone.

Max workable price is based on your assumptions and screening criteria. It is not an appraisal, and not an estimate of market value. Assumes 25% down at 6.67% over 30 years, with tax and insurance at Texas rates. Change any of it under “Adjust the assumptions”.

If the rent comes in low

It only works at the top of the range. That's a deal resting on the rent landing at its best plausible number, which is a thin place to be.

It starts working once the rent reaches $3,036/mo.

Scenario	Rent	Cash flow	Verdict
Conservative	$2,610	-$54/mo	FAIL
Base(yours)	$2,900	$171/mo	FAIL
Optimistic	$3,190	$393/mo	PASS

The range is your rent plus or minus 10%, which is roughly how far a rent estimate is routinely wrong. Import a listing with market data configured and this becomes the range the actual comps support. No confidence percentage is shown, because nothing here has a validated error rate to base one on.

Income covers the loan 1.12x over — lenders and this screen want 1.20x.

Cash flow is positive at $171/mo, but the cushion is thin: one vacancy or one major repair puts the property in the red.

Property

$285,000 purchase · 25% down · 6.67% / 30yr

Gross monthly rent

$2,900

1.02% of price/mo

Monthly cash flow

$171

effective rent − operating expenses − mortgage payment

$2,755 − $1,209 − $1,375 = $171/mo

NOI (annual)

$18,552

(effective rent − operating expenses) × 12

($2,755 − $1,209) × 12 = $18,552

Cap rate

6.5%

annual NOI ÷ purchase price

$18,552 ÷ $285,000 = 6.5%

Cash-on-cash return

2.7%

annual cash flow ÷ total cash invested

$2,052 ÷ $76,950 = 2.7%

DSCR

1.12x

monthly NOI ÷ mortgage payment

$1,546 ÷ $1,375 = 1.12x

Break-even occupancy

89.1%

(operating expenses + mortgage payment) ÷ gross rent

($1,209 + $1,375) ÷ $2,900 = 89.1%

Loan amount

$213,750

purchase price − down payment

$285,000 − $71,250 (25%) = $213,750

Monthly P&I payment

$1,375

amortized loan payment (rate ÷ 12, term × 12)

$213,750 at 6.67% over 30 yrs = $1,375/mo

Annualized return if you sold in year 10

13.9%a year

Counts the $76,950 you put in up front, 10 years of cash flow, and the $191,904 left after paying off the loan and 7% in selling costs. Unlike cash-on-cash, it accounts for when each dollar arrives — which is what makes it comparable to a return quoted on a stock or a bond.

This is the least certain number on the page. Most of it comes from the sale, and the sale assumes 3.5% appreciation every year for 10 years. Change that one assumption and this figure moves further than any of the ones above.

Show the cash flows

the rate at which every flow below discounts back to zero

Now-$76,950
Year 1$2,052
Year 2$2,753
Year 3$3,479
Year 4$4,229
Year 5$5,005
Year 6$5,807
Year 7$6,637
Year 8$7,494
Year 9$8,381
Year 10$201,201

Year 10 includes the sale. Nothing here is money in your pocket until the property actually sells.

Projected equity growth over 10 years

Equity by year
Year	Equity
1	$83,538
2	$96,334
3	$109,662
4	$123,546
5	$138,010
6	$153,083
7	$168,793
8	$185,168
9	$202,242
10	$220,046

Make this one work

Worked backwards from your numbers — the two levers that bring it inside the criteria.

Max offer that passes

$272,000

$13,000 below your $285,000 — negotiate down

Rent needed to pass

$3,036/mo

$136/mo more than your $2,900 — you'd need a rent bump

“Deal” means it clears every screening bar — positive cash flow, DSCR 1.2+, and a 4%+ cash-on-cash return. Holding your other assumptions fixed.

Stress test

This deal already fails the criteria — the shocks below show how much deeper it goes.

Interest rate +1%
$26/mo cash flow
FAIL
Rent comes in 10% lower
-$105/mo cash flow
FLIPSFAIL
Vacancy hits 15%
-$119/mo cash flow
FLIPSFAIL
Operating costs +15%
-$10/mo cash flow
FLIPSFAIL
A $15k surprise repair
cash-on-cash 2.2%
FAIL

Each shock changes one assumption and re-runs the entire engine. Everything else stays exactly as you set it.

Your deals

Saved deals live in this browser. Share links carry the full analysis — send one to a partner and they see exactly what you see.

Texas rental property questions

What are property taxes on a rental property in Texas?: Texas's median effective property tax rate is 1.40% of market value per year. Rentals typically lose the homestead exemption, so Caprately screens them at about 1.54%. That works out to roughly $385 a month on a $300,000 property. Your actual bill comes from the county assessor and can differ significantly.
How much is landlord insurance in Texas?: Budget around 1.35% of the property's value per year in Texas, or about $338 a month on a $300,000 rental. Landlord (DP-3) policies usually cost more than a comparable homeowner's policy, and coastal or wildfire exposure can push the premium well past this estimate.
Is Texas a good state for rental property?: No state is good or bad on its own — what matters is the relationship between price and rent in the specific market you are buying in. What Texas does change is the carrying cost: at 1.54% tax and 1.35% insurance, a $300,000 rental carries $723 a month before the mortgage. Run the actual property through the calculator to see whether the rent covers it.

States that carry like Texas

Closest total tax-and-insurance load to Texas's.

All 50 states and D.C. →

Understand the numbers

What each metric means, what counts as good, and what it hides.

Cap rate
Cap rate is a property's annual net operating income divided by its purchase price — the yield the building throws off before any financing.
DSCR
DSCR is net operating income divided by debt service — how many times over the property's income covers its loan payment.
Cash-on-cash return
Cash-on-cash return is a year of cash flow divided by the cash you actually put in — down payment, closing costs, and rehab.
The 1% rule
The 1% rule says a rental should collect at least 1% of its purchase price in monthly rent — a screen, not an analysis.

Analyze a specific property See worked examples