Austin single-family rentals are running gross yields of roughly 4.8% to 7.5% in 2026, depending on the submarket. The national average is closer to 7% to 9%. So if you came here looking for an investor-paradise cash flow story, this is not it. (Sorry, not sorry.) Austin is an appreciation play with decent yield and very good tenant quality. That is the honest setup.
Lets get into where the money actually works.
Im Ed Neuhaus, broker-owner of Kendall Creek Properties. We manage long-term single-family rentals across the Austin metro, and Im also the broker-owner of Neuhaus Realty Group on the sales side, so I see both ends of the deal. The numbers below come from what we actually see in our portfolio plus current Austin MLS data, not a Zillow estimate someone screenshotted in a Facebook group.
Setting The Table: What Austin Yields Actually Look Like
The math is simple. Gross yield equals annual rent divided by purchase price. A $400k house that rents for $2,400 a month gives you $28,800 in annual rent. That is a 7.2% gross yield. Good number for Austin. Not a good number compared to a $200k rental in Killeen that rents for $1,800. (That Killeen house is hitting 10.8% gross. So why arent we all buying Killeen? Appreciation. Tenant quality. Capex. The full picture matters.)
Austin SFH gross yields right now cluster between 0.4% and 0.6% of purchase price per month, which annualizes to 4.8% to 7.2%. Anything claiming to be much higher in Austin proper is either a flip, a rough property, or someones spreadsheet hopes and dreams.
So why Austin at all? Three reasons that show up over and over in our portfolio:
- Appreciation. Even after the 2022-2024 correction, long-term Austin appreciation has been very strong. Yield plus appreciation is the real return.
- Tenant quality. Our average tenant in the Austin metro is a working professional or a dual-income household. They pay on time. They take care of the property. We rarely turn over before 18 months.
- Lower capex risk. A lot of Austin metro inventory is post-2000 construction. Roof, HVAC, foundation issues are less frequent than what you would see in older Texas markets.
That last one is huge and most spreadsheets ignore it. I have seen a Houston rental clear 10% gross on paper, then eat $14k in a single year on a foundation issue. The honest yield was negative. (No big deal right.)
What To Look For In An Austin LTR Property
Before I rank the neighborhoods, here is the screen we run when an owner asks us to look at a potential purchase. This is also what you should be screening for if you are buying without us:
- Schools. Solid school ratings drive tenant demand and dramatically reduce turnover. A household in a good elementary zone tends to renew. They put down roots. (Pun intended.)
- Drive time to a major employer. Apple in north Austin, Tesla southeast, downtown, the Domain. If a property is more than 35 minutes from at least one of those during rush hour, your tenant pool shrinks.
- HOA-light or no HOA. Heavy HOAs eat into your yield and slow your lease-up. Some Austin HOAs also restrict rentals. Read the docs before you buy.
- Newer construction. Post-2010 build, ideally. Lower capex risk. Lower insurance premiums. Easier to insure period, which matters more in Texas every year.
- Sub-$500k purchase price. Above $500k, yields fall off a cliff in Austin. The rent does not scale linearly with purchase price.
That last one is the rule most investors fight me on and they shouldnt. A $700k Austin house does not rent for $4,200. It rents for $3,300, maybe $3,500. The math gets worse the higher you climb.
If you want the full picture on operating expenses (taxes, insurance, vacancy, capex, all of it), read the hidden costs of owning a rental in Austin. That post covers what the yield number doesnt.
Top 10 Austin Long-Term Rental Neighborhoods For 2026
Ranked roughly from highest gross yield to lower. All ranges are realistic 2026 acquisition costs and market rents based on what we see in our portfolio and current Austin MLS data. Verify with current comps before you write an offer, obviously.
1. Pflugerville (78660, 78664)
- Entry price: $325k to $425k
- Market rent: $2,100 to $2,600 per month
- Gross yield: 6.0% to 7.5%
Pflugerville is the boring answer and the right answer. Solid schools (Pflugerville ISD has come a long way), growing employer base, stable tenants who tend to renew. We manage a lot of properties here and turnover is among the lowest in our portfolio. The catch is that everyone else figured this out too, so good inventory moves fast. (Welcome to 2026.)
2. Round Rock (78664, 78681)
- Entry price: $400k to $525k
- Market rent: $2,300 to $2,900 per month
- Gross yield: 5.5% to 6.8%
Same playbook as Pflugerville with a little more polish, a little more name recognition, slightly higher entry. Round Rock ISD has been strong forever and that drives tenant demand. Dell employees, retail, healthcare workers. Stable tenant base.
3. Kyle and Buda (78640, 78610)
- Entry price: $300k to $400k
- Market rent: $1,900 to $2,400 per month
- Gross yield: 6.0% to 7.0%
Yields look great. The catch is the commute. If your target tenant works at Tesla or anywhere on the eastern Austin loop, fine. If they need to be in downtown or north Austin five days a week, this is a tougher sell. Hays ISD ratings are mixed by campus so check the specific elementary zone, not just the district average.
4. Manor (78653)
- Entry price: $275k to $375k
- Market rent: $1,800 to $2,300 per month
- Gross yield: 6.5% to 7.5%
Manor is one of those quietly working markets. Newer construction is the norm here, Tesla is right there, and the entry price still makes the math work. Manor ISD is the question mark and the reason yields stay high. Some campuses are improving. Drive the area before you write a check.
5. Hutto (78634)
- Entry price: $325k to $425k
- Market rent: $2,000 to $2,500 per month
- Gross yield: 6.0% to 7.0%
Hutto is what Pflugerville was five years ago. A little less competitive on the buy side, similar tenant profile, and proximity to the Samsung Taylor build. Schools are improving. If you want a Pflugerville-style deal at a slightly better entry, Hutto is the call.
6. Cedar Park (78613)
- Entry price: $475k to $625k
- Market rent: $2,500 to $3,200 per month
- Gross yield: 5.2% to 6.0%
Cedar Park is the trade. You pay more upfront, the yield is lower, but Leander ISD is one of the strongest school systems in the metro and tenants who land here tend to stay for years. Renewal rates are excellent. Pick this market if your strategy is appreciation plus stability, not maximum yield.
7. Leander (78641)
- Entry price: $400k to $525k
- Market rent: $2,200 to $2,800 per month
- Gross yield: 5.0% to 6.0%
New construction is everywhere out here and that is both the appeal and the risk. Lower capex on day one. But if you buy in a brand-new section, you are competing with the builder selling identical houses next door, which can soften both rent growth and resale. Buy in an established section if you can.
8. South Austin (78745)
- Entry price: $475k to $625k
- Market rent: $2,500 to $3,100 per month
- Gross yield: 4.8% to 5.8%
78745 is closer to downtown and the tenant pool is bigger and more diverse. Older housing stock means higher capex risk (1970s and 80s ranches make up a lot of the inventory). Yields are lower but rent demand is rock solid. This is a market where appreciation has historically carried the return.
9. Del Valle and SE Austin (78617)
- Entry price: $325k to $425k
- Market rent: $1,900 to $2,400 per month
- Gross yield: 5.8% to 7.0%
Tesla-adjacent. Newer subdivisions. The yield math works and there is genuine job growth pulling tenants. Del Valle ISD is the limiting factor, same as Manor. Know which elementary you are buying into.
10. East Austin (78721 and 78723)
- Entry price: $400k to $525k
- Market rent: $2,200 to $2,800 per month
- Gross yield: 5.0% to 6.0%
The gentrification arc continues but its slower than it was 2018 to 2022. Some pockets are now genuinely premium, others are still transitioning. Tenant pool skews young professional. Older housing stock so factor capex carefully. This is a pick-the-block market, not a pick-the-zip-code market.
Neighborhoods To Skip For Long-Term Rental Investment
Some Austin markets are great places to live and bad places to be a rental investor. Honest list:
- 78701, 78703, 78704 cores. Acquisition cost has scaled way past rent growth. Yields here run below 4%. Beautiful neighborhoods, terrible investment math.
- High-HOA condo buildings. HOA dues eat the yield. Resale is harder. Many buildings restrict leases or require approval. Skip.
- 78746 (Westlake). Luxury market. Sub-3% yields are normal. Tenant pool is small because anyone who can afford the rent can usually afford to own. Hard to lease.
If you already own in one of these markets and youre wondering whether to sell or rent, that decision tree is its own conversation. Read the sell-or-rent breakdown here before you decide.
Cap Rate Vs Gross Yield: The Number That Actually Matters
Gross yield is the marketing number. Cap rate is the honest one.
Cap rate equals net operating income divided by purchase price. NOI is rent minus everything except your mortgage. Property tax, insurance, vacancy reserve, property management, capex reserve, all of it.
In Austin, cap rates run roughly 200 to 300 basis points below gross yield. So that beautiful 7.0% Pflugerville gross yield is more like a 4.0% to 5.0% cap rate after expenses. Still respectable. Just not what the spreadsheet on the back of a napkin showed you.
Texas property tax is the biggest yield killer. Most Austin metro counties run 2.0% to 2.5% of assessed value per year. Insurance has been climbing. PM fees run about 8% of collected rent in our market (we have a full breakdown of Austin PM fees if youre comparing). Vacancy and capex reserves should be at least 5% and 5% if youre being conservative.
Run the cap rate before you write the offer. Not after.
The Honest Take: When Austin Works And When It Doesnt
Austin is an appreciation play, not a cash flow play. If your strategy requires 8%+ cash-on-cash return year one, you should be looking at Houston, the Dallas suburbs, San Antonio, or Texas tertiary markets like Killeen, Waco, or Lubbock. The math just works better there for yield.
If you want appreciation plus a decent yield plus tenant quality plus low capex risk, Austin works. Especially the suburbs in this list.
For most owners we work with, the right move is one or two Austin SFH rentals as part of a broader portfolio, not Austin as the whole portfolio. (Concentration risk is a real thing. Ask anyone who was all-in on a single market in 2008.)
One more thing. If youre buying with the intent to do a 1031 exchange into Austin, theres a whole separate set of rules to think about. The Austin 1031 exchange guide walks through that.
Frequently Asked Questions
What is a good gross rental yield in Austin in 2026?
Anything from 6.0% to 7.5% gross is solid for the Austin metro right now. Pflugerville, Hutto, Manor, and Del Valle are the markets where those numbers are realistic on an SFH purchase under $425k. Anything claiming 9% or 10% gross in the Austin metro deserves a hard look. Its probably wrong, or the property has issues.
Should I buy a rental in Austin proper or in the suburbs?
For yield, the suburbs. Pflugerville, Round Rock, Hutto, Kyle, and Manor consistently outperform Austin proper on gross yield. For appreciation, both work, but central Austin has historically had higher appreciation. The trade is yield now vs appreciation later. Most of our owners do better with the suburb yield play.
Whats a realistic cap rate for an Austin single-family rental?
Roughly 4.0% to 5.0% in the better-yielding suburbs (Pflugerville, Hutto, Manor, Del Valle). Closer to 3.0% to 4.0% in central Austin. Below 3.0% in Westlake and the urban core. Cap rate is gross yield minus all operating expenses divided by purchase price, so it varies based on your actual tax bill, insurance, and reserves.
How much should I budget for property management?
Roughly 8% of collected rent in Austin, plus a leasing fee when a unit turns. So on a $2,400 a month rental, thats about $192 a month plus one months rent or half a months rent for each lease-up depending on the company. We break this down in detail in our Austin PM fees guide.
Is the Austin rental market still worth investing in after the 2022-2024 correction?
Yes, if your time horizon is five to ten years and your strategy is appreciation plus moderate yield. The correction actually improved the entry math. Prices are more reasonable, rents have stayed stable to slightly up, and yields have compressed less than people think. Just dont expect 2021 numbers, in either direction.
Whats the biggest mistake new Austin rental investors make?
Buying too expensive a house. The yield math falls apart above $500k purchase price because Austin rent does not scale linearly. A $700k house does not rent for proportionally more than a $400k house. Most first-time investors buy the house they would live in, not the house that cash flows. Buy the cash flow house.
How Kendall Creek Properties Fits In
We manage long-term single-family rentals across every neighborhood in this list. If youre evaluating a purchase, we offer a free property analysis where we will tell you honestly what we think it will rent for, what the realistic yield looks like, and what the operating expense picture is going to be. Even if you dont end up using us to manage, the analysis is yours.
For the buy side, our sister brokerage Neuhaus Realty Group handles purchase representation across the Austin metro. Pulling investor-targeted comps is its own skill, not the same as buying a primary residence. If you want a broker who actually understands rental math, reach out here and well figure out the right next step.
If youre still deciding whether to self-manage or hire it out, this breakdown is the most honest answer I can give on that question. And if you already know you want a PM, heres how to pick one.
Have a property youre evaluating right now? Send us the address. Well run the numbers.