Rent vs buy calculator — Texas

Frequently asked questions

How does this rent vs buy calculator find break-even?

It compares cumulative renting cost to cumulative owning cost net of equity (principal paydown plus appreciation). Break-even is the first year owning costs less than renting.

Does this include opportunity cost of the down payment?

Yes. The rent path includes foregone investment returns by compounding the down payment at your chosen investment return assumption.

Can I save rent vs buy scenarios?

This calculator does not save your session. Use a free Veld account to save assumptions, compare scenarios, and track your property decisions over time.

Do Texas property taxes affect cash flow in this calculator?

Yes—and they matter. Texas has no state income tax but property taxes are among the highest in the country. Default inputs start with HUD-based rent estimates; enter your expected annual property tax and insurance load in the expenses field to model real cash flow.

What is a good cap rate in Texas?

Residential investment cap rates in Texas vary by market. DFW and Houston investors typically see 5.5–7% on SFR and small multifamily as of 2024–2025, while Austin and premium suburban markets compress closer to 4.5–5.5%. Texas's high effective property tax (~1.6–2% of value depending on county) meaningfully reduces NOI—enter your actual tax bill rather than using a national default to get an accurate cap rate.

How do I estimate cash-on-cash return in Texas?

Cash-on-cash return in Texas depends heavily on your down payment, financing rate, and how accurately you model property taxes and insurance. With a 20% down payment and 7–8% mortgage rate, many Texas SFR deals run 4–8% CoC. High property taxes reduce NOI, which compresses CoC relative to lower-tax states—use local tax estimates, not a national rule of thumb.

How should I evaluate rent vs buy in Texas?

Use local rent near about $1,350/month, purchase levels around $339,500 median home prices, and realistic mortgage assumptions. Break-even timing changes quickly when appreciation, rent growth, and opportunity cost assumptions shift.