Cash Flow Investing in Houston, TX
Data-driven cash flow analysis for Houston, TX — score breakdown, key investment metrics, and how it compares to other markets.
Last updated: May 2026
Score Breakdown
Key Metrics for Cash Flow
Cap Rate
6.3%
Good
Rent-to-Price
0.57%
Below 1% rule
Vacancy Rate
8.3%
Elevated
Property Tax
2.03%
Above average
Cash Flow Investment Thesis
Houston offers massive scale and diversity across neighborhoods but watch for flood zone exposure and high property taxes. The energy sector recovery has boosted job growth and rental demand.
How Houston Compares
| Rank | City | Cash Flow Score | Cap Rate | Median Price |
|---|---|---|---|---|
| #35 | Nashville, TN | 3.8 | 5.2% | $400,000 |
| #36 | Phoenix, AZ | 3.8 | 4.9% | $385,000 |
| #37 | Portland, OR | 3.8 | 4.2% | $480,000 |
| #38 | Houston, TX | 3.7 | 6.3% | $265,000 |
| #39 | Chicago, IL | 3.5 | 6.0% | $275,000 |
| #40 | Dallas, TX | 3.5 | 5.7% | $340,000 |
| #41 | Las Vegas, NV | 3.4 | 4.8% | $380,000 |
Showing markets ranked near Houston for this strategy.
Quick Math: Estimated Annual Return
Based on median market data. Your actual returns will vary based on specific property, financing, and management costs. Always run your own analysis before investing.
Frequently Asked Questions
What is the cash flow score for Houston, TX?
Houston, TX scores 3.7 out of 10 on our cash flow score, ranking #38 out of 52 markets we track. Weighted composite: rent-to-price ratio (30%), cap rate (30%), low vacancy (20%), low property taxes (20%). Scale 0–10.
Is Houston a good city for cash flow investing?
Houston, TX ranks #38 for cash flow investing with a score of 3.7/10. While not a top-ranked market for this strategy, it may have strengths in other investing approaches.
What is the average cap rate in Houston?
The average cap rate in Houston, TX is 6.3%. The median home price is $265,000 with a median monthly rent of $1,500, resulting in a rent-to-price ratio of 0.57%.
What are the property taxes in Houston?
The effective property tax rate in Houston, TX is 2.03%. On a $265,000 property, that translates to approximately $5,380 per year in property taxes.
How does Houston compare to other cash flow markets?
Among our 52 tracked markets, Houston, TX ranks #38 for cash flow investing. Other markets may be stronger for this particular strategy, though it may excel in different approaches.
Does Houston meet the 1% rule?
Houston, TX has a rent-to-price ratio of 0.57%, which falls significantly below the 1% rule. However, the 1% rule is a rough guideline — individual deals can still cash flow well in this market.
Run Your Own Numbers for Houston
Use our free calculators pre-filled with Houston, TX market data, or adjust the numbers for your specific deal.
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