Profitability of Texas Homes

Tierra Grande, a quarterly publication of the Real Estate Center at Texas A&M in its October edition had an article with the above title.  The article measured the profitability of Texas single family homes.  Guess what?  The Austin-Round Rock area had the highest average rent in the state.  Not surprisingly the area also had the highest average home prices in the state and even surpassed the national average.  Although the higher home prices in our area can eat away from the net rent yield which was calculated to be 2.43% it was still higher than the dividend yield for Home Depot and Lowes and just about a half a percent lower than McDonald’s.  What the article “didn’t” state is that when appreciation is added to the equation an Austin area real estate investment runs away from the pack.  The latest statistic from the Austin Board of REALTORS® stated that the average home price increased 5% from September 2014 to September 15.

It just makes good sense to own Austin area residential real estate.