Question 1

What do property taxes actually run on an Austin-area investment property?

Accepted Answer

Budget the combined all-entity rate, not the county line. Travis County's own FY2026 rate is $0.375845 per $100 of taxable value, and the city of Austin rate for FY2025-26 is reported at $0.524017 per $100, but those are two pieces of a bill that also includes the school district and any MUD or PID. Combined effective rates are reported around 1.78% to 2.10% in Travis County and 2.00% to 2.35% in Williamson County. Hays County is the weak spot: we could not find a combined figure we'd stand behind in writing, so pull the actual rate for the address from the Hays County tax office before you underwrite it. The rate is address-specific, so get the real one before you commit, and have your CPA confirm how it lands on your return.

Question 2

Why does the tax bill jump the year after I buy?

Accepted Answer

Because you bought the seller's capped value, not your own. Texas homestead properties carry a 10% annual cap on appraised value increases, and investment property qualifies for neither the homestead exemption nor that cap. If the seller lived there, the bill you see during diligence can reflect years of capped value, and the go-forward bill on your investor purchase resets toward market. Underwrite the escrow at the reassessed number. On a conventional file that escrow feeds straight into your qualifying ratios, so getting it wrong at the start is what kills the loan two weeks in.

Question 3

Does the 20% non-homestead cap protect my rental?

Accepted Answer

Only if you hold it through a full January-to-December year, and only through tax year 2026 as the law stands. Since tax year 2024 a 20% annual cap applies to the net appraised value of qualifying non-homestead property. The owner has to have held it for a full calendar year, Travis CAD states the value threshold as $5.16 million or less, and no application is needed because the appraisal district applies it automatically. The catch worth planning around: the circuit breaker is authorized only for tax years 2024, 2025 and 2026 and expires after 2026 unless the Legislature extends it. If you're modeling a 2027 hold, don't assume the cap survives. Talk to your CPA about your specific situation.

Question 4

Which county gives me the better carry, Travis, Williamson, or Hays?

Accepted Answer

The lower-cost house doesn't always mean the lower-cost bill. As of July 2026 the median sale price was $520,000 in Travis County, $415,000 in Williamson, and $367,700 in Hays. Run those against the reported combined rates and the ranking can flip: a $415,000 Williamson County house at the top of its 2.00% to 2.35% range escrows more annual tax than a $520,000 Travis County house at the bottom of Travis's 1.78% to 2.10% range. That's illustration from published medians and rate ranges, not a quote on any specific property. The point stands either way. Price the address, not the county.

Question 5

How much should I budget for insurance on a Central Texas rental?

Accepted Answer

More than you paid last year, and the trend matters more than any single quote. The Texas Department of Insurance put the statewide average homeowners premium at $3,291 in 2024, after recorded statewide increases of 21.1% in 2023, 18.7% in 2024, and 4.3% in 2025. Texas had the fourth-highest home insurance premiums in the country at the end of 2025 and is projected fifth by the end of 2026. Texas also uses a file-and-use system, so insurers can put an increase in place before the state finishes reviewing it. We don't publish an Austin dollar figure because the available Austin-specific numbers disagree by about 30%. Get a real bound quote during diligence, because insurance escrow is part of your qualifying payment.

Question 6

Conventional or DSCR for an Austin rental right now?

Accepted Answer

In this rental market, documented income is often the loan that survives the ratio test. Austin metro apartment occupancy ran roughly 86% to 88% as of June 2026, about three to four points under the national average, and 73% of units were advertising a concession. Advertised rent is overstating effective rent across most of this market, which squeezes the debt service coverage ratio on a DSCR loan. If your tax returns support the file, conventional financing qualifies on you instead of on a rent number that may not hold, and it's usually the lower long-term cost. If they don't, DSCR still gets the deal done. Send us the address and both sets of numbers and we'll show you the two side by side.

Question 7

What credit score do I need for a conventional investment loan in Austin?

Accepted Answer

580 and up, which is the lowest floor of any program we write. The trade is that this one is fully documented: unlike our bridge and DSCR products, a conventional investment loan wants real income documentation. Non-owner-occupied only. Subject to underwriting.

Question 8

What is 20% down at the $435,000 Austin metro median?

Accepted Answer

20%. We go up to 80% LTV on a non-owner-occupied purchase or refinance, so on a purchase at the $435,000 Austin-Round Rock-San Marcos median for July 2026 that is $87,000 from you (435,000 x 20% = 87,000). Before you commit to this route, run it against a DSCR loan: same 80% ceiling, no income documentation, and with Austin rents where they are the DSCR test is what usually decides which one actually funds. Subject to underwriting.

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