Williamson County

Williamson County's raw numbers tell a clear story: at a median home price of $404,054 and median rent of $1,576, the gross rent-to-price ratio sits at 4.68%, which is well below the threshold most cash-flow investors require. The modeled cap rate of 3.04% confirms it. Run a conventional purchase at 20% down ($80,811), apply a 6.85% rate, and the monthly mortgage alone hits $2,118. Add $552 in estimated operating expenses and you're collecting $1,576 in rent against $2,670 in carry, producing negative $1,094 in monthly cash flow and a cash-on-cash return of -14.13%. That's not a rounding error; it's a structural condition of the market. The appreciation score of 13 out of 100 reflects the other pressure: home prices are down 5.85% year-over-year, meaning you are not being compensated on the appreciation side either. Nationally, this county ranks in the 9th percentile across 1,000 counties scored, and sits 193rd out of 243 Texas counties. The numbers place Williamson squarely in the difficult-to-underwrite category on both dimensions simultaneously.

Given those figures, this market does not suit a traditional buy-and-hold cash-flow investor at current prices and rates, and it does not suit a pure appreciation buyer while prices are trending down year-over-year. The only investor profile that might find traction here is a long-horizon buyer who underwrites to a specific sub-market thesis, one who believes current price softness is a temporary dislocation in a high-income, high-demand corridor and is willing to carry negative cash flow for several years waiting for that to resolve. The affordability index of 71 and median household income of $102,851 suggest the renter base is financially capable, which limits vacancy risk and supports rent collection quality, but those factors do not close a $1,094 monthly gap. A value-add operator could theoretically compress that gap by acquiring at a discount to the $404,054 median and forcing rents above the $1,576 median, but the starting point is punishing enough that the margin for execution error is thin.

The property tax carry in Williamson deserves its own line on your underwrite. Using the state-average effective rate of 1.80% (Tax Foundation 2024, with the important caveat that actual county and township rates may differ), the annual property tax on a $404,054 purchase runs approximately $7,273, and insurance at 0.50% adds another $2,020 annually. Combined, that is $774 per month in tax and insurance alone before a single dollar of principal, interest, maintenance, or management. At 1.80%, Texas's property tax burden is high enough that it meaningfully compresses any cap rate expansion you might otherwise capture. Texas has no state income tax, which benefits residents, but that advantage does not flow directly to a landlord's operating statement the way a lower tax rate would. Investors accustomed to markets with 0.8% to 1.0% effective rates need to recalibrate: in Williamson, taxes and insurance together consume 49% of the gross monthly rent before any other expense is paid.

The neighbor comparison exposes a structural problem with choosing Williamson for yield. The counties listed as comparables, including Willacy at a $169,393 median, Camp at $208,864, San Augustine at $175,648, and Zapata at $122,521, all carry median prices between 30% and 70% lower than Williamson's. Even Shackelford County at $148,074 sits at less than 37 cents on the dollar relative to Williamson. All of them carry overall scores within a few points of Williamson's 42, meaning there is no meaningful quality premium embedded in Williamson's higher price from a composite investment scoring perspective. An investor prioritizing cash-flow math should look hard at whether those lower-priced markets generate more favorable rent-to-price ratios before committing capital to Williamson. The case for Williamson over those neighbors rests entirely on non-quantified factors such as liquidity, tenant quality, and long-run price support from the Austin metropolitan corridor, none of which appear in the current return numbers. If you are underwriting to the numbers as they stand today, the neighbors win on yield. If you are underwriting to a thesis about where institutional capital and population growth ultimately settle in central Texas, that is a different conversation, and one you need to stress-test against a 5.85% trailing price decline before committing.