Friends in Austin: Killeen, Temple, or Elgin?

18 Replies

Hi all.

I'm looking into the surrounding Austin area for my first rental investment property.

My agent found me 10 properties matching what I'm looking for, and we boiled it down to 3.

Since I'm out of state and unfamiliar with the area, I was hoping to gain some insight and tips from those familiar with the area. The 3 we've short-listed are located in Killeen, Temple, and Elgin.

Cap rate for Elgin property would be about 8%.

For Killeen property would be 13%.

Temple property would be 12%.

Appreciate any insight on these towns!

Thanks.

@Saumon E. I’m not familiar with the Elgin market, but I do know that Killeen and Temple are pretty hot right now. They’re pretty close to each other, but Killeen is closer to the army base (ft hood) and it’s also known to be “not as nice” of an area. It’s getting better, but I would choose temple any day if the return is similar and you can afford either option. It’s closer to Austin, so appreciation will probably be better. You’ll probably have better tenants there and less risk of a soldier getting out of contract if they get deployed.
Originally posted by @Jason Perkins :

I agree with @Tyler Hogan on this one.  Temple in located right on the I35 corridor, is a nicer town than Killeen, and is seeing a good amount of new development in the area. 

 That is ABSOLUTELY true!  There is new construction going on on almost every side of town!

I'm a Killeen agent. All else being equal, the comments above are correct. Temple is probably the better play because of I-35 and other growth.

13% cap rate is crazy high, though. Is it an off-market property? Are you looking at single family rentals?

Some paper math works out to those kinds of numbers on the cheapest stuff, but then you need to be REALLY wary, definitely of Killeen and probably Temple, too. Those paper returns don't always materialize and the property can be a massive headache. Make sure that a property manager is willing to manage it before you buy (even if managing it yourself - a property manager's endorsement will validate that you are in a decent area).

@Brian Adams its on the market and good point in me checking with a property manager. my agent told me the property already has a PM and they've been doing a good job managing it. I'll have to investigate that for myself.

@James Stevens and @Jason Perkins that's always a good sign! I'm definitely siding more with Temple now. 

Looks like next steps might be getting it under contract and then inspected and appraised!

Yes - just to clarify - both Temple and Killeen are great areas for rentals. Just have to be wary of certain areas and the deals that on paper are best often are in the areas or rent ranges that you are best avoiding unless you are local and want to do property management yourself or with an inhouse PM.

Hey everyone,

I have a duplex in Killeen right now. If you pick the right area in Killeen it could be a great investment. With the military playing a factor in Killeen, there are almost always tenants. We use Linnemann to manage and they do great work. Never had a vacancy for more than 2 weeks. My hesitation about Temple is that most of the clientele that I would want renting my place want to live in Belton for the good school district. Have you considered Harker Heights? My experience with Heights is it is still closely connected with the military, but usually where higher ranking soldiers settle in with families. I'm happy to discuss further if you want to send me a message. Also open to feedback on what others think about the Killeen area for investing. 

Originally posted by @Bobbie Shae Melton :

Hey everyone,

I have a duplex in Killeen right now. If you pick the right area in Killeen it could be a great investment. With the military playing a factor in Killeen, there are almost always tenants. We use Linnemann to manage and they do great work. Never had a vacancy for more than 2 weeks. My hesitation about Temple is that most of the clientele that I would want renting my place want to live in Belton for the good school district. Have you considered Harker Heights? My experience with Heights is it is still closely connected with the military, but usually where higher ranking soldiers settle in with families. I'm happy to discuss further if you want to send me a message. Also open to feedback on what others think about the Killeen area for investing. 

 I agree about the people preferring the Belton school district over the Temple one.  But, just for the record, over half (guestimating) of the addresses that say "Temple" are actually in the Belton school district.  (Just saying)

I'm a little biased as I grew-up in Killeen up until I graduated from High School in 2000 and moved to Austin where I still currently stay. If you look at U.S. News & World Report for the "125 Best Places to Live in the USA" the top 5 Texas cities are as follows (w/ corresponding overall ranking): #1 Austin, #14 San Antonio, #18 Dallas-Fort Worth, #26 Houston and finally #90 Killeen! I have no idea of their ranking criteria but that was an astonishing ranking to me. And as a local, late-30's area resident, looking for restaurants, bars, nightlife, shopping, thing-to-do, sight see... I'd choose Killeen over Temple, but again, I grew up here and maybe my family and friend townies are just staying around this area. I'm also unaware of schools but I'd say I made it out of Killeen Independent School District unscathed ha.

@Saumon E. - I’ve lived in Killeen and other nearby cities three different times for over 15 years since 1997 (thanks to the Army). Yes, there are areas you want to avoid but just about every city has areas like that. I have a SFH on the east side of Killeen and haven’t had issues with keeping it rented. As someone else mentioned thanks to Fort Hood there are always people moving in. The main highway through town also just got upgraded to I-14 awhile back. And the Texas A&M campus in the south of the cIty continues to grow. Plus other nearby cities (Harker Heights, Nolanville, Copperas Cove, etc) are all great areas to look at for properties. Let me know if you have any specific questions as I’m familiar with property managers, agents, and others in that area. Good luck in making your choice!!

Hello all,

I live and invest in Temple. I haven't invested in Killeen, but have done a lot of research and it is a great market for multifamily properties and SFR. I just prefer the Temple area because I like to be close to my properties. Like others have said above you just need to research the location and you'll be fine. Like everyone who knows anything about real estate has ever said, "Location, Location, Location."

If you have any questions I am always glad to help anyone looking to better their lives with real estate.

@Fernand Foronda Tolentino hello, I know I'm late to this party but I just arrived in town. Do you happen to work in Austin still? If so, are there any Real estate meet ups do you in the Killeen and Austin area?

I'm new in town and would like to meet network with other investors for future projects.

Thank you in advance and Merry Christmas!

Hi, @Adrian Fajardo ! You're right to be interested in this area of Central Texas. Temple is a hot market right now-great job market, low cost of living. We do have a great RE meetup here: https://www.meetup.com/Masterm...

I prefer to avoid Killeen and Ft Hood, as do most of my investor friends. Too much turnover, damage and financially insecure tenants. Let me know if you have any specific questions about Temple.

@Laura Sulak thank you for your response! I have added myself to that group. I look forward to attending the meetings when I get back in town.

I'll remember your advice when looking for more properties.

I appreciate it! I'll send you a PM instead.