Real Estate Investing in Waco, TX: 2026 Market Guide

Real estate investing in Waco, TX is a bet on an affordable college town in Central Texas. The typical Waco home is worth about $192,000, and houses rent for around $1,700 a month.^1,2 That's a gross rent-to-price ratio of about 10.6%, well above most large U.S. cities.

Waco grew from about 138,500 residents in 2020 to about 147,800 in 2025, a gain of about 6.7%.³ The city sits on I-35 about halfway between Dallas and Austin, and Baylor University enrolled 19,858 students in fall 2025.⁴ Many renters here are families, workers and students who live in single-family rental homes.

Why investors are watching Waco in 2026

• Low entry prices. The typical Waco home is worth about $192,000, and homes go under contract in around 54 days.¹
• A large university. Baylor enrolled 19,858 students in fall 2025, which supports rental demand near campus.⁴
• New manufacturing jobs. Graphic Packaging's new Waco mill brought about 230 jobs, and Walmart's new milk plant in nearby Robinson more than 400.^5,6
• Strong rent relative to price. At about 10.6% a year, the gross rent-to-price ratio leaves more room than in most big metros.^1,2

Waco housing and rental market in 2026

Waco prices are flat to slightly lower. Zillow's typical home value of about $192,000 is down 0.6% from a year ago, and homes go under contract in around 54 days.¹

Rents are flat. The average house rents for about $1,700 a month, up about $5 from a year ago, with about 184 houses listed for rent and an average of about 53 days on the market.² Across all rentals, including apartments, the average is about $1,495, down about $5.² Area apartment vacancy was about 10% in mid-2026, and about 906 more units were under construction.⁷

• Typical home value: ~$192,000, down 0.6% year over year.¹
• House rent: ~$1,700 a month, up ~$5 year over year.²
• All rentals: ~$1,495 a month, down ~$5 year over year.²
• Days to pending: ~54 days.¹
• Gross rent-to-price: ~10.6% a year. Annual house rent ($1,700 × 12) ÷ typical home value ($191,915), before taxes, insurance, repairs and vacancy.

Gross rent-to-price is only a first screen. Before you invest in rental property, run the net numbers too, such as cap rate and cash-on-cash return, which account for taxes, insurance, repairs and vacancy. Texas has no state income tax and relies heavily on property taxes. Waco is split among several school districts, including Waco ISD and Midway ISD, so check each property's full tax bill before you buy.

Jobs, growth and population: what's driving demand

Waco's economy leans on education, health care and manufacturing. The Greater Waco Chamber says the city's two nonprofit hospitals, Providence and Baylor Scott & White Hillcrest, are two of the top five employers in the area.⁸ Graphic Packaging opened a roughly $1 billion recycled paperboard mill in Waco in late 2025 with about 230 jobs, and Walmart opened a $350 million milk plant in nearby Robinson in April 2026 with more than 400 jobs.^5,6 VanTran Transformers moved into a 430,000-square-foot plant in 2025 and expects to add about 700 jobs over five years.⁹ Not every employer is growing: Hello Bello filed notice in September 2026 to lay off 67 workers at its Waco plant.¹⁰

Baylor shapes much of the rental market. Its student body grew about 23% over the decade to fall 2024, then dipped to 19,858 in fall 2025, and developers keep adding student housing near campus.^4,11 Short-term rentals are tightly regulated. Every one needs a city license and pays a 15% hotel tax, and since June 2021 owners who don't live on site can no longer get a special permit to run one in Waco's main single-family zones.¹²

Waco neighborhoods and areas to know

Baylor area and South Waco

Close to campus, where developers keep adding student housing and rents have been slowly rising.¹¹ Student leases often turn over every year, so plan for more vacancy and wear.

Downtown and the Brazos riverfront

The city is starting a long-term riverfront redevelopment. The first private buildings at Barron's Branch could start as early as 2027 and still need final city approvals.¹³

East Waco and Elm Avenue

Across the river from downtown, where the city rebuilt Elm Avenue with new sidewalks and lighting and new hotels nearby have helped revive the area.¹⁴ Inspect older homes carefully.

West Waco and Lake Waco

Newer subdivisions in the Midway school district. A developer plans more than 2,000 homes west of Lake Waco, with construction expected to start within two to five years.¹⁵ Check HOA costs and school zoning.

Comparing Texas markets? See our 2026 market guides to Abilene, Amarillo, Corpus Christi, Dallas, Fort Worth, Frisco, Garland, Houston, Killeen, Laredo, Mesquite, Midland, Pearland, Round Rock, San Antonio, Sugar Land, The Woodlands and Tyler, or browse all of our real estate market guides by city.

Risks to weigh before investing in Waco

• New supply. Waco-area apartment vacancy was about 10% in mid-2026, with about 906 units under construction, and large new subdivisions are planned west of Lake Waco.^7,15 Understand real estate market cycles before you buy.
• Property taxes. Texas's 20% cap on yearly appraisal increases for non-homestead property is scheduled to expire after 2026.¹⁶ Rates also differ by school district, so two Waco homes at the same price can have different tax bills.
• Insurance and hail. The average Texas homeowners premium was about $3,500 in 2025, and Texas has had more billion-dollar weather disasters than any other state, including 48 from 2020 to 2023, and about two-thirds of them over the years were severe storms such as hail and wind.^17,18 Get quotes before you buy.
• Flash flooding. On June 14, 2026, three to four inches of rain flooded creeks and part of I-35 in the Waco area, and McLennan County was included in a state disaster declaration.¹⁹ Check drainage and flood history. Our guide to real estate market analysis walks through what else to check.

3 ways to invest in Waco rental property, including fractional real estate investing

There are three common ways to invest in rental properties in a market like Waco. They differ mainly in how much money you need up front and how much work you take on.

Buy a rental home yourself

Investment property loans typically require 20% to 25% down. On a $192,000 home, that's roughly $38,000 to $48,000 before closing costs and repairs. You also find tenants and handle maintenance, or pay a property manager. Our guide to choosing the right rental property covers what to check before you buy.

Buy a REIT or real estate fund

A REIT lets you invest with less money, but you own a slice of a large national portfolio rather than specific Waco homes. See more ways to invest in real estate without buying property.

Invest in fractional real estate online

Fractional real estate lets you buy shares of individual rental homes instead of the whole property. With a real estate investment platform like Tirios, you can invest in real estate online starting at $100 per share, through the website or the Tirios app. Our guide to investing in rental property online explains how it works. The team handles tenants and maintenance, and rent is paid out as quarterly dividends, which makes it a hands-off way to earn passive income from real estate.