Faro Labs / Markets / McKinney, TX
McKinney real estate investment market
What a typical rental in McKinney, Texas costs, rents for, and returns: underwritten by Faro's own engine, not a scraped summary.
Returns assume 20% down at 6.75% over 30 years, 7% vacancy, and standard operating costs: Faro's default assumptions, the same ones every report starts from. Home value and rent trends as of 2026-05-31.
Difficult for both
At market rent, a typical McKinney rental runs $1,711 short each month, and home values moved −7.0% over the last year. Neither leg is carrying deals right now, which means the ones that work here are bought well below market rather than at it.
The price a deal actually works at
Faro models five price points for McKinney, from a weak buy to a strong one. The market-rate deal is $484,670; a good buy is $436,203 and a great one $387,736 roughly 20% below market value. Those are the bars a specific listing gets measured against when you run it.
How McKinney compares
Of the 210 markets Faro publishes, McKinney is the 71st most expensive to buy into: 22% above the median covered market, and the 156th strongest on rent-to-price. Within Texas it's the 4th priciest of 27 markets we cover. On the last year of home-value change it ranks 208th.
To break even at the default financing, a typical McKinney property would need about $3,952 a month in rent: $2,112 more than the $1,840 the market currently supports.
What each tier costs in McKinney
Faro models five price points per market. A listing gets measured against these bars, not against a national average.
| Tier | Purchase price | Market rent | vs. market rate |
|---|---|---|---|
| Weak buy | $533,137 | $1,748/mo | +10% |
| Fair buy | $508,904 | $1,803/mo | +5% |
| Market rate | $484,670 | $1,840/mo | — |
| Good buy | $436,203 | $1,932/mo | -10% |
| Great buy | $387,736 | $2,024/mo | -20% |
A typical McKinney deal, underwritten
The market-rate property above, run through the same engine every Faro report uses.
| Purchase price | $484,670 |
|---|---|
| Monthly rent | $1,840 |
| Cash required (20% down + 3% closing) | $111,474 |
| Net operating income | $9,646/yr |
| Monthly cash flow | -$1,711 |
| Cap rate | 2.0% |
| Cash-on-cash return | −18.4% |
| DSCR | 0.32 |
Values are falling here
Home values in McKinney moved 7.0% DOWN over the last year, measured as the median across 4 ZIP codes. That reverses the usual argument for a low-cash-flow buy: there's no appreciation currently carrying the deal, so a property here has to earn its keep on rent, and a typical one produces a $1,711 monthly shortfall. Falling values also mean today's comp-supported price is a moving target. The discount you negotiate matters more than usual.
Rents are climbing faster than prices
Rents rose 1.3% over the last year while home values moved down 7.0%: a 5.6-point gap. When rent growth outruns price growth, yields improve without you doing anything: the same $484,670 property collects more each year against a price that hasn't moved to match. It's the rarer of the two directions and it's what turns a marginal market into a workable one over a hold.
What it would take to break even
A typical McKinney property would need about $3,952 a month to cover itself at the default financing: 115% above the $1,840 the market currently supports. That gap is the honest size of the problem: it isn't closed by trimming an expense line, it's closed by buying meaningfully below market, putting more down, or finding a property that rents well above its market's median.
McKinney investor questions
Is McKinney a good place to buy rental property?
A typical McKinney rental at $484,670 renting for $1,840 a month returns 2.0% on a cap-rate basis and runs short by $1,711 a month at 20% down. Individual deals vary far more than markets do, which is the whole reason to underwrite a specific address.
Can you cash-flow a rental in McKinney?
Not at the market's own price and rent. A typical property runs $1,711 short each month. It would need about $3,952 in rent to break even. Deals that work here are bought below market rather than at it, which is what the price ladder above is for.
Are McKinney home prices dropping?
Yes: values moved down 7.0% over the last year, taken as the median across 4 ZIP codes in the city. That makes the price you negotiate matter more than usual, since the comp-supported value you're measuring against is itself moving.
Are rents going up in McKinney?
Rents moved down 1.3% over the last year, measured across 4 ZIP codes. The typical market-rate rental sits at $1,840 a month.
Other Texas markets
Run the numbers yourself
A market average is not a deal.
Paste a real McKinney listing and Faro underwrites that specific property from its own comps, with a target price you can actually offer.
Estimates for analysis and educational use only: not financial, investment, tax, or legal advice. Verify every number independently before making a purchase decision.